Holidaymakers are warming up to prepaid cards for overseas spending as the switch from cash continues, new research from financial data analytics experts Consumer Intelligence shows.

More than one in four (27%) of people heading abroad for winter holidays this year plan to use prepaid cards for some of their spending compared with 23% who used prepaid cards on winter breaks last year.

Nearly three-quarters (74%) heading overseas will still use some cash, the study found, but that is down from 76% last year with the data also showing a rise in the use of credit and debit cards for holiday spending. Pre-paid cards are now nearly as popular as debit cards which are used by 28%.

The gradual switch to pre-paid cards is an opportunity for providers to expand their range and Consumer Intelligence’s research on winter holiday destinations is another indicator of potential growth areas.

Its study found Spain remains the top choice for UK holidaymakers in the winter with 22% planning to visit. But Canada and the US are now the joint second destination chosen by 11%. France and Germany make up the rest of the top five.

Advantages for holidaymakers using prepaid cards include potentially better exchange rates plus less risk for their money if they lose the cards. But customers need to watch out for fees and debit cards can also offer good deals.

Andy Buller, Key Account Director at Consumer Intelligence said: “It is plain that card spending, for winter travellers, is definitely gaining ground.

“Providers must ensure they are offering the right deals, including prepaid cards, for the winter season, as well as taking note of the new popular destinations.”