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Why I tried Revolut on my trip to New York – but should you?

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My purse does not contain any credit or debit cards that charge no foreign exchange fees.  I know that I should have tackled this issue way sooner as I’ve wasted money on unnecessary FX fees in the past. Last month, with my New York trip coming up, I needed a quick solution.

Why did I try Revolut?  Well, the honest answer to this question is that a friend, who works as cabin crew for British Airways, told me over a bottle of wine that it was a payment card (a reloadable Mastercard debit card) without any foreign exchange fees and she had been using one very successfully.

Revolut review

That said, Rob isn’t a fan of pre-paid cards such as Revolut (and Monzo, and Starling, and WeSwap), which is why he’s never covered it in the past.  As he wrote in the HFP comments section to a reader a few weeks ago:

“I don’t want to be fiddling around topping up a card and worrying about my balance every time I want to buy something.  You might as well get a free credit card with 0% foreign exchange fees – such as the Virgin Money Travel Credit Card – which would get you up to 56 days credit and lets you pay the bill for your foreign spend with your normal credit card bill. Why make life hard for yourself?”

But what does he know?! Here is what I found:

What is Revolut?

Revolut is an app that works as a digital wallet for British Pounds, Euros and US Dollars (amongst other currencies) letting you transfer money for free to friends or businesses.

An app isn’t any use in a shop, however.  To use it in the real world, you need to order a physical card – branded as a Mastercard – which will give you 0% FX fees on your spending and money withdrawals abroad.

Revolut quotes a number of different figures about the currencies it uses.  This is how I understand it:

You can physically hold a balance on the app in 16 currencies – USD, GBP, EUR, PLN, CHF, DKK, NOK, SEK, RON, SGD, HKD, AUD, NZD, TRY, ILS or ZAR.  These are the only currencies you can pre-purchase and lock in an exchange rate in advance of your trip.

You can transfer money electronically in 26 different currencies.  If the currency isn’t on the list above, it will be exchanged at the spot rate from another balance.

You can spend money in 120 currencies.  If the currency isn’t on the list above, eg Thai Baht, Revolut converts it at spot rate and deducts it from another balance.

The company was founded in 2015 and has just raised $66m in a Series B funding allowing for more features to be added, with the goal of turning it into a fully fledged bank.  If you were wondering how it makes money charging 0% FX fees, the answer is “it doesn’t”.  The company announced a pre-tax loss of £7.1 in 2016 on just £2m of revenue.

Revolut card reviews

How do I get started?

You must be at least 18 years old to apply.

Firstly you need to open App Store or Google Play and download the Revolut app. You can also sign up on the Revolut website here.

You need to verify the account with your phone number and can start adding money from your bank account or using a credit card (Mastercard or VISA).

If you want a physical card, and if you’re planning to use Revolut for payments abroad you will need the card, you can order one via the app. This usually costs £5 but we have a special deal with Revolut for our readers.

If you order via our Revolut link here, you will get the physical card free of charge.

Insert your mobile number and click on the URL Revolut will send to your phone. This will open the Google Play or Apple App Store.  Download the app, open it and create an account, which takes 30 seconds.

You need to top up £10 before you can select and order your free card (standard delivery).  Verify your identity (tap more -> profile -> verify identity) and your card will be with you in a few days.   If you want express delivery you do need to pay for this (£12) so stick with standard delivery, which saves you £5 via our link.

You need to verify your identity with your passport, driving licence or ID card if you want to spend more than a total of £500 with your Revolut card.

As well as the UK, you can also get a Revolut card if you live in:  Aland Islands, Austria, Azores, Belgium, Bulgaria, Canary Islands, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, French Guiana, Germany, Gibraltar, Greece, Guadeloupe, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Martinique, Mayotte, Netherlands, Norway, Poland, Portugal, Réunion, Romania, Saint Helena, Slovakia, Slovenia, Spain, St. Martin or Sweden.

How does it work?

You can top up your Revolut account by bank transfer, debit or credit card.  There is a 1% fee for credit card top ups.

