How “Curve” Really Works – From a European who Already Has One…

Curve is in the process of launching in the United States – with some people already invited to apply – and my social media is starting to see more mentions of it. However, there are a few misconceptions that are worth clearing up – as somebody who has used one in the United Kingdom and Europe for a couple of years – even though there is still no harm in signing up for the waiting list.

Curve is a DEBIT card

Curve is not a credit card.  There should be no hard pull on your credit report from one of the major agencies.  Curve is a debit card.

Curve does not provide you with any form of credit. When you pay with your Curve card, Curve checks instanteously with your linked card provider – credit, charge or debit – to see if the transaction is accepted. If that behind-the-scenes transaction is declined, your payment will be too. (unless you are using the Avoid Embarrassment function that checks a back-up card) Curve does not take any risk whatsoever that you can’t pay for your transaction within seconds.

I understand that Curve will initially only work with Mastercard, Diners Club and Discover cards in the United States. Visa and American Express will not work, and British experience suggests that you definitely should not expect Amex to ever become an option…

The “Killer App”

The main reason for having a Curve card – at least in the UK and Europe – might be that it is a debit card, but that you recharge to a credit card.  Therefore, you can use your Curve card at any merchant or service provider that only accepts debit cards – without losing out on the miles, points, cashback, etc. that you could earn on your credit card.

In a similar vein, if your preferred card is a Diners Club or Discover card – but the merchant doesn’t accept those cards – the fact that your Curve card is a Mastercard will allow you to complete the purchase nonetheless (and earn those Diner Club or Discover rewards you want).

HOWEVER, many UK travel hackers took great advantage of the “debit-card-ness” to pay their taxes, add money to brokerage /crypto / savings accounts, etc. and effectively manufacture spend through their Curve card. Curve has long since shut down this loophole and I don’t expect that it will ever be open for US residents – at least for worthwhile levels of MS…

Go Back in Time

From a US perspective, the “Killer App” might just be the Go Back in Time feature.

 

With so many cards in your wallet (or your sock drawer), you might not always use the correct card to take advantage of the highest bonus categories on offer. This is especially true if you have family members who pay less attention to the details than you do…

As “Go Back in Time” suggests, you have 30 days to move the (re)charge from one linked card to another. You can only do this once and it is very simple to do in the App.

So indeed, you can take your physical Curve card with you while shopping – or use it in Apple Pay, Google Pay, etc. – and worry later about which miles / points / cashback card to “Go Back in Time” to.

On your credit card statement, you will see a refund / reversal of the initial payment. So you almost certainly will lose any miles / points / cashback that you earned on the original transaction. In general, the spending category should pass through Curve to the ultimate credit card provider, but errors do sometimes occur.

ATM Fees and No FX Fee

One of the touted benefits of Curve is that you aren’t charged anything to withdraw money from ATMs. This isn’t quite true. Even though Curve will not charge you for using an ATM, the ATM provider WILL. Your underlying credit card provider can also see that you are making a cash advance, meaning that you will probably start paying interest immediately and won’t earn miles/points/cashback. Add the low monthly limit on cash withdrawals – if you find that your credit card provider does NOT consider what you are doing to be a cash advance – and you probably won’t be too keen to use your Curve card at an ATM.

With foreign exchange, Curve does not charge a commission. However, the exchange rate applied is NOT the actual mid-market rate available in the financial markets – it is the exchange rate that Mastercard applies to foreign exchange transactions.  From personal experience, I can tell you that this can be 1+% worse than the market rate I would receive through one of my other fintech Apps such as Wise. You will also receive a worse exchange rate over the weekend.

However, it is probably similar to what you would be getting from another “no FX commission” credit or debit card. It might still be worth using Curve to receive certain credit card benefits on overseas transactions – perhaps a lucrative cashback card that would otherwise charge an FX fee – but it’s not a no-brainer…

 

It is also worth noting that you cannot “Go Back in Time” and change the currency of your transaction. If you buy something in Canadian dollars and re-charge it in US dollars to a US credit card, you cannot then “Go Back in Time” and move the transaction to a card that is denominated in some other currency (Euros, British pounds, Canadian dollars, etc.). You also cannot re-charge the transaction in Canadian dollars onto any other card – you are stuck with the USD conversion rate originally applied.

Bottom line

In the nearly 3 years I’ve held a Curve card, I’ve have passed through a few phases…

  1. Not really knowing what the point of it is
  2. Doing some basic MS with it, but little day-to-day purchasing
  3. Using it for most purchases due to convenience (even after many MS strategies were shut down)
  4. Realizing that I can often get a better deal from a different card

So even though I still carry a Curve card around, there’s no longer really any compelling reason for me to use it.

Have any questions? Let us know in the comments section…

Comments

  1. Rich says

    In the US, Curve is performing a hard credit pull which their site states. Might be worth updating this post to reflect that.

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