There are many factors to consider when planning an overseas journey. You want to keep your money safe; you don’t want to pay excessive transaction fees; and moreover, you want the comfort of making easy payments. You have a three options: Either you use a special travel card, or you use your VISA or Mastercard, or you exchange your cash before the journey starts. Let’s consider each option before you decide.
- Travel cards
There are many options in terms of travel cards or international accounts. FNB and Absa offer the Multi-currency Cash Passport, Standard Bank the Shyft Global Wallet and Amex the well-known Travellers Cheques.
Although these options make it easy to pay in different currencies, the reality is that travel cards often involve fees when you upload money or withdraw it again.
FNB and Absa’s Multi-currency Cash Passport allows you to upload money on your card beforehand and transact with it in one of four currencies, namely dollar, pond, euro and Australian dollar. When you upload money – the upload fee is a percentage of the total amount – the exchange rate is fixed there and then to prevent any nasty surprises while being abroad. You can withdraw money from any Mastercard ATM, which will cost you anything between R30 en R40, depending on the exchange rate. Also consider the once-off cost of the card, which differs from bank to bank.
Standard Bank’s Shyft Global Wallet operates with an app on your cell phone. Withdrawal at the ATM is the same as with other banks’ travel cards, and you pay a fee of 2,02% of the amount that you upload. You can also order a physical card if you want to.
If you want to look more closely at the different options, visit these:
Standard Bank Shyft Global Wallet
The Lightcard is a new card that will be launched soon and allows you to pay in a variety of different currencies and to keep a direct eye on exchange rates. Read more here for more information.
Travel cards’ greatest benefit lies in its safety and being able to keep track of your spending in a more careful way. In the case of normal banking cards, you may only see the fees on your bank statement long after you have returned from your holiday, while travel cards keep you updated on your spending and the applicable costs through cell phone apps. Changes in exchange rates can sink your whole budget and it is therefore handy to fix the exchange rate beforehand.
- Debit and credit cards
The option that presents with the least trouble is to simply use your existing bank card for withdrawals and payments. Remember that you must inform your bank before going abroad if you plan on using your card for transactions. Whether you choose to take your bank card or use a travel card, it is still a good idea to take your bank card along and inform your bank of your journey abroad. This pricelist gives you an idea of what transactions with your bank card would cost you now:
International withdrawal and transaction fees for 2018
| Provider | International cash withdrawal | Cost if you withdraw R1 000 | International payment | Links |
| FNB Gold or Premier debit or credit cards | Credit card:
R65 + R1,90 per R100 + 2,75%
Debit card: R60 + R1,90 per R100 +2,75% |
R111,50 | 2,75% of transaction | Credit crds:
Gold: Price guide Premier: Price guide
Debit cards: Gold: Price guide Premier: Price guide |
| Nedbank Classic, Gold en Platinum debit or credit cards | R40 + R1,4 per R100 + 2% exchange fee | R74 | 2% of transaction | Price guide |
| Standard Bank credit card | R40,35 + R2,02 per R100 + 2,75% exchange fee | R88,05 | 2,75% of transaction | Price guide |
| Virgin Money credit card | R25,22 + 2,75% exchange fee | R52,72 | 2,75% of transaction | Price guide |
| Diners Club | R35 + R2,2 per R100 + 2,75% exchange fee | R84,50 | 2% of transaction | Price guide |
| American Express | R40 + R1,32 per R100 + 2% exchange fee | R73,20 | 2% of transaction | Price guide |
| Capitec debit and credit card | R50 + 0,2% exchange fee | R52 | 0,2% of transaction | Price guide |
| Absa debit and credit card | R50 + 2,75% exchange fee | R77,50 | 2,75% of transaction | Price guide |
The table indicates what it would cost you to withdraw cash from a VISA or Mastercard ATM, as well as what it would cost to perform a transaction with your card. The exchange fee is a fee that is charged to exchange rands for another currency. If a dollar costs R12, for example, you will in fact pay R12,33 for every dollar if the exchange fee is 2,75%. Capitec wins the race in terms of payments and withdrawals – their transaction fee is most probably less than it would cost you to upload money to a travel card.
Hint: When you want to make a payment abroad and you are asked if the transaction should be in rands or the local currency, always choose the local currency instead of rand as it will always be cheaper.
- Cash
To have your cash exchanged for another currency means you know exactly what you pay for commission and at which exchange rate you exchanged the money. This makes it easy to calculate what products cost overseas because you always work in the same exchange rate. Cash is also ideal in places where there aren’t ATMs around every corner.
Hint: Make sure you exchange your cash before going to the airport. Commission on exchanges are often higher at airports than at other banks.
Which is the better option?
It remains your responsibility to do the homework and consider the different price structures. Choose the option that will work the best in terms of what you are willing to pay for card security, what would be the most comfortable and how many transactions you plan on making. It is however wise to at least have a small amount of cash with you and to still activate your credit card before going abroad. If you plan on making large single transactions, a travel card is the best option as the fee would not be calculated on the percentage of the purchase amount. It also depends on the fee percentage charged when you upload money to your travel card. You may pay a bit more per transaction with your bank card, but you save on the once-fee to obtain a new travel card.
Experienced travellers who spend a lot of time in one country may want to open a local bank account to perform transactions with a local bank card. You generally need a passport and proof of residence. You can use SWIFT payments to transfer money to your new account at a fee of about 0,5% of the amount.
Make sure that you compile a comprehensive budget for your holiday and make provision for the fees that you will be paying – then you won’t be met with any nasty surprises upon your return.
Remember, this is only a guideline and it is wise to talk to your banker or financial advisor before deciding.
Enjoy your holiday!
