One of the biggest issues while traveling internationally is that you end up paying around 3-5% extra for every transaction due to currency exchange charges. Whether you exchange cash at an exchange house or use your debit/credit card, most transactions get tacked with an additional 3-5% fee. Some banks even levy an additional foreign currency fee over and above this. If you travel long term, this really does start to add up!
Lately, we’ve been using a Revolut debit card to avoid foreign currency fees on our travel spends. At the time of writing this card is only available for EU residents and residents of a few other countries. Of course, US residents already have several debit and credit card options that offer zero foreign exchange fees. If you’re a US resident, make sure you get one of those before setting out for a big trip. For EU residents, there’s Revolut.
Where is Revolut available?
Of course, the same benefit of having no foreign currency fees applies for online shopping as well. So if you live in Europe and shop on Amazon UK or other foreign sites, this is another ideal application for the Revolut card!
The Revolut App
So what is Revolut? It’s basically a pre-paid Mastercard debit card that you can order through their app. The app is available on Apple and Android devices. Once you get the card and load it up with some money, you can use it locally or abroad with zero foreign currency fees. Revolut’s promise is that they deliver the exact mid-market global exchange rate when you swipe your card. They do not add any fees to this rate so you get the best possible bang for your buck every single time.
Do they deliver on this promise? Keep reading to find out.
Sign up and card delivery
This process is fairly smooth. Once you download the Revolut app, you have to pay for a Revolut card. It costs €6 to ship anywhere in Europe. They do ship the card anywhere in the world (with higher fees) but to complete your sign up and activate your card, you will need to prove that you reside in the EU or the few more countries that they are available in.
What the Revolut card looks like
We got the app, signed up and received the card within a week in the mail. Once you get the card, you have to use the app to activate it. At this stage, they will ask you for a copy of your ID and some other documents. These documents are verified by them within a few minutes and your card is then active.
Top Ups
Since this is a prepaid debit card, you do need to top it up. You can choose to top up your Revolut account with most major currencies. For most cases, you can use your credit or debit card to top up your Revolut account. You can also do a bank transfer for larger amounts. It’s a fairly quick and simple process and all done through the app. Once you have some money in your Revolut account, you are ready to travel!
Spending
The Revolut card works just like any other debit/credit card. It comes with chip and pin so it works seamlessly at most payment terminals around the world. It also comes with NFC so you can just tap it to pay at vendors that support this functionality. When you spend something from your card, the payment shows up immediately in the Revolut app and you can see that you will receive the exact mid-market exchange rate published by Mastercard.
Getting really good exchange rates in Korea and India
Exchange Rates
Apart from a few small surprises (due to not reading the fine print), the Revolut exchange rates were spot on as per the Mastercard global interbank exchange rate for that moment. Every time we made a payment in either INR or KRW, the exchange rates were the exact mid-market rate as published by Mastercard and verified here.
On weekends Revolut adds a small surcharge to transactions in major and minor currencies. There is a 0.5% surcharge on currency conversions between major currency pairs, and a 1% surcharge on conversions between other pairs. This means that if you topped up your account in EUR and are spending in USD, expect to pay 0.5% extra on weekends. This is to protect them from sharp currency movements when the markets open up after the weekend.
This still beats the 3-5% extra I’d be paying with my regular bank debit/credit card.
Cash Withdrawals
This is where Revolut is a little weak. Although they do offer zero fee cash withdrawals, the withdrawals are limited to €200 per month or equivalent in local currency. After this, they charge a 2% fee on cash withdrawals. While this is still lower than most banks, it can be quite a hassle. If you’re in a region that does not accept debit cards everywhere (South East Asia, for example) then you would run out of the cash limit fairly quickly. However, the 2% can still be cheaper than your own bank so compare and verify before proceeding on this account.
Security
The Revolut system uses several levels of security. Your card is controlled mostly through the phone app. The phone app is locked with a pin code so if someone gets access to your phone, they still can’t mess with your Revolut app. There are several other interesting security features. Using the app you can:
- Change your card pin
- Enable/Disable your card
- Enable location based security so your card cannot be used far from your phone
- Disable magstripe (swipe) payments which don’t require a PIN
- Disable contactless payments
- Disable ATM withdrawals
- Disable online transactions
You can decide to increase or decrease the security of your card at any point of time using the app depending on your situation and requirements.
Limits
There are some limits. Revolut ordinarily limits your account to €5000 of zero fee spends per month. After this, they charge a 0.5% surcharge. There is also a £30,000 annual limit on card spends so high rollers should probably stay away from this. For our use case, these limits seem perfectly reasonable as we only use the card for foreign exchange spends. The only limit that really gets in the way, as mentioned earlier, is the €200 per month zero fee ATM withdrawal limit.
Spend Analysis
The app will also categorise your spends and tell you what you’re spending on. This is useful if the app can tell what type of establishment you are spending at. In Korea, the app had no idea where we were and what we did, so it couldn’t really break down our spends in this way. However, it does tell us how much we spent in Korea overall, so that can be useful too.
Conclusion
The Revolut card works pretty well for our use case. It’s also really great for online shopping in foreign currencies. When an online merchant forwards you to the Mastercard Securecode or Visa 3D Secure system, Revolut automatically approves the transaction so you don’t need to bother with one time pins being texted to you or any other verification/foreign merchant issues. They can do this because disabling the card is super easy, you just log into your app and disable it.
Over time, we’ve saved a few hundred dollars on the exchange rate and this by itself has been worth it for us. The card can also be useful in cases where you earn in one currency but spend in another (for example, you work with US clients and bank in USD but spend in Euros or Rupees or another currency).
If you live in the EU and want to avoid expensive foreign exchange fees, get a Revolut card. Start by downloading the iOS or Android app and start saving 3-5% on your travel expenses right away.
If you are digital-nomad with a EU passport. Technically you are non-resident, so how do you open a such account?
Do choose the country based on your EU nationality?
You should choose the country where you have an address available. So perhaps your country of nationality.
Happy to read about Lucca. I`ve been looking for such an article one years ago and love it!