A question for those who use Revolut and/or banks they do not charge any FX markup on overseas card use (e.g. Monzo, Starling etc.).
How do you organise your spend overseas?
Do you prefer to transfer an amount in advance to a Revolut currency account locking in the exchange rate and spend from here (returning funds to a GBP account when you return), or do you spend from a GBP account (with Revolut, Monzo or Starling etc.) and accept the exchange rate you get transaction by transaction?
Revolut uses an interbank rate, but imposes limits and adds a fee over the weekend, other banks tend to use the Mastercard rate (similar to the interbank rate but with some markup at weekends to cover risk).
In essence how do you balance convenience with optimising exchange rate?
When I spend in the local currency I tend to pre convert on Revolut (Mainly due to Revolut Ultra having unlimited amount) as it costs nothing on weekdays. I do this way becuase:
- I can see exactly how much in $ I have
- It helps me ish to not overspend.
- I know that I wont be charged anything
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This has got me wondering. I have a Euro 4.99 SEPA direct debit that comes out of my Wise account every month. At the moment I just have a standing order to transfer £5 from my current account a few days before and let Wise pay it from the GBP balance. Having looked into it, there doesn’t seem to be a way to set up a recurring auto conversion (i.e. asking Wise to convert 5GBP > Euro on the 1st of every month). There are probably pennies in it, so it’s not something I’m desperate to do, just wondering if I’m missing a feature.
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If in USD, I will use a USD credit card. If in EUR, I will use a Virgin card.
In other cases, I don’t pre convert. I almost never use a debit card. I will use a credit card with no FX fees or use Curve to make the conversion.
I use my Monzo card to spend.
Life’s too short.
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^ exactly this.
I spend abroad quite a bit and I just use my Monzo card. Someone will always be making money somewhere along the chain, but Monzo gets me as close to the perfect exchange rate as I need.
I have no interest in trying to time markets etc. the rate on the day is the rate I pay. Life is indeed too short.
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So I have done some research of my own.
I have compared the Revolut Exchange Rate to the Starling / Mastercard Exchange Rate for buying various common currencies for a fortnight now.
Results are quite interesting. Even if I ignore weekends where Revolut adds a fee to cover volatility and Mastercard rates widen a little for the same reason (but not nearly as much as the Revolut fee), I find it is about 50:50 as to which offers the cheaper rate.
So over time I struggle to see the advantage of Revolut for spend overseas, other than the ability to run currency accounts so easily (which is an advantage for some, but not for the casual holidaymaker would humbly suggest).
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