Many of our clients have been limbering up lately, doing their homework and preparing themselves for some international travel. Covid may be still with us, but we’re refusing to be pinned down.
After three years without so much as a stamp in their passports, Susanna and her partner, Duncan, travelled to Graz, Austria, to visit their godson and then they enjoyed a grand tour of Italy.
They were hardly alone. The 17-hour flight direct to Dubai was packed with New Zealanders and it is safe to say that many of them will experience an exchange rate shock. After all, there’s a financial rule in life that says the moment you go overseas the exchange rate will plummet. You become inured to the knowledge that your next coffee will cost around $NZ10 to $12 or more.
There’s another ironclad Law of Travel. It says: There will be painful fees and steep exchange rates imposed by banks. On this score, Susanna was well prepared thanks to a good piece of word-of-mouth that circulated in our office.
Back in May, Deborah travelled to Italy and in August Mark journeyed to Japan and both found the Wise card convenient and easy to use. Their tip came via early adopter Shahul who used the Wise card to pay his US dollar course fees at rates much cheaper than by credit card or by telegraphic transfer.
About the Wise Card
Most travellers use several cards issued by their banks including a travel money card, one or two credit cards and perhaps a bank-issued debit card. Each transaction attracts foreign currency conversion fees, ATM withdrawal fees and other fees. The banks charge between 2% and 2.8% of your purchase price in ‘overseas currency conversion’ fees when using a debit card. Ouch.
- The Wise card is a debit card, you open an account by paying a $14 set-up fee, and Wise provides you with a NZ dollar bank account into which you transfer funds from your own bank account. It used to be called TransferWise.
- The main feature is the ability to set up overseas bank accounts for your travel destinations, for example Sterling and Euro accounts, which you can top up before you leave if or when the exchange rates are favourable. This enables you to conduct transactions in local currency without attracting exchange rate fees. When in Rome pay like a local in Euro at restaurants and retailers.
- The advantage over banks is that Wise sets better conversion rates and much lower fees. They use the mid-market foreign exchange rates and unlike the bank or other cash transfer agencies such as Paypal or Western Union, they do not add a markup. With Wise the cost of currency conversion fees is 0.35% for mainstream currencies such as AUD, GBP, USD, and EUR.
- Free ATM withdrawals up to NZ$350 every 30 days, then fees apply.
- The Wise card works with your smart phone. It has a user-friendly app that makes it easy to track foreign exchange rates and manage your money. You see your transactions in real time. Wait a few seconds and you can confirm that your payments have gone through.
- You don’t necessarily need the physical card as you can pay digitally with google pay or Apple pay. No need to buy tube tickets on the London Underground, just use PayWave at the turnstiles to travel like a local.
- When you come home, simply convert surplus currency to NZ dollars and transfer back to your own bank account. And a final tip, keep your Wise account in case you want to make payments in foreign currency to the local bank accounts of family members overseas.
We are not promoting or selling Wise card. We are sharing about our personal experience of the card, and this does not constitute financial advice. The money held in your NZD Wise account does not attract interest. In terms of the money in your account, Wise, a UK company says it parks the money “in top tier banks, and government bonds, separate from Wise’s own working capital. This keeps customers’ money safe, and means funds are available whenever they’re needed, so you can spend or withdraw your Wise balance whenever you like.” Refer to the Wise website for further information.