Away for a year, what to do about money?

venerable_bede

Hi,

I have been saving up hard and am looking to travel for a year. I have a good debit card and clarity credit card so thought I was all set. Now, if Brexit actually happens, the pound will go down the drain and I may have to scrap the whole idea.

What would people recommend about handling money with this in mind? I was looking at the Revolut card.

Am I right in thinking that I could load it with GBP now, convert that straight to US and then travel the world with the card converting money from US to the currency of whatever country I am in?

If so, can it just be used like a normal card abroad, to take money out of ATMs and also pay using a machine? I have never used a prepaid card so this is new ground for me. Does this sound right or am I way off and does anyone have a better suggestion?

Many thanks! Kyle

eDicky

venerable_bede wrote: »

I was looking at the Revolut card.

Am I right in thinking that I could load it with GBP now, convert that straight to US and then travel the world with the card converting money from US to the currency of whatever country I am in?

Yes, that's correct.

It can be used anywhere MasterCard is accepted, no fees except 2% on ATM withdrawals in excess of $750 per month.

But consider well the chances of the pound weakening, and the wisdom of keeping a large amount (a year's supply?) of money on a prepaid card.

venerable_bede

Thanks for you're reply eDicky. This does indeed sound like a good idea then? Has anyone had any personal experience of using Resolut whilst travelling through different countries?. Any other comments/suggestions would be greatly appreciated.

I've just seen your edit. So what I intend on doing is putting most of my money for the year on there and converting it all to US dollars before the referendum. Then I will basically be spending dollars abroad. If that makes sense?

Voyager2002

venerable_bede wrote: »

Thanks for you're reply eDicky. This does indeed sound like a good idea then? Has anyone had any personal experience of using Resolut whilst travelling through different countries?. Any other comments/suggestions would be greatly appreciated.

I've just seen your edit. So what I intend on doing is putting most of my money for the year on there and converting it all to US dollars before the referendum. Then I will basically be spending dollars abroad. If that makes sense?

And if the dollar goes down the drain?

What you are planning to do incurs costs (apart from anything else, the loss of interest on a fairly substantial amount of money) and various risks. Can you be sure that your gains from anticipating movements in the currency markets will outweigh those costs?

venerable_bede

I agree, if the dollar goes down then yes there could be some problems, and of course if we vote to remain then I will be losing out. However, losing out by how much? The pound will stabilise and rise a bit sure. However, if we leave, it expected that the pound will go as low as 1:1 with the euro. I will be a massive loser!

The dollar is in no tumoil I don't believe. It might weaken with Trump, but I don't believe I would be a big loser. Plus, I lose nothing by actually using the card as it provides the best transaction rate and I will be sure to stick within its withdrawal limits.

As for interest, it is just simply not much at the moment. How much does a few grand in an ISA get you these days over a couple of months? Not a whole lot.

Choices, choices.....

Voyager2002

venerable_bede wrote: »

I agree, if the dollar goes down then yes there could be some problems, and of course if we vote to remain then I will be losing out. However, losing out by how much? The pound will stabilise and rise a bit sure. However, if we leave, it expected that the pound will go as low as 1:1 with the euro. I will be a massive loser!

The dollar is in no tumoil I don't believe. It might weaken with Trump, but I don't believe I would be a big loser. Plus, I lose nothing by actually using the card as it provides the best transaction rate and I will be sure to stick within its withdrawal limits.

As for interest, it is just simply not much at the moment. How much does a few grand in an ISA get you these days over a couple of months? Not a whole lot.

Choices, choices.....

Well, if you think you know what the currency markets are likely to do and are willing to spend time on it then you could open dollar and Euro accounts with NatWest or Citibank and use on-line banking to transfer funds between them, and then on to your spending card as required.

Or you could keep them in sterling and earn around five per cent by using accounts like TSB and Nationwide Flex Direct, in the hope that over the year the interest earned will compensate for any exchange rate losses.

Voyager2002

Seems it is already too late...
https://www.theguardian.com/business/live/2016/jun/06/pound-slides-referendum-brexit-polls-janet-yellen-speech-live

eDicky

I can't see any particular 'slide' at the moment. Maybe it will happen, maybe not. The current rate already reflects all reasonable expectations.

Revolut is a convenient way to get out of sterling instantly, if you really think you can predict movements, or if it really looks like the Brits are going to fail their big IQ test. But I wouldn't put much faith in what 'chief economists' of currency firms are saying.

I think there's now a limit of £1000 per day Top-up on Revolut. And there is not the same protection as having your money in a bank.