Debit cards cheapest way to get cash abroad: study

The study of the “real costs of foreign currency transactions” for outbound travelers in 12 markets in Asia, Africa and the Middle East by MasterCard found that debit cards had the lowest overall costs among the foreign currency products.

Cash and traveler’s checks incurred high breakage costs, the amounts spent converting unused foreign currency back into local currencies, said the report published in The Business Times. The study estimated direct product costs such as transaction fees charged by card issuers and additional margins built into the exchange rate offer by a card issuer.

Debit costs using personal identification numbers had the lowest average products costs across the markets when used to pay for purchases. For a US$500 transaction, the cost was typically 1.9 percent. Credit cards, traveler’s checks and cash averaged 2.5 to 2.6 percent.

“What we’ve found is that consumers may want to separate their travel budget from other spending,” Robert Walls, head of debit product management for the Asia-Pacific, Middle East and Africa, was quoted as saying.

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