My TSB credit card treats Revolut top-ups as a ‘purchase’.  Comment online suggest that some credit cards treat Revolut as a cash advance (no points, cash fee) and others as a purchase (would earn points, no fee).  There could be potential here for ‘purchasing’ frequent flyer miles relatively cheaply if you had a very high earning Visa or Mastercard such as the Virgin Atlantic Rewards card although I haven’t tested Revolut with one of those.

The money will sit in your Revolut account in the currency you’ve topped up but you can move it in between your different currency accounts at the current spot exchange rate.  If you have a bank account in the UK, are travelling to the US in a couple of weeks and the current exchange rate feels exceptionally good, you could exchange your money in advance to avoid a possibly worse exchange rate later.  This works for the 16 currencies I listed above.

What does the app look like?

Below is a screenshot of the home screen.

Revolut screenshot

As well as showing your British Pounds, Euro and US Dollar balances, the home screen shows your last transactions.  Remember that Revolut can hold a balance in 16 currencies in total, not just these three.

At the bottom are further options: Accounts, Analytics, Transfer Options and Cards.

Spending money

The main reason I decided to try Revolut was to use it in stores and restaurants in New York without paying FX fees.

Let’s get the annoying bit out of the way first:  you pretty much need to know how much you will be spending before leaving the house / hotel / wifi zone, in order to ensure your Revolut card has a high enough balance.  Outside Europe, you could be hit with a hefty mobile bill if you had to turn on data roaming just to top up your card.

Every store and restaurant accepted my card and I had no issues paying.

Sending money

After my New York trip I had £119.05 left on my Revolut card.  As it’s stupid to have money sitting on a card that doesn’t pay you interest – and probably helps the company make money with your money – I wanted to transfer the money back into my bank account.

I had to set myself up as a beneficiary by entering my bank details manually and was then able to select the amount of money I wanted to transfer. I got a notification that I’d receive my money the same day and within less than an hour the money was in my current account.

As well as paying money back into your own account you can also pay another person or a business with your Revolut app. Simply add the bank details and your money will be transferred.

Your Revolut account can also double as a regular UK and/or Euro bank account.  Your card has its own sort code and account number.  This is how the company sees the product developing.  They hope that you will pay your salary into your Revolut account, use the card for all of your spending at home or abroad and also pay your bills with it.

The travel benefits being used to sell the card now are a loss leader to get you on board in order to offer you full banking later on, backed by the $66m they just raised.  Revolut already offers personal loans at a high 9.9% APR, with the money dropped instantly onto your card.

What else should you know?

Revolut isn’t really free, although you are able to avoid all of the costs if you are savvy.

The £5 postage fee to order your plastic card is waived if you use our links on this page (which is a link that Revolut has made available to a lot of travel sites for their readers).

In theory all you need to do is top up your money and use Revolut as a normal payment card. It will exchange the currency automatically without adding fees.

At the weekend Revolut uses the exchange rate from Friday and adds a mark up depending on the currency, usually 0.5%.  If you want genuinely free transfers, make sure you do them between Monday and Friday.

Free cash withdrawals are limited to £200 per month.  After that you pay 2%.

For very heavy users, even spending on the card is not free.  There is fee of 0.5% when you spend over £5,000 in any one month.

Here is an overview of the charges:

A spare Revolut card costs £5 + £5 delivery fee

Transfers to friends or businesses take two business days – you must pay £5 to get the money across in one business day

Transactions of up to £5,000 per month are free, thereafter the fee is 0.5%

At the weekend Revolut uses the exchange rate from Friday 23:59 and adds, for most currencies, a 0.5% mark up

Three currencies DO incur a fee when spending – Thai Baht (1.5%), Russian Ruble (1.5%), Ukrainian Hryvnia (1%)

You can withdraw up to £200 per month from an ATM without paying a fee, but you pay 2% after that

To increase the ATM limit to £400 per month, you need to pay £6.99 fee each month to become a ‘Premium’ cardholder.  Premium cardholders also avoid the £5,000 per month cap on transactions.

Conclusion

My only alternative to Revolut on my New York trip would have been my American Express Preferred Rewards Gold charge card with a 3% FX fee.  Even though I would have earned 2 Membership Rewards points per £1 spent (foreign transactions earn double points) the Revolut option was still cheaper, assuming I value a Membership Rewards point at 1p.

