Before we start … let us define the word ‘wise’.
Signing up for a Wise Debit Card was one of the best decisions that I have ever made (as a ‘traveler’). It saves me money and makes my life easier.
I have been stupid … I have traveled around the World for 8 years! … thinking that paying 3% to get my money … was ‘normal’. I found out … that 3% is not. I got WISE!
I recommend that you have a look: follow this link.
- I can spend / send money in any of those currencies without fees
- I can set up Direct Debits in the UK, Europe, US and Canada
- I can pay in the local currency of any country, avoid ‘Dynamic Currency Conversion fees’, and trust Wise to give me an excellent ‘real’ exchange rate
- I can securely authorise payments using the Wise App on my smartphone
- I receive instant notifications on my smartphone of every transaction
- I can use Google Pay or Apple Pay in supported countries
- I have a ‘Digital’ Debit Card that I can use for online purchases
This is how it works for me …
MULTIPLE ACCOUNT BALANCES
I am from New Zealand, so my main bank is in NZ and my money is mainly NZ$s. I have a business in the USA which earns US$s. My family are in the UK, so sometimes I need GB£s.
I set up 3 Wise account balances: NZ$, US$, and GB£.
As Good as a Bank Checking Account
Think of each ‘balance’ as working like a separate bank checking account … they just contain different currencies. There are no monthly fees.
I keep a small ‘float’ in each of these balances and top up that float as and when required. It usually takes 2-3 business days for money to arrive from outside sources. The Wise account balances do not earn interest, so I make sure that I have enough ‘float’ in each account but not too much.
I can transfer money between my Wise accounts at the ‘real’ exchange rate with a small fee. This means that I can wait until the exchange rate is in my favour if, say, I want to convert my US$s into NZ$s and transfer that money out of Wise into my main NZ Bank Account.
RECEIVING NZ$, US$, and GB£
Each Wise account balance comes with full bank account details applicable to that currency’s country.
For example, for my US$ balance I have (1) ACH and Wire routing number (2) bank account number (3) USA bank address. If someone in the USA wants to send me US$s I give them these details. If someone from outside of the USA wants to send me US$s, I also have a SWIFT/BIC number that they can use.
SPENDING NZ$, US$, and GB£
If I use my Wise Debit Card to buy goods in NZ$s, US$s or GB£s the amount is deducted from that balance without fees.
If I use my Wise Debit Card to buy goods in other currencies, I always choose to pay in that country’s currency and I let Wise automatically choose which balance to debit and do the exchange rate conversion at their ‘real’ exchange rates.
If I have to send money to a 3rd party, Wise works like any other online banking service. I just ask the 3rd party for their bank account details and send them the money. If I am sending NZ$s, US$s or GB£s it is easy. If I am sending another currency Wise charge (1) a fixed fee and (2) a conversion fee … but, it still works out a lot cheaper than using my NZ Bank.
Wise only allow you to withdraw upto US$300 from ATMs per month without fees. Once you exceed US$300 Wise charge a fee.
For that reason, I tend to use my normal Bank Debit Card for ATM withdrawals …
… and I use my Wise Debit Card for everything else.
DIGITAL DEBIT CARDS
One of my main problems with Credit & Debit Cards is that I am always on the move … when they expire it can be difficult to get a new one (1) sent safely to my country / address (2) get to me in time before I’ve gone. In fact, when I signed up for my Wise Debit Card, I had to send the physical card to my address in New Zealand … I have never seen it and I have never used it.
With Wise, I have a Digital Debit Card as well as a physical one. It does exactly the same as a physical one. I can set up more than one if I want to.
Obviously, I can’t use it in an ATM but (as aforementioned) I don’t use my Wise Debit Card to take out money from ATMs.
I use this Digital Debit Card to make all of my online purchases.
ACTUAL EXAMPLE – DEBIT CARD PURCHASE
I made a purchase on a Philippines website using my ‘Digital’ Wise Debit Card. The price was PHP1,865. This is how Wise processed that transaction:
Wise automatically chose to debit my NZ$ balance and converted the PHP1,856 at the Wholesale Exchange Rate to NZ$52.16. Wise charged a conversion fee of NZ$0.29c (0.56%).
NZ$0.29c is less than 1/5th of what I would have paid using my normal Bank Debit Card (who charge about 3%).
PLEASE NOTE: PHP is not a major Wise currency. If I had made a purchase from, say, a European Union website in EU€, I would have paid a lower conversion fee.
ACTUAL EXAMPLE – DEBIT CARD PURCHASE
I bought a new laptop computer on Lazada, Philippines. I knew that I was going to make this purchase … so I pre-loaded my Wise NZ$ account balance 3 days before I made the purchase … to make sure that the money was there. I was in The Philippines, I was on a Philippines website, and I paid in PHP: PHP48,016.
The XE.COM Wholesale Exchange Rate was:
ACTUAL EXAMPLE – SENDING MONEY
I needed to pay PHP70,000 for my 2 month rental apartment in Boracay, Philippines.
XE.COM converted PHP70,000 as US$1,264.15 at the Wholesale Exchange Rate.
Most ATMs in The Philippines have a PHP10,000 maximum withdrawal. I would have to do 7x PHP10,000 transactions. I took out PHP10,000 from an ATM in Manila Airport. With the Philippines Foreign Card ATM fee, the Visa exchange rate conversion fee, and the Visa commission … I lost 6%. To use an ATM to get this PHP70,000 would actually cost me US$1,340 … about US$76 in fees.
I got the hotel’s bank details and paid using my Wise US$ balance. This is the Wise price.
Wise converted at the Wholesale Exchange Rate and charged a 0.58% exchange rate conversion fee (on some more popular currencies, this is 0.28%) plus a US$0 fixed fee. Using Wise, my costs were US$7.33 … I saved about US$68.50 on that example alone. US$7.33 is about 1/10th of what it would have cost me if I used an ATM.