Falling Aussie dollar

[David Niven (David Niven)]

Things has become a lot more ecpensive for our hobby!
At the rate the Aussie is depreciating, the ES 82D will soon cost more than $200.
Not to mention going overseas for holidays.

[RickS (Rick)]

Mixed feelings from me. I work for a company that exports but I like to buy gear from the US and Europe. Swings and roundabouts... We've had it good for a long time wrt astro purchases.

[Stardrifter_WA]

Originally Posted by David Niven

Things has become a lot more ecpensive for our hobby!
At the rate the Aussie is depreciating, the ES 82D will soon cost more than $200.
Not to mention going overseas for holidays.

I saw this coming and bought a stack of US dollars when I travelled last May, from which I have a heap left over. I exchanged at a rate 96 cents. Yes, it was a gamble, but it is one that seems to have paid off. I just bought two Quarks last week (Chromosphere and Prominence), along with other accessories.

I just wish I had bought double last year, as I got an exchange rate above parity. But as Rick says...swings and roundabouts.

Cheers Peter

[OzStarGazer]

I bought a Bahtinov mask from overseas the other day and the exchange was outrageous...

[Renato1 (Renato)]

Not so much a falling Aussie dollar as a rising US dollar. The AUD rate is pretty much the same against the Pound and the Euro where I go on holidays. In fact, the Euro is worse against the AUD than for most of the three months I was over there just over a year ago.

Also, the exchange rate today is US86c to the AUD, see
http://www.xe.com/

If you want to get that exchange rate on foreign transactions, and not pay any international transaction fees, you have to get a GE Money 28 Degree Mastercard (and it has no annual fee either).

Use of any other Australian credit or debit card, or of PayPal results in atrocious exchange rates and hefty fees with the credit cards. But at least with PayPal I don't mind as much, as one is effectively paying for insurance in case things don't turn up, which I've made use of several times.
Regards,
Renato

[Stardrifter_WA]

Originally Posted by Renato1

Also, the exchange rate today is US86c to the AUD, see
http://www.xe.com/

Regards,
Renato

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

[Renato1 (Renato)]

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

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

[jenchris (Jennifer)]

I have a uk pension that feeds into a uk bank so I don't feel the effects of exchange..
I do think it's a bit rich though.
It's a form of extortion.

[Stardrifter_WA]

Originally Posted by Renato1

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

Yes Renato, I can see how you think that. You need to be careful that you don't perpetuate a myth here.

Using a credit card you do get that rate, however, if you have a closer look you will also find a International Transaction Fee.

However, when you actually buy cash from a money exchange, or a bank, you buy at a lower rate, to cover their fee. Although, some exchanges also charge a set fee, so you need to watch that.

Make no mistake Renato, you don't get the exact amount, as there is a cost for that exchange, whether through a separate fee (International transaction fee) or a percentage of the rate. But you do pay to exchange money.

Try ring your bank and ask that if you want to buy US dollars, what rate will I buY it at. Or, check Forex, as they state that is not the rate you buy at.

However, in the event that you have found a way to bUy a US dollar for the 86 cents mentioned, without any fees, then please let me know, for I will be there in an instant.

I loaded a US credit card with US dollars, but when I bought those dollars the exchange rate was around 98, but doing a simple division between what it cost and what I actually got, the exchange rate received was closer to 95 cents. however, I might add, by having a credit card in US dollars, I don't pay that International Transaction Fee, because I get around that by having a US credit card.

Cheers Peter

[Stardrifter_WA]

Originally Posted by jenchris

I have a uk pension that feeds into a uk bank so I don't feel the effects of exchange..
I do think it's a bit rich though.
It's a form of extortion.

Not extortion Chris. Macro and Micro economics are complicated, and some of the concepts are difficult to grasp (I struggle to understand them a great deal) so to put it simply it is supply and demand, dictated by where the markets are putting money. Well, that is what I think it is.

I am not saying I am an expert either, as I am desperately trying to understand what is going on in the world, but I think it is beyond my capability. I want to try and make informed decisions, but I think what I actually need is a crystal ball, that works!.

