Currency conversion - better to sell in foreign land or buy it in Aus?

[Rono]

Key question here is what rate did they change it for you at and how did it compare to wholesale rate at the time. 'no fees' doesn't mean much if the rate they are offering already incorporates their fee in it already. Just because it's not an explicit fee charged on top doesn't mean there aren't any fees on it

Ghostdunks, you are quite right in what you say, however, the background was a little like this... I flew out of Brisbane to LAX and checked the rate at Brisbane International twice, several times at LAX and then because I had pre - booked most things, I headed straight to Vegas - this was over the weekend, with little movement in the exchange rate. I wasn't looking to exchange money at the casino but when I saw the rate bettered anything else I had seen, I took it. It was a first time observation, and I made a note to "test the logic" of it on the next trip.

regards

Rono

 

[marki]

Hi Rtts

Thanks for your insights into this topic. I will look into Ozforex. I use Amex foreign exchange (attached to platinum card) no fees offered except for 1.5 (roughly from observations) cents per dollar when transacting on the interbank rate.This is how amex make a living from taking a cut on the interbank change fee.

 

[Rono]

Rtts

Thanks for your insights into this topic. I will look into Ozforex. I use Amex foreign exchange no fees except for 1.5 cents per dollar when transacting on the interbank rate.This is how they make a living for.

More information please Marki

 

[Rono]

More information please Marki

Marki, American Express - Australia - Foreign Exchange - Frequently Asked Questions

Section 7 - says the rate is 1% not 1.5cents per dollar ? (minimum charge is $8 - which means minimum is $AUS800 conversion.)

Que?

 

[Ghostdunks]

Ghostdunks, you are quite right in what you say, however, the background was a little like this... I flew out of Brisbane to LAX and checked the rate at Brisbane International twice, several times at LAX and then because I had pre - booked most things, I headed straight to Vegas - this was over the weekend, with little movement in the exchange rate. I wasn't looking to exchange money at the casino but when I saw the rate bettered anything else I had seen, I took it. It was a first time observation, and I made a note to "test the logic" of it on the next trip.

regards

Rono

Please do "test the logic" of it next time, I would be interested to know the results. Have to say though, that I'm not that confident it'll work out much cheaper, as you were comparing the casino rates with the exchange rates offered by airport money changers, which are notorious for having really, really bad exchange rates, to the point where they make banks rates look good. Probably to do with a captive market, where they can charge ridiculous rates and get away with it.

 

[marki]

Thanks Rono

Your research shows it's 1% indeed.

 

[RAM]

Marki, American Express - Australia - Foreign Exchange - Frequently Asked Questions

Section 7 - says the rate is 1% not 1.5cents per dollar ? (minimum charge is $8 - which means minimum is $AUS800 conversion.)

Que?

You can buy whatever amount of foreign cash (or travellers cheques) you like. The minimum fee they charge is $8. So if you only want $50 in JPY say then find out what a booth will charge you - it may work out cheaper (though I suspect they also have a minimum fee) or it may not.

For larger amounts that you want as cash (& no foreign ATM fees) then AMEX works quite well, and you can always take out the middle man by reading your paper for a few minutes before you buy the FX and hope some tourists come in. Works well for Euro, GBP and USD. Post Sept school holidays the Asian beach destinations refunds start flooding in.

 

[Rono]

You can buy whatever amount of foreign cash (or travellers cheques) you like. The minimum fee they charge is $8. So if you only want $50 in JPY say then find out what a booth will charge you - it may work out cheaper (though I suspect they also have a minimum fee) or it may not.

For larger amounts that you want as cash (& no foreign ATM fees) then AMEX works quite well, and you can always take out the middle man by reading your paper for a few minutes before you buy the FX and hope some tourists come in. Works well for Euro, GBP and USD. Post Sept school holidays the Asian beach destinations refunds start flooding in.

Ram, I only put in the $800 as the discussion was about changing money at the lowest possible % handling fee.
If a smaller amount was exchanged then the % fee relative rises and the competitiveness therefore needs to be reconsidered.

Decades ago, when cash was king, larger amounts might have been the go.
Personally, I have never felt comfortable with carrying that much cash.
Besides, since circa 2003, I have been making the majority of my business travel bookings over the internet.
My older brother, also well travelled, used to leave all of the horse trading until he landed, to get the best rates for whatever.
Me, I have found that I get better deals 9 times out of 10 through the internet beforehand.

In fact, probably the only things I need cash for is taxis these days and the occasional B & B - for who prefer cash for obvious reasons.

regards

Rono

 

[RAM]

Ram, I only put in the $800 as the discussion was about changing money at the lowest possible % handling fee.
If a smaller amount was exchanged then the % fee relative rises and the competitiveness therefore needs to be reconsidered.

Decades ago, when cash was king, larger amounts might have been the go.
Personally, I have never felt comfortable with carrying that much cash.
Besides, since circa 2003, I have been making the majority of my business travel bookings over the internet.
My older brother, also well travelled, used to leave all of the horse trading until he landed, to get the best rates for whatever.
Me, I have found that I get better deals 9 times out of 10 through the internet beforehand.

In fact, probably the only things I need cash for is taxis these days and the occasional B & B - for who prefer cash for obvious reasons.

regards

Rono

Understand that Rono, you need to feel comfortable with your solution. Unfortunately just as in OZ certain tourist ATMs get staked out from time to time, so it is overseas - so using your card to get the cash is not as riskless as it is may seem.

With single note 500Euro and large denom GBP and USD - a large value can be carried in just a couple of notes. Depending where you're going in Europe cash is king and cards are not accepted (especially in some ski resorts). What the taxman cannot track make the locals much happier!

