Using credit card overseas, worth the point ?

[UP4014]

I'd be curious to know why so many prefer cash when in my experience cash typically has abysmal exchange rates!

I guess depends on where and who you exchange with. I do a little homework beforehand, and carry a bunch of it.

 

[burmans]

I guess depends on where and who you exchange with. I do a little homework beforehand, and carry a bunch of it.

Yes, I know that various companies have different forex rates but even the "good" ones are hardly great. The best I've found charge in the order of greater than 3% over the midrate which is similar to the "fee" you pay on a CC/debit card (excluding the 28 degrees/CitiPlus).

And the worst charge 7% plus.

 

[UP4014]

Yes, I know that various companies have different forex rates but even the "good" ones are hardly great. The best I've found charge in the order of greater than 3% over the midrate which is similar to the "fee" you pay on a CC/debit card (excluding the 28 degrees/CitiPlus).

And the worst charge 7% plus.

Last time I changed some USD in Sydney I'm sure they did it for a flat fee which wasn't that much. I used the forex tellers up the back in Westpac George St.

 

[trippin_the_rift]

Yes, I know that various companies have different forex rates but even the "good" ones are hardly great. The best I've found charge in the order of greater than 3% over the midrate which is similar to the "fee" you pay on a CC/debit card (excluding the 28 degrees/CitiPlus).

And the worst charge 7% plus.

Totally agree with you. No idea why anyone would change cash anywhere without Citi/28 degrees.

However, the times I've been stuck with currency which I want to convert I've asked for the airline crew rate which is significantly better. Most places don't ask for credentials, especially at exchanges that have deals with the crew. However, if you don't look like crew I doubt this will work.

 

[Cruiser Elite]

OP stated he or she is off to China - changing A$ in China safe and secure - change at International hotel chains and you will get the daily rate set by Bank of China - they cannot and will not skin you. Having said that many now have daily $ limit that you can exhange - if you want to exceed this dimly take your passport to any of the local banks and again you will get daily rate - none of this 3%, 4% or 5% fee to exchange.

 

[burmans]

Last time I changed some USD in Sydney I'm sure they did it for a flat fee which wasn't that much. I used the forex tellers up the back in Westpac George St.

Suggest you have a look at Compare Travel Money AUD Currency Rates - BestExchangeRates and look at the right hand column on costs

Westpac may not be charging you a "fee" but using Westpac is costing you over 5% over something like the 28 degrees/Citibank Plus which give you close to the XE midrate. That's the way they suck the punters in, no/low fee is what is advertised but they are getting you on the Exchange rate.

Something like banks with no fee accounts and interest at .0001%, they are always getting their money somehow.

 

[nickfromeastryde]

It is never worth is from a rewards point of view. My Amex earns 2 points per $1 spent overseas. At 3% that means it costs $15 per 1000 points. Or 15 cents per point! That is massive. 'Buying' points I never like to pay over about 0.5c per point from credit card sign ups and the like. This is based off a Qantas 280k award which would mean it would cost $1400 to buy those points.

I do what many do on here. Run with a 28 degrees card which sits in a draw in Australia or is used for online OS purchases. And a Citibank Visa Debit which also sits in the drawer in Australia.

that would be 1.5c per point but I suppose still a little expensive. Still, your getting free use of those funds for a month or more which is also worth something.

The Citi Debit Card suits me. You get the headline rate or close enough to it which beats buying a travel card or cash bought before you leave and there's no fees if you pick your atm carefully

 

[nickfromeastryde]

Last time I changed some USD in Sydney I'm sure they did it for a flat fee which wasn't that much. I used the forex tellers up the back in Westpac George St.

I'd be walking down to Haymarket. Lots of options down there at least 3% better than any Bank

 

[Mqrko]

that would be 1.5c per point but I suppose still a little expensive. Still, your getting free use of those funds for a month or more which is also worth something.

The Citi Debit Card suits me. You get the headline rate or close enough to it which beats buying a travel card or cash bought before you leave and there's no fees if you pick your atm carefully

But the points you'll earn while spending the money should offset the 3% fees.

If we keep 2 points / $:
If you spend $500, you get 1000 points. 3% fees will give you $15.
But if you value the cost of a point at 0.5c, you'll get $25.75 of points (I include the cost of the fee).
So in the end, you earn $15.75

Is it the correct way of thinking or I'm totally wrong ?

 

[karen blancfield]

I can't tell you how many people I've convinced to get 28 Degrees card. It should be the first thing a new traveller gets even before their airfare! But some people still resist!

 

[awkwardpaws]

As per a few posts, I'm a big fan of the 28Degrees/CitiPlus combo.

