There are two types of credit or prepaid cards that can be used abroad: those in foreign currencies and those that convert them.
A reader writes to me that her prepaid card, which she could recharge directly with euros, is no longer available. She wonders if there are other similar products.
Marie-Ève Leclerc, director of web content at Milesopedia, offers three: the Wise Visa debit card, the Wealthsimple Cash and the prepaid KOHO Extra Mastercard. “All three have their particularities, but they are free,” she comments.
Obviously, when you withdraw money from an ATM abroad, you pay ATM and currency conversion fees. On the other hand, it can be used anywhere where Visa or Mastercard credit cards are accepted.
Foreign currency
Wise is an international banking technology. You open an account with your phone and you order the card in digital format (free) or plastic (7 euros). You add the card to the phone’s digital wallet.
You activate the card, you link your bank account to your Wise account and you have two choices: fund your Wise account in Canadian dollars or in currencies from around forty of the most visited countries. You can have the details of each transaction in the app.
The Wealthsimple Cash card combines a checking account, a high-interest savings account (between 3.5% and 4.5% annual return) and a prepaid credit card with 1% cash back on all purchases, with no monthly fees. You can make withdrawals in around a hundred countries (with certain restrictions such as Cuba or Turkey), without conversion fees.
“It’s less advantageous than a credit card like the Cobalt American Express, which has conversion fees, but which allows you to obtain five times the points on grocery and restaurant purchases,” continues M.me Leclerc.
Last year, Milesopedia considered the KOHO Prepaid Mastercard the best in its class. It includes no conversion fees and offers 1.5% at groceries, including Costco and Walmart. It even offers 5% annual interest on the balance! You are only allowed one international withdrawal.
More expensive
Canada Post has its own prepaid card, which can be purchased online (by creating an account) or at the post office. Activation costs $10, with monthly fees of $3, fund loading of $3, over-the-counter withdrawal of $2 in Canada, plus 2.5% foreign exchange fees.
Canada Post also offers Cash Passport, a prepaid Mastercard with a $15 activation fee, a $3 reload fee and a monthly inactivity fee of $2.80. It is used with the Zenwallet application, in particular to recharge it with foreign currencies.
Advice
- KOHO and Wealthsimple cards only offer Canadian dollar accounts.
- For ATM withdrawals, Wise charges 1.75% (for a withdrawal exceeding CA$350); Wealthsimple charges around $3.
- Financial institutions all offer US dollar accounts and credit cards, but a card like Wise is easier to use, especially for transfers between individuals in local currencies.
- Prepaid cards have no impact on your credit report.
