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Hey, remember travelling?
Yeah, I sure do.
As the world continues to drop COVID-related restrictions for travellers, tourist operators have reported a surge in bookings. Clearly, the world misses international travel as much as we do, and while it may still take some time for the international tourism sector to recover, I’m more than happy to contribute to that recovery.
Accessing Money Abroad Used To Suck
When FIRECracker and I took our first trip together to the Caribbean waaaay back in 2006, I distinctly remember having a wallet stuffed full of…wait for it…travellers checks.
They were these slips of paper that kiiiinda looked liked real money that you could buy from American Express, and you had to exchange them at your hotel’s reception desk. And they weren’t cheap. The issuing bank would charge you a fee of 1-5% of the face value up front, then the person cashing them out would charge you another 1-5%, and then you’d get hit with a shitty exchange rate on top of that. It was a dark and depressing time.
Since we quit our job and started travelling full-time, it’s gotten a lot easier, but I wouldn’t exactly call it “easy,” because the method I would use to convert currency would change depending on the country. In certain countries in South America and Europe, I would use a certain bank’s ATM card that had partnerships with local banks that let me avoid fees. In others, I would pay in USD then use Norbert’s Gambit back home to convert Canadian dollars to pay it off. And memorably in Thailand, I would pre-pay a credit card so it would have a positive balance, then take out a cash advance from a bank teller to get Thai baht because that was the cheapest method.
It was a messy system that made sense only to me. FIRECracker hated it with a passion.
Which is why I’m super excited to tell you about a new way of exchanging and accessing your money while travelling!
Wise is a company I’ve done business with for years when it was known as TransferWise. Back then, it was an up and coming fintech company based in the UK that specialized in low-cost foreign exchange.
Now, they’ve grown up, rebranded as just “Wise,” and introduced a very cool debit card with it!
Here’s how it works and why I think it’s the coolest thing ever.
You sign up for a Wise account, then on the left sidebar you can request a card from them. Give them your address and in a few weeks, your cute new bright green card shows up in the mail.
This may look like just any other debit card, but the cool thing about this is that it’s a multi-currency debit card. That means that rather than just holding one currency and converting every time you make a purchase like normal boring debit cards, you can hold balances separately in CAD, USD, Euros, pounds, or any of the other 50+ currencies they support. They even support Thai baht! *swoons*
How This Saves You Money
Now you might be asking, why do I need this? Why don’t I just use my credit card for everything while I’m travelling? Two reasons.
Sometimes, you can’t. Not all vendors take credit cards for everything, especially for smaller mom-and-pop shops or street vendors. And certain countries just hate using credit cards for some reason (looking at you, Germany!), so you end up relying on cash for most purchases. This means you have to make ATM withdrawals, and you often end up getting a crappy exchange rate from your bank when you do.
The other reason is that sometimes you want to take advantage of a good exchange rate. Right now, we’re writing this article from Europe, and the news coming out of Ukraine has caused the Euro to weaken in value relative to other currencies. So when an opportunity to buy a bunch of Euros (or whatever currency) for cheap comes along, you can use this account to lock in a good exchange rate.
Normally, doing this would involve walking up to an ATM and taking out a whole bunch of cash, which can be a bad idea because cash is liable to get lost or stolen. But this way, you can do it electronically, and then withdraw or spend it as you need it later.
Because the green card you get is a VISA debit card, it can be used to make purchases as you normally would at a store, or take it out as cash from any ATM. Depending on what country you’re resident in, you get a certain amount of cash you can withdraw for free every month, after which a small fee gets charged.
As Canadians, we get 2 free withdrawals per month up to a total of $350 CAD (or equivalent), but PROTIP! If you and your significant other each get a card, that doubles your ATM withdrawal room each month since transfers between Wise accounts are free!
I just exchanged $500 USD for euros, so I thought it’d be useful to show my actual experience using the app and the card.
When you add a certain currency to your Wise account, you get a virtual account that acts like a bank account physically located in that country, complete with banking details that you would normally find printed on a check. That means my CAD account comes with an Institution number and a Transit number, my USD account comes with an ACH Routing number, and my Euro account comes with a BIC and an IBAN.
This means that you can link it to your home bank account and do bank-to-bank transfers like any other bank account. This also comes in SUPER DUPER handy if you do run an international business like us and sometimes need to receive payments in different currencies. We recently received money from an airline as compensation when a flight got cancelled, and by using Wise we were able to receive and spend Euros directly without needing to convert it into USD or CAD, then back again.
So in this case, we wanted to convert USD to Euros to take advantage of a good exchange rate.
First, we go into the web app (they also have a mobile app). On the left, we can see the 3 wallets I’ve created: CAD, USD, and Euro. We start be opening the USD wallet and adding $500 USD.
Wise gives you multiple methods of funding your account, but ACH is probably the one that US residents are the most familiar with since it’s how you guys handle bill payments already.
After entering in your bank’s details, we now have $500 USD in our wallet ready to go!
Then, we click convert, and say that we want Euros. The nice thing about Wise is that they’re very transparent about their fees, and they show the exact breakdown of how much you pay, which in this case is a $2 transaction fee. The exchange rate we are getting matched up with the spot rate reported by Xe.com, so there isn’t an additional sneaky rate spread that most banks charge.
And with that, we now have Euros! Again, I can spend these by tapping the card at a point-of-sale machine like a regular debit card, or withdrawing cash from an ATM. As long as I stay within my fee-free withdrawal limits, there are no additional fees charged.
Other Cool Features
There are also a few other cool features that I haven’t experimented with as much, but I’ll mention them here. You can connect it with Apple Pay or Google Pay, so you can use your phone to tap-to-pay, if you’re into that.
A very interesting feature is called auto-conversions. Basically, you can set up a conversion pair and a certain amount you’d like to convert at a certain price. If the market hits that price, then the conversion happens for you automatically, so it’s kinda sorta like a foreign exchange limit order. I haven’t fiddled with this yet, but it’s a really interesting feature if you like to do any active forex trading.
Should You Open An Account
Now, I get about a bajillion requests to affiliate for shitty financial products (for the last time, NO we do not want to help you sell Bored Ape NFTs!), and I almost never say yes. My bar for affiliating for something is a) Will it help our readers and b) Do I use this product myself.
In this rare case, Wise is a resounding yes to both.
Wise is very transparent about how they make their money, and basically you only get charged when you actually use it to convert money. There are no fees to open an account, and no annual fees to keep the account open. There’s a small £5 fee for the debit card itself, but that’s it.
I got the card when I was trapped at home during the pandemic and decided to bring it with us, and I’ve surprised by how useful it’s been now that we’re back on the road. It actually came in super handy recently when a flight got delayed and the airline offered to compensate us in Euros. I was able to arrange a direct deposit into our Wise account and start spending it without having to do any exchanges back and forth to our home currency. It was awesome.
So if you’re planning on travelling ever again, open and account and get the card before you go so you can have it on you just in case you need it. There’s no downside, and I’ve personally found it super useful.
Not that if you use this link to sign up, we will get a commission which helps keep this site going, so we would be eternally grateful 🙂
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