At the end of a hard year, we take time away from work and other daily routines to spend more time with family and friends.

Often we have planned several months beforehand how we are going to spend the holidays, be it camping, backpacking or visiting new places.

The bottom-line for many people, however, is how much they are going to spend while on holiday, and whether those expenses will stop them from meeting other financial responsibilities when they get back to normal routine.

Over indulging

Even those with the best habits when it comes to money often find themselves over-indulging while on holiday. This forces them to ask for a salary advance on their second day of reporting to work.

Frequent travellers who are all too happy to swipe away their credit cards end up accumulating huge debts that they cannot pay off.

Then there are customers of various multinational banks who prefer to use their ATM cards when travelling abroad.

The downside of this practice is that banks and their affiliates in other countries have various charges which may eat into your hard-earned savings. There is also no standard conversion rates from the East Africa currencies to the currency of the country you are visiting.

Mr Suprio Sengupta, the marketing and product development general manager at I&M Bank, says these inconveniences have led to a rise in travellers’ demands for a secure and convenient way to carry money.

I&M was the first financial institution in the country to launch a multi-currency prepaid credit card designed for travellers.
Prepaid cards allow you to load the exact amount of money you intend to spend during your travels.

The cards allow you to cap your spending when you run out of money, although it is also possible to move more money from your account to the card even though the two are not interconnected.

Prepaid cards

“Our travel card has three sub-wallets in US dollars, euro and GB pounds. This enables the cardholder to directly load the specific currency in which they want to spend, depending on their destination country. This saves them a lot of money by not incurring currency exchange charges,” he said.

Growing demand has seen several other banks start offering prepaid cards of their own, including Chase Bank and KCB. Most of the cards are linked to either the Visa or MasterCard network, making them easy to use in connected retail outlets.

So before choosing a prepaid card provider, you need to ensure that the card is available for use in the country you are travelling to.

In some countries, for instance, retailers do not accept magnetic stripe cards. Instead, they prefer the chip-and-pin cards.

Travellers must ensure that the card is functional and activated before leaving the country to avoid a situation where one is stuck with a bill abroad.

Check to see if there is a minimum amount that you need to load onto the card to activate it, and how you will go about claiming any unused funds after your holiday.

Confirm with the issuing bank what alternatives are there for you in the event that technology fails and you are stranded without cash outside the country.

Before eating at a restaurant or going shopping, confirm with the particular outlet if the card is an acceptable form of payment to avoid embarrassment.

“Our clients who cannot access their funds for whatever reason will need to contact I&M Bank’s 24/7 call centre who will be able to assist in troubleshooting,” said Mr Gupta.

Carrying some cash – whether in dollars or local currency – can also come in handy, and it is preferable to avoid the bureau de change at the airport if you are looking for the best rates.