Spending clever: five advantages of an international debit card

While traditional debit cards are useful for daily purchases and banking, they typically cannot be used outside their country of origin. This is a big problem for travellers who may need to make purchases during their trip or even withdraw funds in a foreign country.  

“If you are travelling overseas for business or pleasure, or buying something from abroad, you want to make purchases in the currency of that country,” says Erik Olwagen, head: SA distribution for international personal banking at Standard Bank. “There are always unknown fees involved like forex spreads or admin fees when making a payment in a currency that differs from your account base currency.”

Standard Bank’s Optimum Account is designed to support everyday transactional banking. Clients can manage their finances across borders, make payments and receive money from around the world. 

An Optimum Account includes full day-to-day banking services and seamless digital banking — plus you can choose the main currency: it could be US dollar, pound sterling or Australian dollar.

A Standard Bank analysis shows these three currencies make up about 80% of all foreign transactions conducted by clients, while the other 20% is a mix of about 50 other currencies, considering what Standard Bank clients send from SA.

Olwagen says customers are increasingly realising the benefits of international debit cards, not only for spending while travelling but also for investment purposes — to deal with international transfers or online purchases easily from their mobile app or internet banking. 

Protect yourself against currency volatility

“Let’s say you travel to Europe and make payments in euros with your SA card. If the rand happens to depreciate, you will be paying more for your purchases and it becomes easy to lose track of what things cost,” Olwagen says.

Instead, clients can opt to buy those euros ahead of time at a set exchange rate and spend in euros with their debit card, for example. It then becomes easier to convert to the original cost of your purchase, because you know what you paid for that euro instead of worrying about how much that glass of wine or sparkling water is going to cost you. 

Better manage your budget

Let’s say you are planning a trip to New York in 2022. During the planning stage, there will inevitably be things that you need to pay for ahead of time such as accommodation or inbound travel. In the first scenario, you can use your SA card but there may be excessive fees involved that can affect your overall budget. 

Movements in the exchange rate could also work against your budget. The Airbnb that you’re looking at today could go up in price in the days to follow should the rand depreciate. Instead, you can buy $1,000 now and deposit that into your international bank account, and use those dollars to pay for car rental, internal flights, tours and more with your dollar debit card in the months to follow. 

Make international transfers quickly and easily

The international debit card has myriad uses. Olwagen notes that many clients from across the continent who have enrolled their children in international schools or universities use such a card to settle the school or university fees — or for buying goods or dealing with last-minute emergencies without any hassle or the high costs associated with foreign purchases. 

Another benefit is to pay for the expenses associated with running a buy-to-let investment property held abroad.

He adds that it makes sense for those who plan to emigrate to start externalising funds in the currency of their new country. “So, if I'm going to move to Italy in the next six months to a year, I’ll start purchasing those euros now because I’ll have to spend in euros when making a deposit on an apartment or a house, or to purchase a car in advance. Whatever the case might be, you do not want to use your rands to cover those expenses.” 

Withdraw hard currency abroad

Another benefit of an international debit card is the ability to withdraw cash from any of the roughly 1.4-million ATMs in more than 200 countries around the world that display the Visa mark — as opposed to having to visit a forex outlet to withdraw cash ahead of time and the risk of losing the hard currency that you carry around in person. 

Imagine travelling to Thailand with a US dollar debit card. If you need cash, you can withdraw from any ATM or visit a bank to do so. The card is enabled for tap and go — an increasingly popular feature — so you can go to a bank, tap for cash, receive the money over the counter and continue with your trip. The tap functionality is not enabled in all countries and at all retailers, so in some instances, you may still need to insert or swipe your card and provide your PIN depending on the amount being spent or the device used*.

There are other limitations, such as the amount you can spend on any given day and a limit of three cash withdrawals per day. These limitations, which can be increased temporarily to suit your spending needs, have largely been put in place to protect you from fraudulent activity. 

“If your card is stolen, you can alert us immediately and we will go out of our way to have a replacement card delivered to wherever you are in the world,” Olwagen says, adding that a good way of lowering the risk yourself is to have multiple cards stored in different places.

Pay for international subscriptions

As the world becomes smaller thanks to increased connectivity, South Africans can access a range of services from abroad such as Amazon Prime or subscriptions to international publications such as The New York Times. 

Olwagen says many people do not realise they will be charged for those subscriptions in US dollar. This means the bank will apply a foreign transaction fee that you may not be aware of. 

The volatility of the rand may also affect the price of that subscription and the fees associated with the payment from one month to the next. Using a US dollar debit card to pay for those subscriptions means your monthly budget is safe from movements in the rand.

In the online gaming world, for example, almost everything is dollar based and some clients will create a US dollar debit card to make purchases. This can, however, be a risky environment where fraudsters like to hang around, and so it might be worth creating a virtual card via Standard Bank online banking or using platforms like PayPal where your card details are hidden. 

Olwagen advises consumers “to always remain vigilant and to avoid storing or writing down your PIN. Rather make use of the functionality on the Standard Bank mobile app that will display your PIN for a few seconds, disappearing thereafter. And remember, the bank will never ask for your card details. If someone is asking, it is likely to be a scam.”

Follow this link for important information pertaining to opening a Standard Bank Optimum bank account. 

Always protect yourself against fraud and scams when using your cards. To learn about the dangers, read more about common scams and fraud tactics.

* Visa debit card transaction fees apply. 

This article was paid for by Standard Bank.