The Fixer: Prepaid cards

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Dear Fixer,
I have recently arrived in the UK from South Africa and will be studying in London for the next three months.

I do not want to open a UK bank account as I am here for such a short time, and as I have no banking record here, I have been told that I will not be accepted for a credit card either.

However, I get charged a huge amount every time I use my South African bank card to withdraw money or pay for anything.

Is there any cheaper way I can access my money? Any advice would be very helpful.

D Hambrook, East London

Dear Miss Hambrook,

One way to minimise the charges you pay for making withdrawals is to take out as much cash as possible - for example several hundred pounds - at a time so that you pay less overall.

Carrying large amounts of cash around is never ideal, however. And there are lots of purchases, such as those made online, for which you need a card.

I would therefore recommend looking into prepaid cards. These do not require a credit check, so you will be accepted as long as the company offering the card can verify your identity using your personal details.

And once you have loaded your card with money, you can use it just as you would a credit or debit card - the only difference being that you cannot borrow or go overdrawn.

Prepaid cards can be funded monthly or on a pay-as-you-go basis. You top up the latter type of prepaid card in a similar way to topping up a pay-as-you-go phone – so either at Payzones that can be found at over 30,000 locations in the UK, by using your mobile or with a debit card.

A pay-as-you-go card may prove the best option for you as they come with no monthly fee.

However, if you are going to make more than say five purchases (and one withdrawal) per month with the card, then it may be worth paying the monthly fee to benefit from the lower transaction charges imposed by prepaid cards that you put money on monthly. Either way, it should work out cheaper than using your South African card.

Comparison websites such as AOL Compare are a good place to shop around for the best prepaid cards. Just remember to check the charging structure and that you can cancel for free when you leave the UK.

The Fixer

Whatever your financial problem, write to themoneyfixer@aim.com and The AOL Money Fixer will get on the case.