Benefits of shopping on foreign websites with a US dollar debit card

Posted by Felix Okoli on Monday May 9, 2016 at 12:6:50:

One of the ways I prefer making payments when shopping on foreign websites that are US dollar based is by making use of a US dollar debit card.

A US dollar debit card is a card that is linked to a US dollar account that one has opened and kept with the bank and in my case, it has to do with a domiciliary account that I've opened with my bank. I initially opened the account because I wanted to be able to receive payments in foreign currencies and also to save money in foreign currency rather than just in Naira. It has really come in handy as I also applied for a US dollar Mastercard that I now use to make payments on US dollar based websites like Amazon and Aliexpress.

Sure, you can also make payments with a Naira card on foreign websites but there are some benefits of making payments on those sites using a US dollar debit card.

Benefits:
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1. No fluctuating exchange rates: Since you are making payments on a US dollar based shopping website with a US dollar card, there is no need for a currency exchange from Naira to US dollar since your card is already in dollars and you'd only be debited with the dollar equivalent. If it was a Naira card, the exchange rate will be fluctuating and based on my experience, it has mostly been in favour of the US dollar since Nigeria imports more than she exports.

2. A good store of value: When you save your funds in US dollars, It's value is more likely going to be stable in the long term than when you store it in Naira. Take an example of a scenario where you saved money in Naira when 200 Naira could buy an item worth $1 from a foreign website. During a time when the Naira loses value in the short term, it may not be able to buy that same $1 item for N200 as it may have to be exchanged for N400 or more. Based on my experience, the US dollar is more stable in the long term than the Naira and it's more likely going to make you richer.

3. No need to repay credit: Since it's a debit card, you are only spending from your available balance and not from any credit/loan from the bank like credit cards offer. A credit card would offer you money in advance and with interest too but a debit card is linked to funds you have actually own in your account and you don't have to repay it or pay any interest as a result of delayed repayment.

4. You get imported items at a cheaper price: When you shop on foreign websites from Nigeria, you are more likely to buy the item at a lower price that what it's sold in the market unlike if you were to buy the same imported item from the market with your Naira. By shopping on foreign websites, you get to be able to buy imported items at the source rather than from local retailers and that saves you some money.

How to get a US dollar debit card:
It's easy. Just visit your bank and ask them how to do so. Some require you to just bring the funds and deposit them to your account while others require you to officially open a domiciliary account before applying for a card.