Multi-Currency MasterCard – bogging booging blogging

The Short Version

I use a card from a company called TransferWise (now just called “Wise”), I’m very happy with it. I use its app to load USD on to it from my bank account, and then in the same app I can convert between currencies at the best overall rate I’ve been able to find (<1%). I can spend money in whatever the local currency is, and can check my balance and transactions at any time within the app.

Try Out TransferWise with bo’s link

The Problems with U.S. Based Cards

As an American, all of my monies start in USD. Even when I am allowed to spend those USD in other currencies (for me, as GBP (£) in the United Kingdom, or Euro (€) in France), the card issuer (aka my bank) converts the money to the correct currency, and charges some fee for doing so. The spending of USD in a foreign market initially has two problems, and then in practical use, presents two additional problems:

1. Exchange Rate

You can just Google “1usd in gbp” to find out the current average exchange rate, and as far as I know, that is darn close to the best exchange rate an individual can get since it is just reflecting the market as-is. Many banks will use their own exchange rates which may or may not be close to this rate. In my experience with TransferWise, they’ve been remarkably close to, or even below this rate.

2. Foreign Transaction Fees

Some banks charge this as a flat rate per transaction (ex. whether you spend £1 or £100, the bank charges a $2.95 foreign transaction fee, or “FX”), and other banks charge it as a percentage of the transaction (ex. a 2% FX fee on £1 will be £0.02, and on £100 will be £2.00). Sometimes, it is a combination of both a flat and percentage based fee. You’ll want to verify with your bank before counting on this, but this page lists different banks and their FX fees.

Prior to TransferWise, the best solution I found was through Ally Bank, which is great using a fair exchange rate, and only about 1% FX.

3. ATM Fees

Sometimes, a place will accept cash only, or – you just want to have some on hand for incidentals. Many ATMs I found in Europe were reportedly “fee free”, but that was apparently just for locals. Trying to withdraw local currency from my Ally account worked, but at a terrible ATM-imposed exchange rate, and sometimes with additional usage fees since my card was from the U.S. (fees imposed by the ATM, not my bank, though you may also encounter additional ATM fees from you bank).

4. Fraud Freezes

Even though I set “travel alerts” on both mine and my wife’s Ally cards, we frequently would have our cards fail to work, and have to either call the international Ally support line, or wait for an email to arrive which contained a link for us to verify our card use was intentionally international. Both of these problems were potentially aggravated depending on what our phone or internet situation was like at the time.

TransferWise FTW

Exchange Rate: Every time I’ve checked, the exchange rate I get through TransferWise is at or below the Google reported exchange rate for that day.
Foreign Transaction Fees: TransferWise charges percentage based fees when bringing funds in to the app (in my case, USD), and when converting between currencies. As an example, I imported $100 USD to TransferWise from my bank account with a fee of $0.35 (0.35%). I then converted all $100 USD to another currency with a fee of $0.45 (0.45%). So the total fees for a $100 transaction was 0.8%.
ATM Fees: TransferWise doesn’t charge ATM fees, and allows you to withdraw up to $250/mo (or local equivalent) for free. This was plenty of cash for us.
Fraud Freezing: Probably because this card is meant to be used during travel, I’ve never had any issues with it freezing my card due to fraudulent use concerns.

Using TransferWise

After you’ve signed up and received your card, you’ll want to install the TransferWise app (you can also do most of these things through a web browser, but the app is simpler).

Adding Currency

The first step is adding currency to TransferWise that you have elsewhere, or in regular banking terms, “depositing money in to your TransferWise account” – you can deposit this money from a bank account, a credit card, etc. You deposit in to the same currency the money already is – for me, my regular bank account is in USD, so I will add (deposit) USD in to the TransferWise, so that I can convert it to other currencies.

To do this, I tap the USD currency in the app, and then the Add button. I type in how many USD I want to add, and press Continue. The next screen asks me what method I want to use to make the deposit. The method with the lowest fee (the 0.35% I reference above) is transferring in from your bank – this takes about 3 hours (*during normal business hours in the US, possibly longer on weekends) before the funds are available in TransferWise. You can opt to use a credit or debit card as well, which adds the money “in seconds”, but has a higher fee (roughly 3.8% and 1.25% respectively).

Converting Between Currencies

The app will notify you when the money arrives in your TransferWise account, at which time you’ll go back in to the USD currency, and tap the Convert button. Choose how much USD you want to convert, and the currency you wish to convert it to (ex Euro), and the app will show you how much their fee will be, what the exchange rate will be, and how many Euro (or whichever currency you selected) you will have after conversion.

Use it like a Regular Bank Card

The conversion is instantaneous, and you can then spend those funds using the MasterCard they provided you, or withdraw them at an ATM.

Pros & Cons

Pros:

No per-transaction fees for using the card.
No need for mental calculations – convert only what you’re willing to spend, and then the app automatically tells you how much of that currency you have left after each transaction.
The card they provide you has the “contactless” chip in it, which means you can “tap to pay” anywhere you see the symbol. Although it isn’t as common in the U.S., this is available almost everywhere in Europe. Many cards in the U.S. do not have this chip, and cannot be used this way even at locations that support it in Europe.
Since there are no ATM fees, you can withdraw cash as needed, instead of making large cash withdrawals to minimize fees. Then you’re carrying less cash too!
When you leave a country, any leftover currency can be converted to the currency of whatever country you are visiting next.
If you lose the card, or it is stolen from you, you can use the app to immediately freeze the card so that is unusable until you choose to unfreeze it.

Cons:

If you want to use the app while you’re out and about, you’ll need to have an internet connection.
If you love bringing home tons of souvenirs, the TransferWise spending limits may be smaller than you’d like – feel free to review them to see if they’ll suit your needs.
To get the best rates, you do need to plan ahead and move money in to your TransferWise account. Take a look though, even if you didn’t plan ahead, their fee for instant transfers may be less than your banks foreign transaction fees.
Only one card per account. If you’re traveling with your spouse, you’ll have to share one physical card (a workaround though if you’re familiar with Apple Pay or Google Pay is to add the one card to both of your phones).

Tips

Whether you use TransferWise or not, if possible, use contactless (either on your card if it supports it, or through Apple Pay or Google Pay). I recommend it since it saves you having to sign anything, which it seems is much less common since some checkout areas don’t even having pens on hand.
If you do use an ATM (with our without a TransferWise card) try to withdraw using “local currency”, and let your bank do the conversion – this is typically a much better rate than the ATM will give you. More info in the “What if…” section of this TransferWise help article.

The sign up process is pretty painless:

Use the link below to get started.
For legal purposes, you’ll have to provide some personal information.
Verify using your bank account (either by “linking” your bank login with your TransferWise account, or by having them do < $0.10 deposits in to your account, and you verifying those amounts).
Then, to start I think they require depositing at least $20.

After that, they’ll send out the card to you. After receiving the card, you can spend that $20 you deposited right there in the U.S., or add more funds, convert them, and start traveling.