FNB vs Discovery Credit Card and Forex

I went on holiday last month to Japan and used both my FNB and Discovery cards. In addition to my regular credit cards, I have an FNB Global Account and a Discovery real-time Forex account.

Due to requests for this information via social media and Whatsapp, I am sharing what options you can use when traveling abroad when it comes to forex. Please keep in mind the context, that this is based on my experience and account types.

Carrying forex as cash

I want to state upfront that I avoid carrying cash as much as possible, at home and abroad, so me converting my Rands into Japanese Yen ahead of leaving South Africa was not going to happen.

I also don’t get physical currency in SA for my own reasons; you have to supply proof of everything. I use my maiden name and married name for different things so my docs don’t match (Home Affairs changed my name without my permission). I don’t support services with discriminatory behaviour.

Additionally, I can’t trust the person receiving my data is not going to get hacked and have it appear on the dark web. I don’t even know what they do with the proof they request. Instead, if I do need cash, I withdraw from an ATM abroad. This has helped me on the occasion I urgently needed it.

Credit Card withdrawal fees

One of the perks of my Discovery account is that I don’t get charged withdrawal fees internationally. I’ve used this service in Europe, Asia and Africa to withdraw cash (and not hand over documents). And when I am with a friend, they EFT me to benefit from the lack of fees.

My FNB account type also offers me the same perk, no withdrawal fees abroad, but a good friend of mine had her FNB card swallowed while she was out of the country + had issues swiping it abroad; I’ve just avoided using my FNB card because of the card being swallowed.

The no withdrawal fees, combined with Discovery cards being open for international use by default, i.e., you don’t have to call and let them know in advance that you’re traveling, makes Discovery my preferred method for this.

I used to call FNB all the time ahead of my business trips, and I only did it on my way to the airport, while sitting in an Uber. I had to verify personal info and didn’t feel comfortable in that setting, so I avoid taking those steps. I cannot be sure if this is still a requirement from FNB as I just default to my Discovery card for withdrawals abroad.

Access to forex in Japan 

It was the first time in a while that I traveled to a country where I needed to get my spending transferred into a currency that is not the typical bank supported forex accounts in SA: Euro, US Dollar or GB Pound. These are the currencies you can transact with on the FNB Global Account and Discovery Forex Account.

After transferring a small amount on my Discovery Forex account in US dollars, I soon realised, despite me reading somewhere that other currencies are supported, whenever I tapped my Forex virtual card in Japan, it was not using the US dollars on it. Instead, the transactions were going off on my credit card.

It was frustrating to learn the hard way. Thankfully I had the foresight to transfer a small amount to test how it works, especially with fees, that I just decided to swipe my regular credit cards in Japan. Transferring money between your Discovery accounts is free.

But ultimately, I used my credit card everywhere. I had the cash saved and just transferred it into my cards. I signed up to the local Go Taxi app, like Uber, and used my FNB credit card so I wasn’t paying those additional international fees that Discovery charges.

Discovery vs. FNB credit card fees

Both banks have their own structure with fees. Currency conversion fees are as follows, plus Discovery charges an additional international purchase fee, where FNB does not.

From the above, you can see that having a banking suite on Discovery Bank means your international purchase fees are capped at R100 per transaction for the 2% additional charge. You can also see that credit card only accounts are penalised for the same international purchase fee, which is capped at R500 per transaction. I did not include transactional account fees, please refer to the Discovery website for that.

Top Tip: When you are swiping your credit card abroad, always pay in South African Rands because your local bank will charge you a more favourable currency conversion fee than ones selected by each merchant abroad.

Here’s an example of the above fee structure for different account types. You go to a restaurant and pay R2000 for a meal.

• FNB Premier/Private/PW: R2000 + R50 (2.5% conversion fee)  = R2050
• Discovery Suite Acc: R2000 + R60 (3% conversion fee) + R40 (2% international fee) = R2100
• For amounts that incur a max R500 international fee per transaction on Discovery, it would be for a R25 000 swipe + R750 (3% conversion fee) = R26 250.

Euro, US Dollar and GB Pound Forex Account fees

If you don’t want to use your credit card abroad and want a more fixed way to control your fees, it may work in your interest to get a dedicated forex account for the above mentioned currencies.

Please note in the case with the Japanese Yen and other currencies besides Euro, USD and GBP, there will be exchange fees involved when paying. However, as mentioned above, my USD was not working in Japan on my Discovery Forex account.

The number one benefit of these accounts is to buy currency when the exchange rate is favourable and lock it in ahead of your travels. So you pay exchanges fees at the one point, and thereafter when you are swiping abroad in those currencies, there are no extra fees per swipe. Works best for frequent travellers.

In Summary

• FNB Credit Card is great for only charging a currency conversion fee and no international swiping fees
• Discovery Bank card is great for international cash withdrawals
• FNB’s Global Account gives you DragonPass lounge access around the world
• Discovery’s Forex account lets you buy currency in real-time locking in the best rate
• FNB Global Card will let you tap from £/$/€ to a local currency with a 1.25% conversion fee
• Discovery’s Forex acc can be used by generating a virtual card; you don’t need a physical card

One last tip

My final tip is to always carry two different bank credit cards with you, just in case something happens to one of them, whether it gets swallowed at an ATM, stolen or damaged. And where possible, don’t keep them together. I do this by loading virtual cards on my smart watch or phone and keeping one physical card in my hotel and one with me.