Which statement about using a debit card or a prepaid travel card abroad is true?

Which statement about using a debit card or a prepaid travel card abroad is true?

• A. Prepaid travel cards are not linked to a bank account, offering less risk to carry.
• B. They are linked to a bank account, increasing risk to carry.
• C. They usually charge currency conversion fees for prepaid cards.
• D. They generally have no setup fees.

Answer: (A)

The main idea is how the card is connected to your bank and what that means for risk when abroad. A prepaid travel card is loaded with a set amount of money and isn’t tied to your bank account. Because of that, if the card is lost or stolen, you can only lose the money you loaded onto that card, not funds from your bank. That containment generally makes it safer to carry than a debit card, which is linked to your bank account and can expose your available funds to fraud or theft, even though banks offer protections. The other statements aren’t as reliable. A prepaid card is not inherently connected to a bank account, so that part of the first claim is the main risk-reduction point. Currency conversion and setup fees vary by issuer and are not defining for the risk difference between the two card types.

The main idea is how the card is connected to your bank and what that means for risk when abroad. A prepaid travel card is loaded with a set amount of money and isn’t tied to your bank account. Because of that, if the card is lost or stolen, you can only lose the money you loaded onto that card, not funds from your bank. That containment generally makes it safer to carry than a debit card, which is linked to your bank account and can expose your available funds to fraud or theft, even though banks offer protections.

The other statements aren’t as reliable. A prepaid card is not inherently connected to a bank account, so that part of the first claim is the main risk-reduction point. Currency conversion and setup fees vary by issuer and are not defining for the risk difference between the two card types.