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Before going on holiday I would always look around for the place that would give me most Euros for my pounds. I would make sure that they didn’t charge commission. Everyone said that no commission would be charged. But this was not really true. There were 2 exchange rates - one for buying and one for selling. The truth is that there is only one exchange rate, the difference between the true exchange rate and the rate you have to pay is really commission. If the exchange rate is €1.12 for each £1, you may find that you can buy euros for between €1.08 and €1.10 for each £. When you sell it will be between €1.14 and €1.16 for each £. When you buy or sell euros as cash you usually pay about 4% or 5% commission but it is disguised within the “exchange rates”. This is the same for US Dollars or any currency in the world.
Then along came Money Travel Cards. Money Travel Cards use the actual exchange rate but admit to charging commission - usually about 1.5%. Money Travel Card can then used to withdraw money or pay for goods in the country that you are travelling to. Money Travel Cards are better than cash but are limited to about 30 popular currencies.
Revolut is the next step. When you open an account with Revolut you open an account in the currency of the country that you live in. I live in England so the currency in £. When you put money into your account you can exchange it for the currency you want (again limited to 30 popular currencies). Revolut then treats your account as if each currency has in it's own account. So if you exchange money into euros, the Revolut treats you money as if it is in two different accounts - pounds and Euros. If you also exchange money into US Dollars then you have 3 accounts - pounds, euros, and dollars. You can create accounts in up 30 currencies. I only have accounts in pounds and euros. At some point in the future I may go to American and will at that point create a dollar account. When you look at the app you can see how many £, how many €, etc. that you have.
The best part about Revolut is that, as long as you avoid exchanging over weekends, and you do not go over the maximum allowed each month there is no commission. If the true exchange rate is €1.12 then £100 will get you €112 not €108.
With Revolut you can put a virtual card in your phone wallet and a real card in your real purse or wallet and use them abroad in the same way as you would a debit card at home. Spending in euros or using an ATM in the euro zone automatically comes out of your euro account. If you don’t have enough euros in your account the rest will come out of your £ account.
You can use your virtual or real card wherever they accept Visa or MasterCard.
How do you open a Revolut account?
It was much easier to open an account than I had thought. Following this link will take you to the Revolut website https://revolut.com/referral/arthur2mg7 . Answer a few basic questions. You will then receive a link to confirm your email address. Upload a photo of your driving licence or passport to prove that you are who you say that you are and your account is open. You can then add the Revolut virtual card to you phone wallet and can start using your account even before you order your real card.
Money can be transferred into your account using Apple Pay, Google Pay, Bank Transfer using open banking, or by debit card. I chose to add money my account using Apple Pay. Because I was still uncertain at first, I just paid in £5 and used my virtual card at the local supermarket. There were no problems. This gave me the confidence to add more money and spend in another supermarket and then a larger amount and paid for a meal for 2 in a restaurant. Again no problems.
To create an account in another currency simply press ... on the main screen and click "Add new account". Then select the currency wanted. There are no further questions to answer. My first exchanged was £5 for €5.57.
I opened the account to withdraw Euros in the EU and I would need a real card to do this so I ordered a real card. The real card arrived a few days later. The first time that I used it I had to use the pin number but after this I could use the card contactless. Across the world, the amount that you can spend using contactless varies. At £100, in the UK it is a lot higher than many other countries so remember your pin number.
In the app, next to the amount in the account in £, is a down arrow. Clicking on the down arrow gives the existing balance for each type of account and a total for all accounts. Clicking on one of the currencies gives all of the transactions for that currency. It is a very easy to use app.
Is my money safe?
Revolut is not a bank, it is an Electronic Money Institution. It is, therefore, not covered by the Financial Services Compensation Scheme. Revolut is however, regulated by the Financial Conduct Authority. Your money is therefore on deposit with either Lloyds or Barclays. Any transactions that you make are processed through either Visa or MasterCard.
How much does a Revolut account cost?
There are different options for Revolut accounts with different costs and benefits but I have opened a Standard Account. It is FREE to open and has no monthly fees. Everything in this blog relates to the Revolut Standard Account.
Opening the account is free. The virtual card and real cards are free, however there is a £4.99 delivery charge for the real card. Using the virtual and real cards are free. There is a maximum withdrawal from an ATM of £200 per month after which a 2% fee applies. Even if you go over the limit, it is still a lot cheaper than getting cash from a travel agent. There is a limit of £1000 exchange each month after which there is a fee of 0.5%. This again is much cheaper than at a travel agents.
One day I exchanged £200 into Euros. Two days later the Euros were worth £207 so I exchanged then back. 3.5% profit in 2 days -great. I suppose that is why they put on the limit of £1000 each month.
There is a 1% charge for exchanging currencies over the weekend. This is still cheaper than other methods but can be avoided by exchanging Monday to Friday. If a fee will be applied, Revolut will inform you so that you can decide if you want to proceed. The reason Resolut charge over the weekend is to cover the uncertainty of making an exchange while the exchange market is closed.
If you are a frequent traveller, it may be worthwhile looking at one of the paid accounts where there are higher limits.
If you want to buy or sell crypto currencies there is a 2% charge.
In Conclusion
Revolut is a great way to spend money while you are abroad, especially for short breaks when you do not need to transfer very large sums of money.
It is probably best to open a Standard account which is free and does not have monthly fees. See how it goes before deciding whether to upgrade.
You can exchange up to £1000 / month, withdraw £200 / month in cash, and make card payments all for free.
To start using Revolut, use this link https://revolut.com/referral/arthur2mg7. I have found the app very easy and have had no problems. Let me know what you think.
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