With the British pound hitting a record low against the US dollar in September, it’s more important than ever to have options for spending your money abroad.
One option that is becoming more popular is the multicurrency card. These cards allow you to load multiple currencies onto one card, so you can spend in whatever currency you need without worrying about exchange rates. They are an ideal tool when currencies fluctuate, as they allow you to buy currency whenever you want.
With many different options available, are multi-currency cards a good idea in a currency crisis?
What are Multicurrency Cards?
Multicurrency cards are prepaid cards that allow you to load multiple currencies onto one card. Multi-currency cards can be helpful if you frequently travel to different countries if you want to hedge against currency fluctuations or deal in various currencies regularly. When you use your multicurrency card, the funds will be automatically converted into the local currency at the current exchange rate.
Most multicurrency cards will allow you to load multiple currencies onto one card, including the US dollar, British pound, euro, Australian dollar, and New Zealand dollar. Some cards also allow you to load other less common currencies, such as the Hong Kong or Singapore dollar.
Multicurrency cards can be used for both online and offline purchases. The card will automatically select the right currency and if funds are not available covert and choose from other currencies you have.
One of the main benefits of using a multicurrency card is avoiding paying foreign transaction fees. When you use your card to purchase a foreign currency, these fees are typically charged by your bank or credit card company. By using a multicurrency card, you can avoid these fees altogether.
Another benefit of multicurrency cards is that they can help you hedge against currency fluctuations. For example, let’s say you load 100 US dollars onto your card. If the US dollar weakens against the British pound, you will still have the same 100 US dollars worth of purchasing power.
There are some drawbacks to using multicurrency cards. They can be expensive to use. Some cards charge a monthly fee, while others charge a per-transaction fee. Compare the fees of different cards before deciding which is suitable for you.
Who are Multicurrency Cards Useful for?
Multicurrency cards are helpful for anyone who frequently travels to different countries or wants to hedge against currency fluctuations. It is also a good way if you transfer money a lot to various accounts in foreign currencies.
Are multicurrency Cards the Same as Banks?
Multicurrency cards are not the same as banks. Banks typically charge foreign transaction fees when you use your card to purchase a foreign currency. You should be aware money protection differs. Multicurrency cards allow you to load multiple currencies onto one card, while banks typically only offer one cash per account.
How to Choose the Right Multicurrency Card for you
Before signing up for a multicurrency card, it’s essential to research to understand what is available in the market. There are many multicurrency cards on the market, so how do you know which one is right for you?
The main things to look out for are:
- The fees associated with the card
- The currencies that are available on the card
- Where the card can be used
Most Popular Multicurrency Cards
You may or may not have heard of the different multicurrency cards available. Here is a quick overview of the three most popular ones which were revealed in a study by CMC Markets.
Revolut
Revolut is a multicurrency card that offers free foreign transactions and currency exchange. There are over 150 currencies available on the card, which can be used in 200 countries. Revolut also offers a mobile app that makes it easy to track spending and top up your balance.
Overview
- No monthly or annual fees
- Can hold up to 25 different currencies
- Free ATM withdrawals up to £200 per month, then a fee of
- Can be used in over 150 countries
- Can be used as a crypto currency app.
Wise
Previously known as TransferWise, Wise is a multicurrency card that offers free foreign transactions and currency exchange. There are over 40 currencies available on the card, and they can be used in 130 countries worldwide. The Wise app also makes it easy to track your spending and top up your balance.
Overview
- No monthly or annual fees
- Can hold up to 27 different currencies
- Free ATM withdrawals up to £200 per month, then a fee of
- Can be used in over 130 countries
N26
N26 is a multicurrency card that offers free foreign transactions and currency exchange. There are over 40 currencies available on the card, and they can be used in 130 countries worldwide. The N26 app also makes it easy to track your spending and top up your balance.
Overview
- No monthly or annual fees
- Can hold up to 31 different currencies
- Free ATM withdrawals up to €200 per month, then a fee of
- Can be used in over 130 countries
How Safe are Multi-Currency Bank Accounts?
Just like any other bank account, the rules that govern a multi-currency account will be set by the authorities of the country where the account was opened. For example, suppose you open a multi-currency account in the UK.
In that case, it will be regulated by the Financial Conduct Authority (FCA). When choosing a provider for your multi-currency account, ensure your money is protected by the Financial Services Compensation Scheme (FSCS).
Some newer banks may not have as much protection as older banks, but they may offer more flexible features. For information on how your money is safeguarded, check the FAQs section of your chosen provider.
Alternatives to Multicurrency Cards
In addition to multicurrency cards, a few other options are available for travel money. These include:
Credit cards: some credit cards offer foreign transaction fee waivers or rewards points that can be used towards travel expenses.
Debit cards: some debit cards offer foreign transaction fee waivers or rewards points that can be used towards travel expenses.
Prepaid travel cards: prepaid travel cards can be a convenient and safe way to carry money when travelling. They can be used anywhere that accepts Visa or Mastercard and can be easily reloaded.
Although the above offer competitive travel rates, the major drawback is that the exchange rate is the time of purchase. If you travelled to Britain a lot and wanted to get some currency at a steal, you wouldn’t be able to, as the rate is set when you load the card.
A multicurrency card can be a great way to save money on foreign transactions and currency exchange fees. With so many cards available on the market, it’s important to do your research to find the right one for you. Consider things like monthly or annual fees and currencies.
Conclusion
If you frequently travel to different countries or want to hedge against currency fluctuations. In that case, a multicurrency card may be a good option for you.
Many multicurrency cards are available on the market, so it’s essential to research to find the right one for you. The main things to look out for are the fees associated with the card, the currencies available on the card, and where the card can be used.
Revolut, Wise, and N26 are three of the most popular multicurrency cards available.
Each offers free foreign transactions, and currency exchange, has a mobile app to track your spending efficiently, and is accepted in over 130 countries worldwide. When choosing a multicurrency card, be sure to take into account your individual needs to find the right card for you.