[killswitch (Edison)]

Originally Posted by Stardrifter_WA

Using a credit card you do get that rate, however, if you have a closer look you will also find a International Transaction Fee.

However, when you actually buy cash from a money exchange, or a bank, you buy at a lower rate, to cover their fee. Although, some exchanges also charge a set fee, so you need to watch that.

Make no mistake Renato, you don't get the exact amount, as there is a cost for that exchange, whether through a separate fee (International transaction fee) or a percentage of the rate. But you do pay to exchange money.

Some credit cards like the 28degrees International card (GE) have no international transaction fees, currency conversion fees and annual fees. It also didnt have cash withdrawal fees until this year (people kept loading it up with money and withdrawing it overseas).

It uses the Mastercard rates which is pretty good. Current rate:
Mastercard - 0.85650
XE.com - 0.86332

I maxed out my card when the dollar hit around $1.10.

[Stardrifter_WA]

Originally Posted by killswitch

Some credit cards like the 28degrees International card (GE) have no international transaction fees, currency conversion fees and annual fees. It also didnt have cash withdrawal fees until this year (people kept loading it up with money and withdrawing it overseas).

It uses the Mastercard rates which is pretty good. Current rate:
Mastercard - 0.85650
XE.com - 0.86332

I maxed out my card when the dollar hit around $1.10.

Yes, it was wonderful when it was above parity. That is why I decided to do a six week US trip last year, as it was, relatively speaking, cheap with the dollar above parity. When I went back this May, it cost me a lot more, but still historically cheap.

Was planning another trip to the US next year, to go to NEAF or Stellafane (again), but am no longer doing that with our dollar falling against the US. NEAF is now definitely out of the question, not only because the trip will cost more, but so will all the gear I might buy at NEAF. Oh well, that's life!

With the Aussie expected to fall to 75 cents, it will make everything much more expensive.

[Bassnut (Fred)]

I found Ozforex way cheaper than any bank service, period.

[Renato1 (Renato)]

Originally Posted by killswitch

Some credit cards like the 28degrees International card (GE) have no international transaction fees, currency conversion fees and annual fees. It also didnt have cash withdrawal fees until this year (people kept loading it up with money and withdrawing it overseas).

It uses the Mastercard rates which is pretty good. Current rate:
Mastercard - 0.85650
XE.com - 0.86332

I maxed out my card when the dollar hit around $1.10.

The only thing you have to be wary of is that if your card is stolen or defrauded, GE Money (and most other banks) only cover you for the credit limit part.

If one tops up the card to a positive balance, that balance is not covered in the event of fraud. So the wise thing to do is to B-pay small amounts like $2000 into the account, then take it out from the ATM when it arrives. This is so easy to do with a smart phone nowadays, it makes me wonder how we ever did without one in the past.
Regards,
Renato

[David Niven (David Niven)]

I used to pay for overseas purchases with my CBA Visa, until a friend suggested using the GE 28 Deg Masters card.
The 28D exchange rate is much, much better and there is no international transaction fee!
Never again will I use my CBA Visa.......!!!!!

[rustigsmed (Russell)]

i'll have to check this card out next time I travel. thanks for the heads up.

[RickS (Rick)]

A Citibank Plus card is the most cost-effective way I've found to do ATM withdrawals overseas since they started charging fees on the 28 Degrees card.

http://whirlpool.net.au/wiki/citiban...action_account

[Renato1 (Renato)]

Originally Posted by RickS

A Citibank Plus card is the most cost-effective way I've found to do ATM withdrawals overseas since they started charging fees on the 28 Degrees card.

http://whirlpool.net.au/wiki/citiban...action_account

Thanks Rick, that's really excellent advice. Exchange rate is pretty much the same as for 28 Degree Mastercard.

So, take the Citibank Visa Debit card for cash withdrawals and other transactions, and 28 Degree card for credit transactions (especially when they can be lumpy, as with my Hertz car hire - especially after I had a prang there last year).

Taking these two cards means I would no longer have to take my back-up Australian cards, for the odd times my main card is mysteriously declined, or won't work with various ATMs.
Regards,
Renato