Currency choice when booking

[Hvr]

With a surfeit of leave I decided to book a quick trip to BKK in June.

Due to various other trips I only needed to purchase the BKK-MEL journey on Jet* in their business class.

When it came time to pay I was offered the default choice of paying AUD$1255.33 or THB30249.

The conversion rate offered for the AUD$ fare was .041. Since I was using a CommBank credit card I looked on their site at how much I would receive if I converted THB30249 to AUD$. They would give me $1071.

Definitely something to be aware of when booking Jet*.

 

[Ghostdunks]

Just to clarify, when you said for the Commbank credit card, you looked at their site to see how much you would receive if converting THB to AUD, what link/section of website did you use? As far as I know, there's no facility on Commbank website to do such a thing.

I think you're mistaken in how credit cards convert purchases in foreign currency. The exchange rate you receive has nothing to do with the bank itself(could be Commbank, NAB, ANZ, etc..). The exchange rate you'll get is dependent on whether the card is of type Visa/Mastercard/Amex/etc and will use that particular credit card type's exchange rate(eg. Visa will get their own exchange rate, Mastercard will get their own exchange rate, etc...). Then, after the exchange rate is determined by the card network, the card issuer itself(in this case, Commbank), will add on their own "foreign currency" surcharge, usually a number between 3-5% on top. Some card issuers(28 Degrees, Bankwest Platinum, to name a couple) DO NOT add such a surcharge on, and this is what makes those cards particularly attractive for making foreign purchases on, as they get the raw exchange rate that Visa/Mastercard get, which is very close to wholesale exchange rates usually.

The exchange rate you'll see on bank websites is what they charge for converting cash/travellers cheques and is typically not very good compared to the wholesale exchange rate. Again, not used for credit card purchases, or even cash withdrawals from ATMS overseas.

I'm still interested in how you got your numbers because I tried to replicate, and couldn't. Currently, on xe.com, 1 AUD=25.29 THB, or conversely 1THB=0.0395AUD. Not sure where you got 0.41 from, are you sure it wasn't 0.041?

 

[Hvr]

Whoops you're right, 0.041, couldn't read the tiny print on the screen dump. Will amend original post.

I used the CommBank site which provides the option to get a price to sell foreign currency to the bank.

 

[exceladdict]

Whoops you're right, 0.041, couldn't read the tiny print on the screen dump. Will amend original post.

I used the CommBank site which provides the option to get a price to sell foreign currency to the bank.

If this is the same as one in the bottom left of their homepage, I think that is their cash sell rate you would get swapping at the bank or converting to foreign currency on one of their travel prepaid cards. Commonwealth typically has a huge spread (ie they hide a large commission in that exchange rate).

 

[exceladdict]

Since I was using a CommBank credit card I looked on their site at how much I would receive if I converted THB30249 to AUD$. They would give me $1071.

Ah, also on the spread, how many THB would they give you for 1071AUD? I would guess far less than 30249.

As you're technically buying THB that's the direction you'd need to convert in too.

 

[Ghostdunks]

I used the CommBank site which provides the option to get a price to sell foreign currency to the bank.

Ah, also on the spread, how many THB would they give you for 1071AUD? I would guess far less than 30249.

As you're technically buying THB that's the direction you'd need to convert in too.

Ya, I think Hvr used the wrong rate direction as well. Will need THB to pay for the fare, so instead of selling foreign currency, actually need to BUY foreign currency. For 1107 AUD, according to that calculator, will get 25254.07 THB, which is quite bad, in my opinion. Either way, that's the wrong rate to look at anyway if trying to figure out how much it'll end up costing on the credit card, as that's for cash foreign exchange at the bank.

On topic, what Jetstar is offering here is their equivalent of DCC, charging the user a premium of about 5% to convert to "easily understood currency for your convenience" AUD The best option here would be to pay Jetstar the THB30249 on 28Degrees card(or something similar), which should convert to something like AUD$1195.

 

[moa999]

Correct... These 'convenience' options to pay in your local currency are almost never good deals

 

[Hvr]

As others have mentioned looks like I did the conversion incorrectly.

The charge is now pending on my credit card with a converted rate of AUD$1205.49 so even with the foreign currency fee added it will still be cheaper than the original AUD$ option.

 

[trippin_the_rift]

Its always better to use local currency to buy. Same when you're presented with a receipt in Thailand to pay in thb or aud. Always go for the local amount