- In store purchases - 28Degrees
- ATM/Cash needs - CitiPlus

Have been considering the BankWest option but the annual fee is stopping me from applying for it

 

[thehound]

As per a few posts, I'm a big fan of the 28Degrees/CitiPlus combo.

- In store purchases - 28Degrees
- ATM/Cash needs - CitiPlus

Have been considering the BankWest option but the annual fee is stopping me from applying for it

What's the rationale behind splitting up instore and ATM purchases between those two cards? I've got a Citi Plus card which I would use for both - what benefit does the 28 Degrees confer in a store setting?

 

[thehound]

Figuring out what value you can reap from a points earning card is key. I've been living in Canada for some months now and have used my Citi Prestige extensively. They recently changed the forex fees from 3.3% to 3.4%, but the points earned on overseas transactions still reaps 3.33 KF miles per $ (soon to be devalued to 2.5KF miles/$). So at the current earn rate (and 3.3% fee) I was effectively getting 1 KF mile for 1 cent - which I think is definitely worth it.

Citi are going backwards though and I'm going to start using my BankWest Qantas Platinum more to completely avoid fees - but with that I'll only be getting 0.75 QFF points per $.

When I go overseas I often take no foreign cash at all, and just withdraw some on my CitiPlus card at an airport ATM. Having kept a tab on those transactions over some years I know I always get a better exchange rate than if I'd bought foreign cash whilst at home or via a forex counter overseas.

 

[awkwardpaws]

What's the rationale behind splitting up instore and ATM purchases between those two cards? I've got a Citi Plus card which I would use for both - what benefit does the 28 Degrees confer in a store setting?

It is mainly because for CitiPlus you will need funds in your account, and 28Degrees is credit card (which now you cannot use for ATMs without fees). I just prefer it because 28Degrees, I dont need to have funds in that account, just need available credit

 

[coco50]

Gee that's got to be a lot more expensive and less secure wouldn't it?

Not if you don't use much cash>

 

[avante]

Figuring out what value you can reap from a points earning card is key. I've been living in Canada for some months now and have used my Citi Prestige extensively. They recently changed the forex fees from 3.3% to 3.4%, but the points earned on overseas transactions still reaps 3.33 KF miles per $ (soon to be devalued to 2.5KF miles/$). So at the current earn rate (and 3.3% fee) I was effectively getting 1 KF mile for 1 cent - which I think is definitely worth it.

Agreed. Amex Platinum earns you 2 points per dollar for international transactions. Assuming you have a mortgage at 4% and you get to keep your cash in your offset for 2 weeks (on average) more, the cost per Amex point is 1.4c. Business return tickets from MEL - LHR is 161,500 points and $900 in taxes and charges with SQ. Business Saver fares are AUD 7,800 return so that makes a point worth 4.2c. Now that 3% fee doesn't seem so bad, as long as you're not using the points for a new toaster.

 

[burmans]

But the points you'll earn while spending the money should offset the 3% fees.

If we keep 2 points / $:
If you spend $500, you get 1000 points. 3% fees will give you $15.
But if you value the cost of a point at 0.5c, you'll get $25.75 of points (I include the cost of the fee).
So in the end, you earn $15.75

Is it the correct way of thinking or I'm totally wrong ?

In your situation I'm sort of with you. Like many others I'm a fan of the 28 degrees/Citiplus card but it seems a little ridiculous for us to keep harping on about it when it's clear you don't have time to get these.

The options you seem to have in your situation are
- change cash here and cop a large conversion fee - not a great option IMO and downside for safety
- change overseas - probably better but you are still up for a probably 2% margin on your exchange rate - similar downsides for safety
- withdraw via ATM but cop a 3% fee
- use CC, cop the 3% fee but with benefits (i.e. rewards, less chance of loss than cash, ability to dispute/chargeback etc)

Yes, I agree this is a bad bunch but the OP is stuck with that given his timing, I'm really not going to keep telling him to do something that's just not viable. Of the 4 I would indeed probably choose the CC with some cash given not everyone takes CC. Of course I have a Citi card with a decent earn overseas (well for next 6 weeks or so) which helps ease the pain somewhat!

 

[get me outta here]

Bankwest World M/C pays points and has no forex fees AFAIK. 1 point per $1

 

[thehound]

Bankwest World M/C pays points and has no forex fees AFAIK.

Correct, it pays 1 QFF point per $ with no forex fee. Only problem is it's invitation only, but I believe some have had success requesting an upgrade from their BW Plat card.

 

[sausagefingers]

Bankwest World M/C pays points and has no forex fees AFAIK.

I think the Bankwest Platinum card pays .75 QFF points per dollar with no forex fees too.