Traveling is often expensive enough. We therefore prefer not to spend too much money on all kinds of extra costs that the banks eagerly charge us to withdraw and pay money abroad.
We are regularly asked by our readers what is the best way to avoid such costs. People often think in the direction of exchanging money at an exchange office, but that is not necessarily the best solution.
In this article we will tell you which are the cheapest ways to withdraw and pay money abroad. So be sure to read on.
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How to save on your travel expenses
The truth is, we haven’t set foot in a bureau de change in years. That is actually not quite correct because a few years ago we did when we went to Argentina .
Back then they still had the Blue Dollar, an unofficial exchange rate that was much cheaper than the official exchange rate used by the banks.
We traveled there like drug lords with many piles of banknotes hidden in our luggage. That was also the only country where we saw both locals and tourists paying in hotels with piles of banknotes.
But apart from this one exception, we always travel with only our debit and credit cards and a little cash that we collect at an ATM.
Withdrawing money abroad
We prefer the ATMs (ATMs) because they have an exchange rate close to the official exchange rate.
Exchange offices have to earn their money on this spread (the difference between the buying and selling rate of the currency, often referred to as the commission), so they use a much larger spread.
You will therefore also guaranteed to get a worse exchange rate at an exchange office than at an ATM.
At the moment we have already been able to use our bank cards to withdraw money in all the countries we have been to.
From Japan, South Africa , Malaysia to South Korea, money came out of the wall without too many problems.
Only in South Korea, a country where you would not really expect it due to the technological lead, did this prove a little more difficult. But if you found the right machine, you could also withdraw money here.
Our advice would therefore also be to ignore the exchange office and travel with your debit/credit cards and a little spare cash.
It is best to take at least 2 cards with you, after all you will see that a card chooses the worst possible moment to suddenly refuse all service. With 2 cards you still have a spare card to continue your journey without inconveniences.
Murphy’s law is also why we recommend that you bring some spare cash with you.
Suppose that both cards refuse service or do not function at the ATM, you still have the option of exchanging your cash in a currency exchange office in this way.
That way you are still temporarily de-panned until there is another solution.
Not all cards are created equal
However, it is best not to take the first best bank or credit card that you have in your wallet. With some cards, the costs add up to pay or withdraw money abroad. Banks sometimes charge a fixed amount per money withdrawal and on top of that also take a profit on the exchange rate that they charge you if the money withdrawal is in a foreign currency.
Here is an overview of the costs that you may be confronted with and the current rates that are charged:Fixed cost per cash withdrawal charged by the bank where you are a customer: € 2 – € 5
Exchange commission if you withdraw money in another currency: 1.5% – 2.5%Fixed cost charged by the bank where you withdraw money: € 2 – € 5
Some banks only charge the fixed cost, others only the commission. Still others charge both. The third cost does not come from your bank and so you can’t solve it by taking another card, but luckily you can also avoid it.
We will come back to that later.
Which card do you choose
We have some credit cards that we use in Belgium but because of the costs they charge abroad we have 3 special credit cards that we use when we are travelling.
2 of these cards use the official interbank exchange rates without the additional 1.5%-2.5% exchange rate fee that is common with traditional banks. The third card does charge a small commission, but this is only a fraction of what the traditional banks charge. The advantage of the third card is that the linked account allows you to hold multiple currencies.
You will be amazed at how much money you save on costs.
The good news is that you too can avoid those costs. You may already have an interesting card in your wallet. For that you have to compare the small print of the different cards you have.
But if you don’t have such an interesting card today, you can also request it for free.
After all, the 3 cards we have are free and accessible to everyone in the Netherlands and Belgium.
The first is the Revolut card.
Revolut is a fintech player that was founded in 2015 in England by 2 ambitious Russians with a solid career in finance at companies such as Credit Suisse and Lehman Brothers. It took until the end of 2018 before they applied for a banking license, not in the UK but in Lithuania.
Meanwhile (since the end of 2021), Revolut bank is available in both the Netherlands and Belgium. Existing cardholders can convert their e-money account to a bank account. The assets will then be protected up to €100,000 by the Lithuanian financial regulator.
When opening a new account you will be asked if you want to join Revolut bank. Since there are only benefits associated with it, I would definitely recommend it.
Revolut is a bit of an all-rounder. If you install the app you will see that you can also trade in cryptocurrencies and commodities with it. There are also many useful features for travelers such as purchasing lounge passes and the “Smartdelay” that entitles you to a lounge pass in the event of a delay. I mainly use them for spending abroad, because of the favorable exchange rate.
We used this card for all our small expenses in Japan and South Korea. The Revolut card is a prepaid Mastercard .
So you can use them worldwide wherever Mastercard is accepted.
The card is supported in Apple Pay, Google Pay, and Garmin Pay. Immediately after your application you already have a virtual card available that you can use with your phone. You pay a one-time cost for the delivery of your physical card, depending on where you live. (this cost is about €5).
We did a few checks where we used our Revolut card and a Mastercard from Argenta (an ordinary Belgian bank) on the same day.
The exchange rates of the Revolut card were indeed better than those of our card from Argenta.
This is due to the 1.5% exchange rate commission that Argenta uses.
Revolut, on the other hand, charges no exchange commission and uses standard interbank exchange rates.
As we mentioned, the Revolt card is a prepaid card.
You must therefore first load money on the card. You can use Revolut’s handy app for this.
You can top up money via Google Pay, another bank or credit card or a bank transfer.
In the first 2 cases you will see the money appear immediately. If you transfer money, it usually takes 2 working days before you can dispose of it.
There is no charge to top up money on the card. So you can always top up small amounts to limit the risk of fraud.
In addition, you can see a real-time overview of your transactions in the app . If you notice something that is not correct, you can directly block the card via the app .
This is also useful if you suddenly no longer find the map.
You can also reactivate the card in the app.
If you suddenly find the card in a place where you would normally never put it, something that happens to us once, you can use it again without any problem.
On your Revolut you can store money in 3 currencies, USD; GBP and EUR.
Handy if you regularly need a certain currency and don’t want to exchange it every time or if you think you can exchange your money now at an interesting rate while it will soon rise. Of course you can convert money from one currency to another at any time.
Below you can see the real-time overview of your expenses. If you wish, you will also receive a push notification on your mobile phone for every transaction. Revolut also gives you an overview of your spending by country, store or category. Does your money always run out faster than you would expect? Here you can see what you spend the most on…
You can also request statements of your expenses in PDF or Excel format. This can be useful if you want to declare expenses to your employer, for example.
A final advantage of the Revolut card is that you can withdraw up to € 200 per month for free worldwide .
Below we summarize the most important advantages and disadvantages.
- No exchange commission, Revolut uses the prevailing interbank exchange rate (limited to GBP 1000/month -> approximately €1150/month)
- Real-time tracking of your expenses
- Collect up to € 200 per month at no cost
- Secure: You log in to the app with your fingerprint, you have an overview of all transactions on your mobile phone, you can block your card immediately.
- If you wish, you can also set up a fraud check based on the location where you use the card with the one on your phone.
- This is a prepaid card, it is not suitable for rental cars, refueling and some hotels. For this you need a “real” credit card.
- Limit of €200 on free cash withdrawals. On the low side if you make a lot of cash payments, but of course still better than nothing.
- No Dutch info on the site