You may no longer need to worry about exchange rates while you’re on holiday. Or worse, get a rude shock when you receive your credit card bills and find out that you’d spent more than you realised on vacay, no thanks to marked up conversion rates by banks and a plethora of hidden charges for overseas spending.

Fintech company TransferWise has just launched its Platinum Debit Mastercard which could just help you save money on your next holiday in a few ways. It’s touted as the first travel debit card in Asia that uses real exchange rates, ie. what you find on Google, with no mark-ups. But that's not it. The fees it charges for cross-border transactions are also estimated to be six times cheaper — the market average is 4%, while TransferWise’s average is 0.67% Plus, users can withdraw up to S$350 every 30 days at ATMs overseas with no card charges. While some credit cards issued by banks such as DBS allow for free overseas withdrawals, most still charge a service fee that ranges from $2 to $7.

Sounds fab, but is it all it’s pimped out to be? I tried the card on a whirlwind one-day trip in the shopping mecca of Bangkok and this was what happened.

Recent studies by research agency Capital Economics revealed that Singaporeans lose S$1.1billion a year in fees on overseas spending, no thanks exchange rate mark-ups by banks, transaction fees, card ownership fees and more. That averages out to $650 per household, enough for a holiday to Bangkok or Bali.

Take Kiyan Foroughi, a Singapore-based entrepreneur who travels to Jakarta frequently for business, for example. The founder of a digital consultancy travels around the traffic jam-plagued city on Gojek or Grab bikes, each ride costing about S$1-3. “But I noticed [on my bills] is that each time I was charged a $0.50 transaction fee, for every $1 or $2 trip,” he explained. “I take 100 or 200 trips a year, so that’s $50-100 extra, just in fees alone.”

The London-based company was founded in 2011 as an online money transfer service, and now processes about $7billion monthly for its 6mil customers globally. It went on to launch its multi-currency account and debit card services in the UK, US, Europe Australia and New Zealand. Singapore is the first country in Asia where the company has introduced its travel debit card. It’s set to land in Japan next year. Like other payment services, TransferWise is regulated by the Monetary Authority of Singapore here on our shores.

A week prior to my Bangkok jaunt, I signed up for a card on the TransferWise website (it’s free). You’ll have to verify your identity with either your SingPass login, or uploading certain documents. I uploaded a photo of my passport, and was verified almost instantly. My card arrived in the mail in less than a week. I then activated the card on the TransferWise app, and was good to go.

I skipped a trip to the money-changer before flying off. I’d decided to depend solely on the card for my expenditure on this trip — I’ll pay by card when I can, and whatever cash I need, I’ll use the card to withdraw from ATMs there. Still, had I changed money at the money-changer, I’d have gotten a lower rate anyway. At the time I was travelling, the rate on TransferWise was S$1 = 21.814THB; while Travelex at Changi Airport’s was S$1 = 20.601THB.

Bear in mind that this is a debit card, after all, so before you begin spending, you’ll need to deposit money into your TransferWise account, a multi-currency account that allows you to hold over 40 currencies.

I started off by depositing a modest S$50 — from the comfort of my hotel in Bangkok, no less — and it took mere minutes before the money appeared in my account. There’s a service fee of $1.40 (there are no charges if you top up via bank transfer or Paynow, though the money will take about one hour to arrive in your account). I choose not to convert my SGD to Thai baht (THB) to avoid double conversion and service fees.

For those who have more than one currency in their account, eg. USD and SGD, the card automatically picks to use the currency with the lowest exchange rates when you spend. It’s also worth noting that any money left over after the trip can be transferred back to your bank account. Talk about simplifying your life.

I got an auto-generated PIN along with the card, but decide to change it to something I can easily remember. After all, before making contactless payments with the card, I’d have to pay for something the old-fashioned way, ie. by keying in my PIN number. To change my PIN, I headed to an ATM at my hotel lobby.

And since I was already at the ATM, I decided to withdraw some cash at the same time. Why not, when you get free withdrawals at ATMs up to S$350 every 30 days (beyond that, there’s a 2% charge). I tried withdrawing 500THB but was notified that there’d be a 200THB surcharge. I later find out that although TransferWise doesn’t charge for overseas withdrawals, the local banks still might. I decided to live life on the edge and go completely cashless in Bangkok this time.

For my first transaction, I paid for candy in a convenience store. It feels slightly ridiculous paying for a packet of mints by card, but hey, it’s all in the name of work. The mints cost 34 THB and after a conversion fee of, er, S$0.01 (fees vary from country to country, and is 0.65% in Thailand), the bill comes up to a grand total of S$1.34.

Next, I order a Grab car to head to a nearby mall, after first storing my card details on the Grab app. Payment went without a hitch and the trip cost 70 baht, which is S$3.18, inclusive of a fee of S$0.02.

While at the mall, I paid for stuff with both the TransferWise card and a DBS MasterCard Platinum credit card to compare. The exchange rate on Google (and therefore what's reflected on TransferWise) at this time was an average of S$1 = 22.17THB. What my credit card company charged me (as I found out only after my trip when I checked my bank statement later on) S$1 = 21.44THB, which presumably includes miscellaneous fees and mark-ups.

I bought a dress for 1,345 THB and paid with my DBS credit card, which came up to S$62.76, according to my bank statement. Had I used the TransferWise card, I’d have paid S$61.06, inclusive of the 0.65% conversion fee, which would've saved me $1.70.

Next, I decided to stock up on Thai snacks at the supermarket, which cost 503THB in all. I used the TransferWise card this time, and thanks to an alert from the TransferWise app, I immediately know that I've just blown S$22.84 on junk food. If I'd used the DBS credit card, it would've come up to S$23.46.

The savings I got on this prudent shopping trip may seem like chump change, but think of how much the difference would've been if I'd bought a 50,000THB bag instead of a dress on sale. Don't need to reach for the calculator. On TransferWise, it'd cost S$2,270; on my DBS credit card, S$2,332. That's a difference of S$62, enough for a lavish dinner, and then some.

Every time I swiped the TransferWise card, I immediately got a notification from the app how much I’d spent in both THB and SGD, the exchange rate used, and the conversion fee charged. I probably would've never bothered to find out just how much exactly this iced coffee would've cost in SGD otherwise (yes, Mum, I know I ought to be more diligent about these things).

You know how when you’re shopping overseas and hurriedly swipe on the XE app to calculate the conversion rates? And how when your credit card bills arrive, what you end up paying is always higher than what you’d calculated earlier? Well, these credit card bill shocks may be a thing of the past. The exchange rates on Google that TransferWise uses hardly differ from what we found on the XE app.

The card does make overseas spending a lot easier and hassle-free, while helping you save money, by way of better exchange rates and next-to-nothing conversion fees. Did we mention that if you lost your card, you can immediately freeze the account on the app, rather than having to call the bank to cancel your card? Likewise, you can unfreeze the account immediately if you find the card later on. I also liked knowing immediately how much SGD I spent on each transaction, rather than wait till my credit card bill arrives.

Having to deposit money into the TransferWise account can be a double-edged sword, though. If you end up spending more than you’d planned, it means having to deposit more money and incurring more service fees. On the other hand, it forces you to stick to a budget. Well, that's just part and parcel of adulting.

More info at https://transferwise.com/sg.

Photos: TransferWise, Jasmine Teo