Even though some credit and debit cards waive foreign transaction fees, multicurrency accounts often have more favourable exchange rates, said Ted Rossman, a senior industry analyst with the financial advice service Bankrate.com in New York. At the end of January, US$10 would get Revolut users S$12.29, while Visa customers would get S$11.43. But once Visa’s typical three per cent foreign transaction fee was factored in, they would get S$8.01.
Multicurrency accounts really stand out in contrast to cash, 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 , Chime and Monito, as well as more traditional institutions like Citibank, HSBC and East West Bank .
Online services like Revolut and Wise have ceilings on how much you can withdraw from ATMs 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.
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 favourable rate.