When I’m called to prepare my finances for overseas travel, I’ve always been great – except when it comes to how I actually pay for things when I’m there.
I’ve fallen victim to using my regular bank card and spending an extra 3 per cent on each transaction for a foreign currency conversion fee, or copping ATM withdrawal fees of $2 or more.
And, while it might not sound like a lot, it definitely adds up.
And I’m not the only one: Australia’s consumer watchdog found Australians are paying way too much on foreign currency conversion services because of confusing prices and a lack of competition.
“Consumers and small businesses tend to default to their usual bank to send money overseas, but this may not be the cheapest option. This is another example where consumers may end up paying more for their loyalty,” the ACCC report found.
But while my bank may have fooled me once (or multiple times, truthfully), it wasn’t going to fool me again.
On my recent trip to New Zealand, I decided to opt for an overseas card with TransferWise, and see if I saved any cash.
What is TransferWise?
TransferWise is an international money transfer provider that focuses on making bank transfers more affordable than traditional banks, and making the transfer process transparent.
So transparent that when you exchange currency using the app, it allows you to price compare with other outlets – including your own bank – to check that you’re getting the best rate.
TransferWise offers customers the mid-market rate, which is what you see on Google, meaning there’s zero markup on the exchange rates.
Are there any currency conversion fees?
Like most overseas travel cards, TransferWise does charge a fee to convert money between currencies in your accounts.
For me, converting AU$3,000 to New Zealand Dollars cost $15, which is a 0.5 per cent fee.
However, when you make a payment overseas using that card, there are no conversion fees whatsoever.
Immediately, I saved 3 per cent on every purchase.
Given my partner and I spent $3,000 overseas, we saved a minimum of $90 just in conversion fees over the course of the trip.
What about converting the cash back?
TransferWise works like a bank account with its own BSB and Account number, meaning getting your money back to you is simply a case of transferring the cash back to your regular bank account.
If you’re sending money back to an Australian bank account, the remaining cash in your TransferWise account will be converted back to AUD – which will incur a fee.
Was it easy to use?
Signing up for the card on the TransferWise site was an intuitive, straightforward process: you can even sign up using your Facebook or Google account.
Receiving the card took around 8 days, and sending money to the account took around 24 hours. So if you’re looking at travelling soon, you would want to sign up sooner rather than later to avoid any delays.
Then it’s simply a case of verifying your details by taking photos in the app of both sides of your driver’s licence.
The verification process only took me an hour, and after that I was able to send money to my TransferWise account from my regular transaction account.
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