Quote:
Originally Posted by Stardrifter_WA
That is the advertised rate and not the rate you actually buy the USD for, as there is a marginal cost for exchange to any currency. It can be as much as 4 cents lower, than the advertised rate. You would only get the true advertised rates if you were exchanging a large amount of currency, probably in the many millions.
And you are indeed correct, it isn't our dollar devaluing but the US rising. It is likely to get stronger too, but long term, our currency is also likely to weaken, if exports fall, particularly if China's expansion slows.
Cheers Peter
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No Peter - that indeed
is the actual buy rate!!!!
I was skeptical when GE Money told me that the xe.com rate was the actual buy rate used on my card.
So I went to an on-line shop in Britain, bought a Trumpers shave soap puck for 10 pounds with the card, took note of the xe.com rate in the subsequent days, and that was what I was charged on my card.
Then I went to Italy for three months, kept loading my card up with Aussie dollars (so that I wouldn't have to pay interest on withdrawals), and going to ATM machines and withdrawing Euros, while keeping tab of xe.com rates. The cash withdrawals were always converted at the xe.com rate.
Same thing with all my payments for hotels and car hire.
But good things don't last. At the start of this year, GE introduced a 3% fee for cash withdrawals from ATMs. I suspect that too many people were doing what I was doing.
But even with that 3% fee attached to the xe.com rates, the result is that GE is better than that of any bank which charges up to that 4 cent differential that you mention (not to mention their international processing fees on top of that). The worst differential I've seen so far is that from the Qantas Cash Mastercard. It's a great card at home for earning Frequent Flyer points, but one would have to be nuts using it overseas.
Don't forget, GE Money is part of GE - which was the world's biggest company before Microsoft overtook it. Its current market capitalisation is as big as that of our four major banks combined. And everywhere one goes around Europe, one sees a GE Money shopfront. I think we are just getting the same sort of good deal their customers get in other countries.
Regards,
Renato