Cash Vs Credit Card Vs Multicurrency Card For Travelling Overseas

Team multicurrency cards, credit cards or cash for overseas expenses? We present you the case for each of the three payment methods to see if it could convince you to change your mind.

As travelling once again becomes a norm, I’m sure many of you have planned for your long-awaited travels.

Whether you’ve managed to snag low ticket prices or got a discount off your Airbnb, why wouldn’t you want to maximise savings on your overseas expenses right?

If you’ve been stuck in your old ways of using cash for all your expenses, maybe it's time you be more open to other payment methods. It could either earn you more rewards or save you the hassle of fumbling through your wad of notes.

But who’s to say that cash might still be the best option for you? We deep dive into the different payment methods to see which can give the most bang for your buck.

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Planning for your trip soon? Compare the best travel insurance plans to get the best plan at the lowest price!

What are multicurrency cards?

As its name suggests, multicurrency cards hold multiple currencies for seamless payments overseas. Not only do they allow you to easily switch between fiat currencies and digital assets, but multicurrency cards also provide a host of benefits like low or zero foreign currency transaction fees, attractive currency conversions based on interbank exchange rates, as well as free overseas ATM withdrawals. But of course, every multicurrency card comes with its different set of benefits.

With the introduction of multicurrency cards into the markets in recent years, you’ve probably heard of the more well-known cards like YouTrip that spearheaded the introduction back in 2018, followed by others like Revolut, Instarem Amaze, Wise and Wirex.

See also: Revenge Travel 2022: 16 Top Travel Tips To Satisfy Your Wanderlust

See also: Multi-Currency Savings Accounts 2022

Why should I use a multicurrency card?

#1 Low or no foreign exchange fees

The best thing about using a multicurrency card is to take advantage of its low or zero foreign currency exchange rates, compared to credit cards which have a minimum of 2% foreign currency exchange rate.

Multicurrency cards also boast of their competitive exchange rates, which are usually much higher than credit cards. This means that you’re able to take advantage of the prevailing exchange rate when you make purchases in foreign currencies, unlike credit cards that have a less favourable exchange rate.

#2 Foreign currency e-wallets

To further lock in attractive exchange rates, some multicurrency cards have e-wallets that allow you to store your funds in foreign currencies. For example, if the exchange rate for the Malaysian Ringgit is at an all-time high, you can deposit money into your MYR e-wallet to lock in great rates and use the funds to pay for your purchases online or when you’re abroad.

Don’t underestimate the usefulness of these nifty features, as they can significantly save you a lot of money when you’re travelling overseas. Depending on which country you’re going, it’s best to discern for yourself which muticurrency card is best for purchases there.

#3 But… you might have to pay to withdraw cash

Multicurrency cards might seem like the best option there until you need to withdraw cash. And most of the time, it comes with a fee.

Especially when you want to make payments at street stalls or night markets where they don’t accept cards as a payment method, you might have to scramble to an ATM (that can be quite hard to find) and, on top of that, incur withdrawal fees that can be quite pricey.

Miles credit card rates

See also: Best Air Miles Credit Cards Singapore 2022

Cashback credit card rates

See also: Best Cashback Credit Cards in Singapore 2022

Why should I use a credit card overseas?

#1 Rewards 

Whether you’re looking to maximise cashback on your purchases or accumulate miles, the greatest benefit of using a credit card is its attractive rewards. 

Even if multicurrency cards do offer rewards on your purchases, you might realise that they are significantly less attractive than credit cards. Credit cards emerge as the top payment method if you’re looking for rewards, as the cashback and miles raked up overseas can be of a significant amount.

See also: Best Rewards Credit Cards In Singapore (2022)

#2 Convenience

On top of that, credit cards also offer you the most convenience since you won’t have to go out of your way to apply for a new multicurrency card just for your travels. But do ensure that you check before bringing your credit card overseas — some credit cards require you to activate the magnetic stripe overseas before you can pay.

#3 But.. high foreign exchange rate

However, beware of the high foreign exchange rates that come with credit cards. Take a look at the list, and you will realise that the lowest foreign exchange rates start from 2%, and it can go all the way up to 3.25%.

Even a conservative amount of S$1,000 on your overseas expenses can cost you up to S$32.50 in extra expenses, and it can definitely accumulate into a significant sum that you might regret paying.

So always take note if the rewards can outweigh the additional foreign exchange fee that your card charges you.

Why should I use cash overseas?

#1 No hidden or additional fees

When it comes to cash, what you see is what you get. It is the most straightforward mode of payment because there are no hidden fees that you can possibly incur. 

With credit cards and multicurrency cards, you might miss out on some hidden fees that you have to pay if you don’t read the fine print properly. And when you find out that you have incurred extra costs, it’s too late because you have already made payments

Cash is just something that you can’t go wrong with, the only thing you need to take note of is to make sure that you count your cash correctly. If you’re not familiar with a foreign currency or meet a dishonest stall owner, you might end up paying extra few zeros without even knowing.

#2 Lock in competitive rates

Cash also works like an e-wallet whereby you can lock in rates when they are favourable. Simply change all your money when rates are good and you’ve essentially managed to maximise its value.

You won’t be subjected to the prevailing rate even when rates are bad.

#3 But… they are a hassle to keep

As you know, keeping cash can be especially troublesome to keep and take note of. Instead of keeping a single card on hand, you’ll have to fumble through the multiple notes and coins that you have. This makes it hard for you to keep tabs on how much money you have left, besides constantly counting your cash.

Paying can also be quite tedious if you’re not used to foreign currency, compared to a single tap or swipe with your credit card.

Planning for your trip soon? Compare the best travel insurance plans to get the best plan at the lowest price!

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