(If you don’t know much about the American Express Preferred Rewards Gold card, take a look at this article we wrote.  You get 20,000 Membership Rewards points – worth £100 of shopping vouchers or many other things – for spending £2000 within 90 days.  The card is free for the first year and you get two free airport lounge passes!  You can cancel at any point before the fee for the 2nd year comes around.)

Using Revolut instead of a credit card doesn’t hurt your credit record which is a good thing.  Taking out a 0% credit card purely to use abroad may make it harder to get other credit cards unless you ask for a very low limit.

Obviously the FX rates are great and if you don’t mind the hassle of having to top up your money via an app in order to use the card, Revolut is a good solution when travelling abroad.

However,there are other options.  Curve is a hybrid solution – you pay a 1% FX fee on purchases abroad but the transaction is recharged to any other Visa or Mastercard which could earn you up to 1% in rewards. (Curve is free and you will be paid £5 for trying it.)

I will definitely keep my Revolut card as it’s very useful if I have to send money back home to Germany (I had to pay a fee of £10 last time I did this thanks to Lloyds) and for now I will put up with the need to keep topping up and transferring money back.

Long term I think I will look into the Virgin Money Travel Credit Card or something similar which has 0% foreign exchange fees on purchases abroad.

The Revolut website is here.  This link will waive the £5 delivery fee for the plastic card if you follow the instructions above.

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Comments

  1. the_real_a says:

    The issue with the fintech cards in general is that because they are inherently loss making whilst they grow their userbase the T&C`s and limits change every few weeks, so unless you carefully keep an eye on developments you can easily get “stung” by fees that you were not expecting.

    For example with Revolut i withdrew some money on a weekend in Thailand and found the FX rate to be far worse than what was offered by the money exchangers at the airport. In fact they were laughing so hard when i showed them. Revolut went from the best to the worst of my cards almost overnight.

    • Crafty says:

      Thailand is one of the countries where a bank rate is always much worse than exchanging cash on the street, though, so that’s not a “fair test” for Rev vs a normal bank.

      • the_real_a says:

        Quite right – but not for the airport changers! But i know what you mean. I should have said the costs after fees and charges. The point i was trying to make was that Revolut went from the best to the worst card for my needs almost overnight. You can substitute Thailand to any country and apply the latest “weekend fees” or whatever the latest whim of charge is. You need to carefully look at how the T&C`s have changed since your last trip to avoid an unwelcome surprise.

  2. the_real_a says:

    The other thing to mention about Revolut (sorry if it has already been mentioned) is that doing a conversion within the app between wallets (say GBP to USD) is based on the spot rate. A conversation using the MasterCard at the point of transaction uses the MasterCard rate + any applicable fees. Thus if you are making a large transaction you can often save a small amount by converting in the app first and then use the converted amount to make the purchase with the mastercard.

  3. Optimus Primer says:

    OT – Is it possible to take advantage of these offers by using the Lloyds Rewards American Express card or will they honor it just for US cards? https://www.universalstudioshollywood.com/corporate-partners/

    • For Universal Amex Lounge access I’ve always got in fine flashing my Amex Plat card (even when haven’t bought tickets on Amex). Not sure if would be OK with Lloyds or not although staff very friendly and a bit of banter would probably do the trick! It’s pretty out of the way to find and only limited snacks on offer, but having an air conditioned room with plentiful water and loos is a pretty handy thing to have access to regardless!!

  4. rams1981 says:

    Having gone through this, to earn points whilst spending abroad the lloyds card or curve win?

    • Depends on the underlying card you’re using. You can only link the MC/Visa to Curve, so Lloyds Amex will likely beat the earnings rate given 1% forex fee from Curve – unless you link to a card that doesn’t charge forex fee (thus can change card currency in Curve), but don’t think any of those cards would beat Lloyds Amex at 1.25 Avios pp

      • rams1981 says:

        Good points Alan. For those countries that don’t accept Amex curve wins?