 

[Rono]

Understand that Rono, you need to feel comfortable with your solution. Unfortunately just as in OZ certain tourist ATMs get staked out from time to time, so it is overseas - so using your card to get the cash is not as riskless as it is may seem.

With single note 500Euro and large denom GBP and USD - a large value can be carried in just a couple of notes. Depending where you're going in Europe cash is king and cards are not accepted (especially in some ski resorts). What the taxman cannot track make the locals much happier!

Ram, as you said, each to their own. As for credit card fraud, I have had it happen more than once for serious amounts but each time Amex was right on the ball and waived the charges asap. Besides, as I said 90% of my spend is done beforehand, maximizes my FF points, I get travel insurance as well and entree into 600+ airport lounges.

Cheers

 

[foles]

I have used my 28 degrees card o/seas on larger items and pre organised foreign currency at Aust Post prior to departure for transport, food etc

 

[marki]

........... I have always tried to find the time to go to the bank before I leave, as they will likely give you a better deal than the airports, but again it does depend on the country and currency ............card).

Banks are horrible when in comes to FX rates. They do you no favors and would avoid them with a barge pole. Look into 28 degrees CC or Citibank debit card. If large sums are required get yourself known to amex fx or xe.com or forex exchange rates are always better than going to the bank esp. CBA which charge like a wounded bull. See my post earlier in the this thread about an innovative new way to exchange money at the official inter-loan bank rate costing only 1Pound sterling per transaction. http://www.afr.com/Page/Uuid/dd948912-e212-11e2-b118-498d45c5321c

a little more info below on transferwise which I believe is coming to Australia soon:
cheers

How does TransferWise work?

From a consumer point of view, you go on the website and enter: “I’m Rachel. I am sending £1000 from London to Paris.” We ask for basic personal details such as birth date and address, and the recipient’s information. You then key in your debit card number or we give you a local account number so you can transfer funds into that account. When we receive the money we make the transfer. Behind the scenes it works like this: say we have 10 people sending money from London to Paris, then another group of people sending from Paris to London; for these people, we just pay out from the money we receive from the customers in London. So we never transfer money across countries. It’s a crowd-driven model.

 

[marki]

An even cheaper way to go is Interactive Brokers out of Stamford, Connecticut, USA. This place trades just about anything, including currency, that is legal to trade in the world at rock bottom costs such that you hardly notice. Indeed, Interactive is the trader for many small to mid size brokers, but also serves retail clients. Easy to use. The only catch is that there is a maintenance fee which is very small, but makes this option impractical unless transferring moderately significant sums a couple of time a year.

Thanks for the heads up on this one. Have not really looked into it that much before.

 

[uvkelly]

Just an interesting point I just worked out. I have accounts in the US and Australia and use XE.com to transfer money between the two, as I earn my wages in $AUD and live (pay majority of bills) in the USA so needed the best deal for the exchange rates. I thought that only worked for people in my situation. However I have just found (a quick research on the site) you can have a bank draft (cashable at any bank in the country for the currency involved) sent to you where-ever you are, the draft is able to be cancelled if you loose it prior to cashing it as well. The best thing is there are no fees, no minimums and I normally pay about 1.3% over of the spot rate.
The biggest issue using this method is opening the account which takes some serious work, so probably not practical for a one of trip, but works well for large amounts or regular travel.
If anyone knows of a cheaper way for large regular transfers, please let me know as with the current rates I have taken a roughly 10% hit on my wages

 

[markis10]

Just an interesting point I just worked out. I have accounts in the US and Australia and use XE.com to transfer money between the two, as I earn my wages in $AUD and live (pay majority of bills) in the USA so needed the best deal for the exchange rates. I thought that only worked for people in my situation. However I have just found (a quick research on the site) you can have a bank draft (cashable at any bank in the country for the currency involved) sent to you where-ever you are, the draft is able to be cancelled if you loose it prior to cashing it as well. The best thing is there are no fees, no minimums and I normally pay about 1.3% over of the spot rate.
The biggest issue using this method is opening the account which takes some serious work, so probably not practical for a one of trip, but works well for large amounts or regular travel.
If anyone knows of a cheaper way for large regular transfers, please let me know as with the current rates I have taken a roughly 10% hit on my wages

You should be using a Citibank Visa Debit Plus account, if you can pass the ID check posing as a local resident re address, rates are very close to XE and no charges for cash withdraws at many ATMs worldwide.

 

[uvkelly]

I don't have a problem with residency, funny quirk in the laws means I am legally required to have a drivers licence/passport for each country and both claim I am a resident. Thank goodness for the tax treaty between the two. Citibank are interesting in this situation (I can have a $AU account in the US etc etc) and I have a black card with Citi in the USA but a good friend who has accounts spread between Europe and the USA with Citi was not allowed to withdraw funds (despite what his personal US personal banker said prior) at the Sydney branch of Citibank (card advance OK but treated as a separate bank, no client rates etc.(he's no longer a client of Citi).
Still I do like Citi (roughly 2% mortgage fixed for 30 years anyone?) and ATM access is easy with accounts in both countries. I use BPay to transfer funds from the Commonwealth through XE to my Chase accounts so it is easy once the account is set up.

 

[ChasingDaylight]

You should be using a Citibank Visa Debit Plus account, if you can pass the ID check posing as a local resident re address, rates are very close to XE and no charges for cash withdraws at many ATMs worldwide.

Forgive any ignorance, but is the Citibank VDP better/more effective/(insert here) than a 28D Card put into credit and withdrawing off that?

 

[markis10]

Forgive any ignorance, but is the Citibank VDP better/more effective/(insert here) than a 28D Card put into credit and withdrawing off that?

It is when the 3% charge comes into play Jan1

 

[ChasingDaylight]

Thanks Markis10, I wasn't aware of that. Will look into getting a VDP in January.