Best way to exchange AUD to USD when AUD is dropping? - Australia Forum

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I've done a search of the forum but can't seem to find my answer. I'm going to America in October, and am looking at my options to exchange about $3000AUD. The reason I'm wanting to do this now is that the exchange rate is looking to drop (currently at .93 forecasted to be .87 in September/October).

Most of the advice I've seen is to use 28 Degrees or Citibank Plus Debit, but if I do that in October I will be paying more than if I exchanged to USD right now. Therefore I think a preloaded card would be a better idea. Does anyone have any advice on the best way to go about this, as I've seen a lot of posts suggesting preloaded cards aren't good at all.

Firstly, last week they were saying AUD could regain parity, next week who knows what the story could be. Look back through the forecasts, with people saying AUD could hit 80c, a month before it hit .94.

The AUD is where it is because it is a balance of the buyers and sellers. if anyone could predict the future movement with any certainty - the market would already be there.

That said, if you want to lock in a rate, you'll have to pay a premium to do that. Your choices are foreign currency accounts, preloaded cards, cash, and prepaying expenses.

If you are going to the states, things like car hire, many hotels will allow you to prepay now - often at a discount. Companies like Hertz will even let you prepay and change your reservation.

Cash has some security risk, but if you can use it on your first few days over there, that may be acceptable. You can buy cash in $2000 quantities at around 1.5-2%.

Foreign currency accounts you pay the bank exchange each way, and around 1% on everything you deposit.

Preloaded cards you pay around 6%+

Thanks for your reply!

I am going to pay for all accommodation ahead of time, so I'm just planning to exchange spending money. I will probably do some cash, but would like the security of having a card.

In regards to the 6%+ for preloaded cards, would you be able to point me in the direction of where this information comes from so I can look into it further?

Look at the OzForex card. It's good, because you can see every fee up front.

You'll see the exchange rates are around 4% from the midrate. Plus ATM fees. Plus initial load fees, etc.

You'll see it on their website.

It obviously depends how much you load, and how you withdraw it as to the effective fee paid. But many of the fees and exchange are similar in range to what you'd pay with a "normal" credit card/debit card.

Westpac has introduced a travel currency card which doesn't look too bad . although you need to read up on it to avoid any fees, although they don't seem to have too many.

It's free t set-up but they charge to reload, if you use all the funds it's not too bad . depending on your exchange rate.

As to what the exchange rate will be in a few months that's impossible to tell . luckily stuff in the states tends to be fairly cheap anyway.

Able, the problem with the Westpac card amongst others is the hidden margin on exchange rates. This is what inas alluded to with "Preloaded cards you pay around 6%+"

Westpac, like most vendors of these preloaded cards, tries to hide this, and manages quite well in doing so. On the travel card part of the web site, they say the exchange rate is simply, "The Westpac foreign exchange rates current at the time you transfer funds." But that obfuscates the matter, because they have worse exchange rates for their travel cards compared to other methods of exchanging money!

You can only see the real exchange rate margin by going to the currency converter, where at this moment the rate is 0.9022 to buy USD on the Global Currency Card . This compares to 0.9392 on another site for the mid-rate - or about 4% of extra exchange margin! When you also include the loading fee of 1% you're up to 5% - not as bad as some other cards, but not exactly a super deal unless you are very lucky with a big drop in the exchange rates between now and then.

Compare this to using a normal Westpac debit card, with exchange processed by the Visa network at about the midrate. You will also pay a Westpac foreign exchange fee of 3% in that case, which makes it somewhat better than the 5% with their travel money card. Next, consider that you can avoid this 3% extra fee by going with the Citibank card instead.

The crux ofthe matter is >>currently at .93 forecasted to be .87 in September/October<<

Who forecast that? How do they know? If those who write for the papers and make these predictions actually *knew* what they were talking about they would be at their computers making megabucks on the currency markets, not writing predictions and drawing graphs for newspapers.

I looked into the Westpac card quite carefully when it came out for the same reason, but decided against it for all the reasons mentioned by Jeremy and able suggested.

If you really think the AUD will go down, withdraw a bunch of cash, drop into your nearest exchange booth, change it into USD and stick the notes under your mattress till you leave.

I only mentioned the Westpac card because of all the travel cards with a lock in rate it seems the "best" . personally I would never use them and just wing the rate.

I agree about the cash . even though I get ticked of by others when suggesting it. In Queensland we have a great exchange company that gives much better rates than the banks and no fees . generally within .02 of the official rate. So we tend to stock up when we think the rate is OK.

One destination mentioned in this post

One destination mentioned in this post

Susan . you can always buy some cash and just keep it at home . safely of course . I have no idea what the dollar is going to do but it's not looking good for travelers.

It is quite common for Bali companies to quote prices in $USD - but to take payment in Rupiah as that is the country's legal currency (and why your credit card was charged in Rupiah). I always ask what the price is in Rupiah and then convert Australian dollars directly to Rupiah in Bali to cover the required amount (although I've never had to pay for something as large as a wedding).

I know this doesn't fix the dropping dollar issue - but I would check what currency you are expected to pay in - no point losing out by having to exchange your money twice.