  5. rams1981 says:

    Should say if you link ihg black

    • OK so non-Amex options…

      If you’ve got Lloyds card then I think it still probably wins as you’re getting 0.25 Avios per GBP-equivalent spend (as the Lloyds Avios MasterCard earns at 1.25 Avios per £5) with no fee, therefore all Avios are ‘profit’ (albeit the accrual rate isn’t great!).

      IHG Black via Curve gives you 2 points per GBP-equivalent spend but with 1% fee. You therefore need to value IHG points at >0.5p each to make it better value after clearing the fee. Definitely better than using IHG without Curve though, you get the enhanced 4 points/£ earning rate but at the cost of an extra 1.99% in fee over Curve!

      Of course if you don’t have the Lloyds card then Curve is a great route. It also depends on which rewards currency you want to collect and whether you’re chasing the £7k Lloyds voucher or £10k IHG one.

  6. I have lloyds for spending and Santander zero debit card for cash withdrawals. I thought that’s all I need. What’s this thing about spot rates? I got the impression there’s no reason to get revolut since I already have fx fee free cards for POS and ATM.

    • the_real_a says:

      Spot rates are the purest of the pure exchange rates (the exact BUY or SELL price), paid by wholesale banks to one another at any given moment. Some accounts offer this spot rate direct to retail customers (i.e. converting between digital wallets directly inside Revolut). If you use a MasterCard to convert your currency at the point of transaction then you will be charged the exchange rate determined by mastercard which is usually very close to the spot rate. Unless you are exchanging several thousands its really not material.

  7. with regards to my earlier comment about transferwise I actually move money from € to £ so their rates are good and each time I transfer there’s always a code online for free transfer. Seems revolut is good for transferring out of Uk.

    • HiDeHi says:

      I am always wary of other sites saying their transfers are “free” because that usually means they don’t charge a fee for the transfer but just hide their fee by charging a less favourable exchange rate. I would question if your free transfer with transferwise was actually the same spot rate as the xe.com rate you would get with Revolut(but I may be wrong).

      You can always download the Revolut app for free and compare their rates in real time to be sure. I can promise you that within their caps on weekdays, Revolut charges no fees for topping up, transferring and withdrawing money – at least for major currencies. It is one of the few services that is genuinely 100% free.

      It is of course a questionable business model but they are FCA regulated so your money is 100% insured by the British Govt..

      • Genghis says:

        I don’t believe Revolut is covered by FSCS but simply monies held in a segregated client money account.

      • I actually checked the xe rate and it was very very close: xe .8926, transferwise.8925 even with free voucher. What I was actually asking is: can you load revolut with another currency other than £?

  8. I travel to on average 8-9 countries per month, and eat out with colleagues on at least 10 nights per month. That’s where Revolut is priceless, whether it earns points or not! Not only do I avoid having lots of left over foreign cash, it means that one of us can pay the restaurant bill whilst the others transfer their share by Revolut. Try asking a waiter in Moscow to split the bill 6 ways and suddenly the 50 Avios you could be earning by using a “better” card seems like an utter pain in the @rse as opposed to using Revolut!

  9. N26 is another really good option. It is a fully functional online current account. They issue you a debit MasterCard (for free). And all transactions are carried out at the spot rate. You don’t have multiple wallets for different currencies (which seems like hassle for very little value?).

    If you get the paid for “black” account (5.90 per month) you also get travel insurance, phone insurance etc. You also get free ATM withdrawals which is really handy for getting cash abroad at a good rate (they charge a fee of 1.7% on the free account for ATM withdrawals)

  10. Aceman says:

    I’m in Tokyo at the moment and have been using revolut. Rates have been spot on so far. I’m heading to weirder places soon so was looking forward to trying it there but somehow I’ve lost the card.

    The app is good and lets you freeze the card and if needed disassociate the card with your account.

    I’ve been quite impressed with it, but as said I took it as a quick and easy solution and didn’t want a credit pull that I could use later for other things. Annoyingly I forgot my curve card at home so for the rest of my trip I’m paying 3% fx fees…

  11. GLOBCOIN is another prepaid multicurreny card with very good rate and the easiest way to check it is to use the online exchange calculator found on https://glob-coin.com as well as on other competing cards such as Revolut. Another advantage of GLOBCOIN is that includes a travel insurance because it is a Platinum Mastercard.

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