How to pay, but not to overpay — do you consider this before travelling to another country or shopping online in a store abroad? In both situations, a multi-currency card may prove to be the best solution. How does such a product work and how much does it cost to make and use it?
Eurozone, United Kingdom, Scandinavia, Poland, Czech Republic, Switzerland, Hungary — a common continent, but different currencies. For those who cross borders, it is a kind of challenge, e.g., when it comes to paying bills for purchases, accommodation, fuel, tickets, food, etc.
Disadvantages of the most obvious solutions
Using a credit or debit card in a single currency may — colloquially speaking — hit you in the pocket. There could be a lot of fees and unfavourable currency conversions that you can't quite handle. Cash withdrawals from ATMs abroad can be even more expensive.
Traditional banknotes and coins? For many of us, visiting a currency exchange office is a waste of time and risk. Paying in cash, which we do not use on a daily basis, may make us feel uncomfortable because we fear mistakes or frauds.
One card for many currencies
A better solution, even for someone who decides to go abroad not very often — let's say several times a year — is a multi-currency card. What should you know about the card and how is it possible to make profits when paying your dues in different currencies?
The products with only a few years of history in the times of open borders are quickly gaining popularity. Today, more and more banks and companies providing online financial services offer multi-currency payment cards. They differ not only in appearance but also in their operating patterns and available functions. Sometimes the customers of one banking institution or a private fintech company face different requirements — depending on, for example, the funds they operate.
Therefore, it is not so easy to describe all multi-currency cards with a single definition. Nevertheless, in the simplest words, their functioning is related to 1. the funding of foreign currency accounts; 2. the execution of transactions. The secret of success lies in the fact that card issuers often offer sub-accounts in different currencies. You can transfer money to them e.g., before you go abroad. Then a piece of plastic, although in some cases you can also use the virtual version of the card via an application in the smartphone because it recognizes the currency it deals with, takes money from such sub-accounts without exposing the owner to an expensive intermediary's share of transactions or a currency conversion in the imposed by the bank and the unfavourable rate for the card owner. What if the currency is not available on the sub-account? It depends on the card type. Nevertheless, in the best of products, there will be an automatic collection of funds from another sub-account and currency exchange at or very close to the interbank rate, thus very profitable for the user, without additional fees or commissions.
Not only on the road
An exemplary trip across Europe from Poland to Norway through the Czech Republic, Austria, Switzerland, France and the United Kingdom would require the use of as many as six currencies: Polish zloty, Czech crowns, Euro, Swiss francs, Pounds, Norwegian crowns. However, all you need to do is get a multi-currency card, top up your account, install the application, and then... that's all! Favourable exchange rate, no additional fees and commissions, in a word we save time and money. If you run out of funds on your card, you can top up your account, e.g. from your bank account or ask someone for a transfer.
However, a multi-currency card is not only useful for shopping or meals. It allows you to withdraw cash from an ATM abroad. Even without leaving the country, the product allows you to pay your dues in online shops from different countries and continents having different monetary units. What is particularly significant is the fact that it is most profitable to pay in these shops with the currencies used by the salesmen on a daily basis.
Things to be careful about
Multi-currency cards are not free of flaws. One of them may be, for example, a lack of funds on the account. If you have decided on a product in which you haven't topped up your account in real-time and you can't do this with a credit or debit card, you will have to wait a few hours for the money from your bank account until it reaches your multi-currency card account. If this occurs at the weekend, it will not be possible to top up the account with some card issuers until Monday.
Another unpleasant surprise may come at an ATM abroad. Some of them offer the user a dynamic currency conversion, referred to as the DCC. If the ATM informs you before the withdrawal is made that it proposes a specific currency exchange rate, it means that it has not considered your card as local. Then, unless we are in a very urgent need, it will be more advantageous to resign from the transaction and look for another ATM.
Even the best and most advanced products do not give access to all the world's currencies and in some countries, they will prove as useful as regular debit or credit cards.
No charge for the issuance, but…
Not all banks operating in Poland offer their customers multi-currency cards. This situation may likely change and the growing competition will benefit customers. Today you can apply for a card, among others, to PKO BP, Pekao, Credit Agricole, Getin Bank, ING Bank Slaski, Citi Handlowy, Alior Bank. All the institutions mentioned above do not charge any fees for issuing the card. In some cases, the use of the product is also free of charge, but some banks are charging for it from 3 to 10 PLN per month, which depends on, for example, the funds deposited on the card account or having a personal account. As a rule, banks offer sub-accounts in different currencies free of cost, whereas they impose commissions for withdrawals from ATMs abroad. Depending on the bank, the rate is 3-4% of the withdrawn money or e.g., a fixed tax of PLN 6-10.
An interesting alternative to banking solutions may prove to be the multi-currency card offered at Conotoxia.com, a portal specializing in online currency exchange, international money transfers and online payments. No fees for issuing and activating the card, free access to 20 currency accounts, no minimum deposit requirement, the option to enable and disable foreign and contactless payments at any time — these are just some features of the card from Conotoxia.com, which will be available soon. To learn more and sign up for the card availability notification, just visit the website: https://conotoxia.com/multi-currency-cards.