Pay with your Kalixa prepaid MasterCard and get a FREE croissant in Starbucks. Kind of.

I’m very busy and very important, so today I’m in Vienna, home of the great institution that is the Viennese coffee house – once described as “a place where time and space are consumed, but only the coffee is found on the bill”. Which is all very poetic, but I’m in Starbucks, because I know what I like. And what I like is free stuff.

A FREE croissant at Starbucks simply for buying my coffee with my Kalixa prepaid MasterCard!
A FREE croissant at Starbucks because i bought
my coffee with a Kalixa prepaid MasterCard!
So, I’ve just bought myself a large (I refuse to say “grande”) Americano (€4,20) and a plain croissant (€1,40), paying with my Kalixa prepaid MasterCard.

Because he’s extremely tight, my colleague (who I’ll call Mr X to save any embarrassment) just went for the big Americano, but paid with his Lloyds TSB debit card. Mr X is an idiot. He’s an idiot for two reasons:
  1. the croissants are very tasty; and 
  2. because he paid with his Lloyds TSB debit card, when you work out the cost in proper English money, his lone coffee cost him the same as my coffee and my croissant cost me. 
 But how? As they say on American telly – let’s do the math:

Kalixa prepaid MasterCard (me)
Lloyds TSB debit card (Mr X)

Large Americano
€ 4,20
Large Americano
€ 4,20
Tasty Croissant
€ 1,40
€ 5,60
€ 4,20

And when you convert from Euros to Pounds, using our different payment methods, this happens…

Exchange rate: 0.7843325
£ 4.39
Exchange rate: 0.808006
£ 3.39
Additional fees
Additional fees
£ 1.00
£ 4.39
£ 4.39

Result... free croissant for me!  :-)

As you can clearly see from the beautiful table above, my “free” croissant is the result of a combination of two things: exchange rate and additional fees on our different payment methods.

Lloyds TSB marks up the exchange rate on the day by 2.99% while Kalixa does not. Although this is a small percentage it still made a difference of £1. Consider what you spend over a year on foreign travel, or even on a single family holiday abroad, and all those additional 2.99% charges soon add up.

Another thing that Lloyds TSB do (and they’re by no means the only ones) is whack on an “additional fee” of £1 to each transaction abroad – just for the pleasure of using a card with a picture of a horse on it. Most Lloyds TSB customers don’t realise this; even though the fee is listed in their charges table, it’s certainly not obvious on their statements. Kalixa does not charge this “additional fee” on foreign purchases.

Kalixa contactless prepaid MasterCard
The Kalixa contactless
prepaid MasterCard
So the bottom line is that the combination of the Lloyds TSB debit card’s unfavourable exchange rate plus its random “additional fee” means that foreign transactions are 25% more expensive than using a Kalixa prepaid MasterCard.

Like my friend Mr X, these days it’s habit to just pull out your usual card and pay for anything anywhere, but that kind of behaviour’s seriously going to cost you in the long-run.


Some notes about this article:

Often with editorial comments, there are elements or facts that might be excluded, and as such can influence the reader’s overall perception. I like to ensure that this doesn’t happen, is I’m adding some additional notes below in the interests of transparency, honesty and good old fashioned decency – because there’s not enough of that in the world today.

Date & time of comparison
The transaction took place on Friday 20th July at 09:00 CET

Lloyds TSB
If you have a Lloyds TSB Platinum or Premier card, then you would not incur the additional £1 fee per foreign transaction. However, for these accounts, you would be paying monthly fees of £17 or £25 respectively. See Lloyds TSB fees table

I’m not highlighting Lloyds TSB here for any particular reason, other than the fact that Mr X has an account with them, so it’s easy to verify the details on his statement. Most of the high street banks operate in the same way – levying a percentage on the exchange rate and an additional transaction fee.

Kalixa prepaid MasterCard
As the Kalixa Card is a “prepaid” MasterCard (think of it as Pay As You Go), you’ll need to make sure you’ve got enough money on it before you use it. There are a range of methods to load your card, some of which incur fees, but it’s free to load if you use a bank transfer, either by cheque or cash in a branch of Barclays, or via Internet banking.

To get a Kalixa prepaid MasterCard, you’ll need to register online – there are no credit checks and there’s an upfront fee of £6.95 (though sometimes there are offers on this) and you’ll be asked to deposit money onto the card before it’s sent to you.

There are no transaction charges (in the UK or abroad) and no monthly or annual account management fees. If you do NOT use the card for 6 months, then you’ll be charged a fee of 99p per month, but you’ll be sent a reminder before this happens (and you can easily avoid this charge just by using your Kalixa Card to buy a pint of milk or something,  and you’re sorted for another 6 months).

If you use your Kalixa Card to withdraw cash from a cash machine overseas, you’ll be charged £2.75 by Kalixa. While this isn’t ideal, it’s common for all card issuers to make a charge for withdrawing cash abroad – so just plan ahead and try to keep cash withdrawals to a minimum.