Payment in a foreign currency, like the Swiss franc, is often pretty expensive. Many banks, including Paypal, charge a fee for transactions in foreign currencies. On top of that they use an expensive exchange rate, not the real exchange rate of the day.
You may not even notice this inflated exchange rate. Only if you take a close look into your transactions, you will see how much money you lost in the process.
As we are a travel website, we deal with this issue quite a lot. That's why we started working with Wise.com two years ago. Wise.com is an online bank that uses the real exchange rate and low transaction fees. You'll still pay them for their service, but a lot less than most regular banks.
An example: say that your home currency is USD. You spend CHF 5000 either online before your trip to Switzerland, or while there.
- According to today's exchange rate, CHF 5000 = USD 5,415.89.
- If you would pay through Paypal, for example, they would convert CHF 5000 to USD 5,602.77. In other words, you would pay USD 186.88 (5,602.77 - 5,415.89) extra on banking fees.
- If you would pay through Wise.com, they would convert CHF 5000 to USD 5,437.51. You would only pay USD 21.62 (5,437.51 - 5,415.89) on banking fees.
That's a USD 165.26 saving! Simply by paying through another bank.
I'd recommend to give Wise.com a try. It's free to signup. There are no recurring fees. You will then be able to transfer any amount in USD from your own bank to Wise.
For USD 9, you can get a Wise credit+debit card. Again, no monthly fees. The card allows you to pay online, in-store and you can also withdraw cash with it. We haven't had an issue with our card so far, so we cancelled our "regular" credit card.
To save more money, use this link to signup with them: wise.com/invite/u/arnop3. You'll reach a page that says "Arnoldus (that's me) has given you a fee-free transfer of up to 500 EUR". Because of this link, your first payment in a foreign currency will be free. This works up to EUR 500 or the equivalent in your currency. If you spend more, the additional amount will be charged with their normal (low) fee.
So, you save most by using this perk for a bigger payment, like a Swiss Travel Pass or hotel booking. It's a good opportunity to try Wise. You can now pay in Swiss francs (CHF) and pay no or very little banking fees! Of course this is just an example. It works for any foreign purchase.
One more thing: in-store payment terminals and online shops often offer you to make a payment in your home currency, e.g. USD. It may seem like you avoid a foreign currency transaction fee, but that's not true. The amount in USD will mostly be very high, because a conversion will be done in the background by the bank of the seller. So this is again a pretty expensive way to pay, and one we always avoid.
Signup with Wise to try for free: wise.com/invite/u/arnop3