How Multicurrency Accounts Take the Bite Out of Spending Money Abroad


Travelers fed up with lousy exchange rates and punitive foreign transaction fees are signing up for apps that let them decide where the buck (or euro or pound) stops.

An illustration of a man in a plaid shirt strolling along the sidewalk past a fire hydrant, holding four leashes attached to various colorful currency symbols, including the dollar, the euro, the pound and the yen, as if they are pets. He is looking at his cellphone and smiling, as if he is relaxed. The sidewalk is edged by a colorful wall, and beyond it are the tops of trees and a blue sky.
Credit…Dominic Bugatto

Jet lag aside, almost nothing can dull that post-vacation glow more than a huge credit card bill packed with inscrutable foreign transaction fees.

In April, Lise Boissiere, a frequent traveler, decided she’d had enough of those unexpected buzz kills. Ms. Boissiere, who lives in London and works in human resources, decided to follow friends’ advice and open a multicurrency account. These types of accounts allow travelers to exchange their money at more favorable rates and with little to no transaction fees. They can then hold the money in various currencies and spend it using their phone or a card in the currency of whatever country they’re visiting.

Mr. Boissiere signed up for Revolut, one of the most popular online providers of these accounts, and was approved in six minutes, she said. Now she uses the Revolut app to pay for everything from croissants in France to Ubers in Spain. “It’s been transformative,” Ms. Boissiere said. “I could have saved myself lots of money by using it sooner.”

Tourists traveling abroad have long struggled to weigh the advantages and disadvantages of credit cards, debit cards and currency exchanges — worse rates and lower fees versus better rates and higher fees. Now, multicurrency accounts are changing the calculus.

Even though some credit and debit cards waive foreign transaction fees, multicurrency accounts often have more favorable exchange rates, said Ted Rossman, a senior industry analyst with the financial advice service in New York. At the end of January, $10 would get Revolut users 9.21 euros, while Visa customers would get €9.15. But once Visa’s typical 3 percent foreign transaction fee was factored in, they would get €8.88.

Multicurrency accounts really stand out in contrast to cash, Mr. Rossman said. “Those exchange rates can be much worse, especially at airports and in tourist centers,” he said. “I think that’s the legacy model they’re looking to displace.”

Revolut, which currently has 26 million users, is only one of the services that offer these accounts. Other options include Wise (formerly TransferWise), Chime and Monito, as well as more traditional institutions like Citibank, HSBC and East West Bank (though the bigger banks may charge steep monthly fees and have high minimum balance requirements).

Online services like Revolut and Wise have ceilings on how much you can withdraw from A.T.M.s at no charge, and there are limits on how much and when currency exchanges can be made with no fees. These accounts also may not have the fraud and dispute protections of standard credit and debit cards.

Thinking of making one of these accounts part of your next trip? Here’s what you need to know:

These accounts, which may be used for personal or business purposes, let travelers hold, spend, transfer and toggle between multiple currencies. If you’re using Revolut, for example, you can link your bank account through Apple Pay or Google Pay, load the currency of your home country into your account, and exchange it into 29 currencies — including U.S. dollars, British pounds, euros, Japanese yen, Swiss francs, Canadian dollars and South African rand — whenever the rate is favorable. You can add funds to a Revolut account in 17 currencies via bank transfer or debit card as well as with Apple Pay or Google Pay. Other Revolut users can also send you money through the app.

You can spend the money in most multicurrency accounts with either a phone tap or a physical card, which is available at no charge. When you’re making a purchase abroad with Revolut, the app or card defaults to the local currency. If you don’t have enough of that currency in your Revolut account, the service will exchange on the spot at the lowest rate. You can also make a currency exchange via the app at any time to take advantage of an especially favorable rate.

Many debit and credit cards charge a fee (3 percent is standard for U.S. and Canadian credit card companies) to use overseas. The multicurrency accounts charge no foreign transaction fees (unless otherwise stated) and use the lowest exchange rates possible. (The services make money on subscriptions as well as the fees that merchants pay on transactions, among other things, Mr. Rossman said.)

The majority of multicurrency accounts can be used wherever Visa or Mastercard is accepted, said Michael Bodansky, the head of corporate communications for Revolut, which is based in London. Currently, anyone living in most areas of North America, Europe, Japan, Singapore or Australia can open a Revolut account. The service is planning to expand to customers in New Zealand, Brazil, Mexico and India soon.

Download the app for the multicurrency account and provide some basic personal information such as your name, address and Social Security number. For most people, it should take no longer than 10 minutes to be approved for any of the apps. If you choose, a card will be mailed to you, but you can start using the Revolut app, which is linked to your bank account via Apple Pay or Google Pay, immediately.

They vary by the plan you choose and your country of residence. In the United States, Revolut’s standard plan, for example, has no monthly fee and includes exchanges of all currencies up to $1,200 per month at no charge on weekdays, and with a 1 percent fee on the weekends. (If you want to use the app abroad on a weekend without paying a fee, you can transfer into a new currency on a weekday.) If you exchange more than $1,200 per month, there is a fee of 0.5 percent for additional transfers. You can also make unlimited withdrawals from A.T.M.s in the Allpoint network, and up to $1,200 per month without fees outside the network, though the A.T.M.’s owner may still impose a fee. After that, Revolut charges 2 percent on withdrawals.

Wise — which also has no monthly fee for the base plan and offers 49 currencies — charges a minimal A.T.M. fee depending on where your card was issued. For example, if a Wise account was opened in the United States, you may make two withdrawals of up to $100 total every month with no fees, but after that, Wise charges $1.50 per transaction plus 2 percent of the total amount withdrawn plus whatever fee the A.T.M.’s owner imposes.

One major potential drawback is that most credit cards come with fraud and dispute protections, while multicurrency accounts may not, said Wei Zhang, a section chief at the Consumer Financial Protection Bureau, a federal agency. And not all the companies that offer multicurrency accounts are licensed banks, though many do team up with banks to offer F.D.I.C. deposit protection of up to $250,000. Finally, you have to be mindful of how much you withdraw from A.T.M.s to avoid racking up fees, and be aware of the days you’re using the app to avoid weekend exchange charges.

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