As I promised earlier, I am now going to talk about issuing a debit card with an offshore bank. I have investigated this matter and learned a few things about what such card is good for, what issues you could face requesting a bank card offshore.
Having a bank card (Visa/Mastercard) is helpful. You can have access to your funds whereever you are. Debit cards available for the bank I’m working with could be funded in any of four following currencies: GBP, EUR, USD or AUD. This is not bad, but I would prefer having more choice. Adding CHF, CAD, SGD and other good currencies would be helpful.
Basically, EUR and USD is widely available in Russia and many other countries. GBP is not a very sound currency. And transacting in AUD is not particularly popular thing if you’re not Australian.
So I prefer to have multi-currency account, yet a USD bank card. FX conversion fee is a problem with other exotic currencies, because it is not very likely you’re going to transact in these currencies.
Bank card is associated with a separate card account, and you explicitly fund this account from your main accounts. You don’t want your large savings account to be affected by some card fraud, so they don’t connect your card to such accounts directly.
Being a resident of Russia doesn’t come without a bill. The bank particularly asked me to affirm that I am not going to put the card in any Russian ATM machine. Do whatever you want including purchases on the Internet, just never put in a Russian ATM machine 🙂
They also consider Russia is a ‘high risk’ location, so they charge extra $100 for a card.
Fees are not small. Since the bank doesn’t make money loaning your funds left and right, do not engage themselves in leveraged speculation schemes, they make it on fees charging you for your transactions. So, it is very likely that purchasing groceries with such a card can cost you, especially if you’re charged in different currency, so they add FX fee to the mix.
The same applies to cash withdrawal using ATM machines. Since the bank doesn’t have any ATM machines in your neighbourhood, local bank will charge your bank for cash withdrawals.
Fees could be different in different countries. In my case, transacting in UK would be cheaper, because card processing is located in UK and operated by some Brittish bank.
Here are fees that the bank in question charges:
Delivering the card is not a cheap excercise either. $150 USD + courier costs are on you.
The bottom line
It doesn’t worth it having such a card and doing daily purchases in local rubbles-only grocery store. Also the bank doesn’t give you any bonuses, any miles, any free stuff for being a client or a cardholder. They just don’t have means to pay for these things, again, they don’t loan any of your money.
However, if you make a purchase in a right currency, you pay something like $1 USD per transaction that is not a lot.