The price we pay for convenience foods is usually a few extra pounds around the hips. The price you will pay for a new convenient method of cash from Visa will be a few extra pounds out of your bank account. And another PIN number to remember.
Fexco, the Killorglin-based financial services company, has just announced the launch of the Fexco Visa TravelMoney Card, yet another flexible friend to join the little group already tucked in your wallet. This one doesn't let you buy anything on credit, however; instead, it acts like an electronic travellers' cheque or cash purse out of which you can withdraw money, via any ATM machine worldwide showing the Visa sign.
If this sounds familiar, it is. Thousands of us already own ordinary bank ATM cards that can be used to withdraw cash from hundreds of thousands of ATM machines worldwide: Bank of Ireland current account users for example, belong to the Mastercard Cirrus scheme and AIB users to the Visa Plus scheme. Both provide the same service: the ability to key in your existing PIN number to withdraw pesetas while in Spain, francs in France, deutschmarks in Germany, dollars while in the US etc. All you have to ensure is that there is sufficient cash in your account to cover all the withdrawals. In the case of your Cirrus or Plus-friendly ATM card, the charges amount to whatever the bank exchange rate is on the day plus 1 per cent of the value of the transaction (minimum £1) and the ATM transaction charge, usually about 17p. If you withdraw 1,000 French francs from an ATM in Paris, it will cost 10 francs at whatever the exchange rate is on the day and the 17p ATM charge.
The new TravelMoney Card operates somewhat differently. For one thing - and this is not at all clear from the Fexco literature - the card is issued either in US dollars, sterling or from next January, euros. Depending on where you are visiting, you choose the currency. If you are visiting a nondollar/sterling/EMU country, Canada or Australia for example, you will end up paying an additional 1.75 per cent of the conversion rate. Visa's exchange rates are the most competitive because of the huge volume of business it does and certainly beat hotel, shop or street bureau de change offices. They are also cheaper than the banks, but only slightly so. The other services this new card offers: balance enquiry and transaction history, no expiry date, real-time transactions and multiple cards (for which you must pay £2 sterling per extra card) and a 24-hour replacement service are all very useful and more than you can expect from your current bank ATM card, though bank representatives say they will make an effort to replace a stolen or lost card. The spare TravelMoney Card will be especially useful if you lose one, or for other family members to use, but joint bank account holders also currently have access to a spare card. It is being suggested that the TravelMoney Card has been brought out because Visa - which allows its credit-card customers to withdraw cash using their cards but charges both commissions and interest on cash withdrawals - is losing market share to the cheaper Cirrus and Plus facilities. And while it may be that the Visa foreign exchange rate is a few pennies more competitive than the banks', a quick glance at the terms and conditions brochure shows that its transaction fees are considerably higher than Cirrus or Plus.
Every time you use a TravelMoney Card you will pay a 2 per cent commission on the purchase amount. (The Cirrus/Plus commission is 1 per cent.) If you use a second, spare card to make the same purchase you will be charged an additional £2 sterling. Fexco declares that the first three transactions made will be free, but thereafter a charge of "USD1" will be levied - that's $1 to the rest of us - or the equivalent sterling rate, .65p. On top of all this, however, if you "obtain your Visa TravelMoney Funds in a currency other than the currency in which your card was issued, we will increase the conversion rate" - the rate Fexco claims is more competitive than the banks' - "by an additional 1.75 per cent and retain this amount as compensation".
A worse-case scenario is as follows: you withdraw 100 Canadian dollars in Toronto using your TravelMoney Card. The commission charge works out at two Canadian dollars or approximately £1 sterling. You have used your spare card and have been charged an additional £2 sterling. Since you have used up your three free transactions you also have to pay an additional 65p sterling. Total charge, based on the current Canadian dollar/sterling exchange rate is approximately £3.65 sterling or about 7.50 Canadian dollars on top of the slightly elevated exchange rate because your card is issued in sterling and not in Canadian dollars. A worse scenario is if you lose your card in Toronto, since it will cost you a minimum of $50 (or the sterling equivalent) to replace it, says Fexco.
This new card may be "convenient" and "safe", but "economical" it is not if you already have a convenient and safe Cirrus or Plus-friendly ATM card in your pocket.
