Like Having Liquid Gold
In Your Wallet ~ by Sean Brodrick
The Sovereign Society
large amounts of cash used to mean you’d either have to sweat it out with
a big bankroll in your pocket or get writer’s cramp signing a bucketload
of travelers’ cheques. But not any more.
are great ways to travel with cash stored in a credit card-sized piece
of plastic that is NOT a credit card (though it looks like one). These
currency/debit cards give you the confidence of cash, the ease of a credit
card and all the privacy in the world.
Cash: Preloaded and Ready to Go!
A Swiss Travel
Cash card looks like a credit card, but has no name on it, just a numerical
code. The user also gets a PIN code. The user calls his or her banker,
who loads the card with a maximum 10,000 euros, U.S. dollars or Swiss francs.
It can then be used to withdraw cash all over the world. Even better, there
are no monthly limits of withdrawal, although a limit per withdrawal may
apply. And you can reload the card when you run out of cash.
Now, it’s not
free. When you purchase the card and load it for the first time, you pay
a commission of 1%, not unlike an insurance premium in the event of loss
or theft. Charges for each withdrawal are three euros or three U.S. dollars
(depending on the type of currency loaded in the card) worldwide, though
local ATMs may add on their own charges. And when you reload it, you pay
a commission of 1% on the reloading amount.
• If you lose
the card or it’s stolen, the card is replaced and your current balance
is credited to your new card—worldwide and at no charge. And anyone who
finds the card won’t be able to use it without knowing the PIN.
• If you have
gold in a Swiss bank account, it can be sold for cash to come up with the
Swiss Travel Cash in a matter of hours.
• You can
use the card at more than 900,000 ATMs in more than 120 countries around
• Your privacy
is protected—purchases aren’t made in the card user’s name.
For more on
this card, point your web browser to https://www.travelcash.ch/.
Swiss Travel Cash can also be taken out through an independent asset manager
like Robert Vrijhof of Weber, Hartmann, Vrijhof & Partners. He can
be reached at: firstname.lastname@example.org.
Sovereign Society, headquartered in Waterford, Ireland, was founded in
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Society's highly qualified contacts recommend only carefully chosen banks
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Offers a Bank Account Alternative
to Swiss Travel Cash—one that doesn’t involve Swiss banks or asset managers—is
ExactPay, an electronic debit card that provides instant access to global
cash at 800,000 ATMs in 120 countries, as well as 12 million merchant locations
around the globe. Unlike Swiss Travel Cash, which is pre-loaded, ExactPay
draws on a bank account. All transactions are settled by direct debit to
the customer’s special purpose ExactPay account at First Curaçao
International Bank in the Netherlands Antilles. However, purchases are
still anonymous—if you so choose, your identity is known only to the bank,
and your name doesn’t need to be printed on the card (unless you want it
there). For individuals concerned with privacy, this is a plus.
letting you shop ‘til you drop, ExactPay offers electronic funds transfer
and payment transactions processing services. This lets you execute private
and secure online electronic payments in any currency to anybody, anywhere
in the world by bank guaranteed electronic check.
you spend your ExactPay in a currency other than the currency in the bank
account it draws on, there is an exchange fee. (The same goes for Swiss
Travel Cash if you make a purchase in a currency other than the one the
card is loaded in.) ExactPay is available in euros, U.S. dollars and British
have fees, but they’re set fees, rather than the percentage system used
by Swiss Travel Cash. ExactPay charges $495 to create the debit card, $25
for each additional card, $30 a month for the primary signatory, $75 to
replace a lost or stolen card, and so on. For a complete list of ExactPay
fees, point your web browser to https://www.exactpay.com/main.asp?DBCode=&Frame=Info.
Then, click on the link ‘Information,’ click on ‘Fees and Charges,’ choose
the card program and card currency to see the associated card fees.
Express: A Third Way
is a third alternative—American Express has unveiled its Travelers Cheque
Card, a prepaid, reloadable card. It can be used at ATMs, stores, hotels—anyplace
in the world that accepts American Express cards.
Express Cheque Card has more limitations (in our view) than the other two
mentioned here. There’s a maximum load of $2,750 for any 14-day period.
And while you can order up to four cards at a time, their combined value
can’t exceed $2,750. Still, the card can be loaded with dollars, euros
or pounds, and the issuance fee per card is just $14.95. If this fits your
budget and spending limits—and you aren’t concerned with privacy—you might
want to consider it.
Just keep in
mind that all three cards will charge an exchange fee if you spend them
in currencies other than the one they’re loaded with (or in ExactPay’s
case, the currency of the bank account). For the latest on rising credit
card fees, see the table on page 10.
The cost of
paying with plastic abroad is rising.
In April, VISA
replaced its 1% fee for changing foreign currencies into U.S. dollars with
a 1%“transaction fee” that applies to ALL purchases in another country,
no matter if the sale was made in a local currency or U.S. dollars. Customers
howled, forcing VISA to suspend the new fee pending a “review of the structure.”
It’s a rare victory for consumers as credit cards jack up fees.
doesn’t charge a fee if foreign purchases are made in U.S. dollars—but
that changes on October 1. Other banks charge more—up to 3%—for transactions
made in foreign currencies.
charges may come on top of merchant fees for converting credit card purchases.
is forearmed. Here’s a list of major banks and credit card companies, and
what they currently charge for foreign currency transaction fees. But remember,
they could change at any time. Credit card issuer Foreign currency Fee
applies when transaction fee foreign purchase made in U.S. dollars
Bank of America
Citi Card 3%
HSBC 1% Yes
Chase 3% No
MBNA 3% Yes
surcharges on credit card transactions, some banks now charge hidden fees
of several percentage points on foreign currency ATM transactions. Best
solution: If you travel overseas, be sure to ask what the foreign currency
transaction fees and ATM surcharges are before you sign.
years the U.S. IRS has closely scrutinized the use of offshore credit and
debit cards that they allege are used by some for tax evasion. Persons
who have done so have been prosecuted after the IRS successfully subpoenaed
thousands of offshore card sales records from VISA, AmEx and MasterCard.
Here are the
rules that apply to any offshore bank or other financial account held by
a U.S. person, including cash or other ATM cards issued under those accounts.
• In the United
States, bank or other financial institution cash transfers of $10,000 or
more automatically are reported electronically to the government.
• Any cash
or other negotiable securities valued at $10,000 or more carried by any
person leaving or entering the U.S. must be reported at the time on forms
issued by the U.S. Department of Homeland Security, Customs Bureau forms.
• You must
report the existence of an offshore financial account over which you have
direct or indirect control, even if it is in the name of a legal entity
you control. The law says: “Each United States person who has a financial
interest in, or signature authority over bank, securities, or other financial
accounts in a foreign country which exceeds $10,000 in aggregate value,
must report the relationship each calendar year by filing Treasury Department
Form 90-22.1 before June 30 of the succeeding year.”
• If you’re
a U.S. citizen or permanent resident alien and hold $10,000 or more in
one or more foreign financial accounts, you must report the existence of
these accounts each year on your federal income tax return, IRS Form 1040
(Schedule B). You must also file a separate information return (Form TD
F 90-22.1) with the U.S. Treasury by June 30 each year.
may result in criminal prosecution.
is editor of TSI and has 25 years experience as a financial analyst and
journalist. Most recently, he has served as editorial director for Weiss
Research—an independent financial rating firm and publisher of investment
publications. Sean backs up every article he writes with in-depth fundamental
research and expert technical analysis. You may contact Sean at email@example.com.