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Managing Money in USA

Canberra, Australia
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85 posts
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Managing Money in USA

Hi guys,

Myself and 5 of my girlfriends are spending 7 weeks in USA in June this year and we are having a lot of trouble finding a way to manage our money. We are spending all our time in USA except for 3 days on a cruise in the Bahamas so we really only need USD for our trip.

We do not want to use credit cards and we would really like to lock in the exchange rate if possible if that is the better option as it is currently 1 AUD = 0.94 USD. (Highest its been in 5 months)

So my question is... What is the best Aussie travel card or debit card we can use for our entire trip?

Canberra, Australia
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85 posts
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1. Re: Managing Money in USA

Can anyone tell me from personal experience about either the commonwealth travel money card or the citibank plus debit card? These are my two main ideas at the moment.

rural West Aussie
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for Perth
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2. Re: Managing Money in USA

The CBA travel money card is a poor idea, because while it locks in rates, they are very low rates, about 5% lower than the advertised exchange rate (that's how they don't charge "fees"). The Citibank Plus Visa debit card has no foreign use fees beyond what is charged by the owner of the overseas ATM, and their exchange rate is as close to the advertised exchange rate you'll find anywhere besides on the 28Degrees MasterCard. While this exchange rate will fluctuate, it would have to drop a considerable amount before the CBA card is a better deal.

In addition, getting excess funds off the CBA card if there are any when you get home, is a PITA.

Melbourne
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3. Re: Managing Money in USA

My bf and I used the CBA travel card last year. It worked for us in the end as the CBA rate we got when loading our money onto the card was considerably higher than what the rate was by the time we travelled - we would have paid a lot more in AUD if we had used another card that gave us the rates at the time we were travelling. We took a gamble doing that and it paid off, however if there is not a significant drop in the rate now vs June then obviously you won't get this advantage.

We also used this card for convenience and budgeting purposes. Once we hit our savings goal we put it all onto the card so we knew we had enough in USD for everything we had planned. Just before we left I also exchanged our extra savings for USD cash.

We didn't reload onto it so didn't get hit with the reload fee and didn't need to get any money off it back home as we used the full amount. When using it as a credit card to purchase / pay for things there are no fees. And I can't remember which US bank/s we used but we were never hit with ATM fees other than the standard $2 or $2.50 by those banks.

rural West Aussie
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for Perth
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4. Re: Managing Money in USA

The problem is, melbtraveller, that while the rates on _travelcards_ may have dropped, so you got what you thought was a good deal, unless the overall exchange rate dropped by more than 5% you still would not have got as good an exchange rate as the Citibank card. The rate offered by the travel cards is considerably lower than the normal bank exchange rate.

It was also not a good idea to exchange for USD cash here in Australia; you would almost definitely have got a better exchange rate had you waited and bought your USD in the US. In almost all cases you get a better rate buying any currency in the country that issues it.

Washington DC...
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5. Re: Managing Money in USA

I suggest you use a bank ATM in the USA to get $ from time to time. You may pay $5 or so total fees but will get the best rate that day. Be sure to tell tour bank you will be traveling. We use 4 digit PINs for the mag stripe ATM cards.

Be aware that debit cards can be problematic for car rentals. Some agencies want credit cards, others put a huge hold on your funds.

I like to use a no foreign transaction fee credit card for travels and pay it off once home. In the USA it is not the case you get a credit card surcharge.

Canberra, Australia
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6. Re: Managing Money in USA

Thanks everyone for your help, excuse me if I am asking silly questions (I am new and not very good with the whole foreign money thing).

So if I was to go with the citibank plus debit card, what would happen if by July the currency dropped to say 1 AUD = 0.89 USD, wouldn't that mean that every time I withdrew say $500 from an ATM in the US I would only end up with approx $450 USD meaning I loose $50 each time? Would in the case that the currency was low it be a better idea to get a CBA travel card in USD soon with a fixed conversion rate of say 0.92 (fingers crossed it goes up that much)? Or do the load fees and account closure fees add up to just as much on the travel card?

rural West Aussie
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for Perth
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7. Re: Managing Money in USA

Your reasoning is sound, but I just called the Commonwealth Bank (there's dedication for you) and, while xe.com has the AUD-USD exchange rate as 93c, if I bought a CBA Travel Card today I'd only get 89c for my AUD. So you're already paying dropped prices. Plus you pay $15 for the card and $2.50 every time you use it, plus whatever the ATM owner charges. Not worth it. As I said, the currency would have to take a fair drop before the CBA card was even breaking even, let alone leaving you in profit.

If you need a credit card (as Honu_Ohana mentions), apply online for a 28Degrees MasterCard. They also have the best exchange rate, no foreign fees and if you pay off before 25 days after statement date, no interest. You can't make cash withdrawals with it, though. Well, you can, but they charge 3% on it immediately.

Edited: 10 April 2014, 01:58
Sydney, Australia
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8. Re: Managing Money in USA

My wife and I have investigated this in depth.

For getting money out of ATMs, the best choice is the Citibank Plus bank account with its associated Visa debit card. For credit card purchases, use a 28 Degrees Mastercard.

Travel cards are rotten value for money, whether CBA, ANZ, NAB, Qantas, Velocity or whatever. The exchange rate you get is 5% below the rate given by Citibank Plus and 28 Degrees, so the exchange rate would have to drop from the present 0.94 USD to 0.89 before it would be worthwhile locking in the exchange rate with one of these cards.

For more detail, see http://www.nickbooth.id.au/Tips/Cards.htm

Darwin, Australia
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9. Re: Managing Money in USA

Another vote here for the Citibank Plus Card. I used it in Mexico and it was great, no problems and no fees.

The other way to look at this is what if you lock in a rate now and the exchange rate continues to rise? Then you have lost out, still get a bad rate and still have to pay the fees.

Unfortunately none of us have a crystal ball regarding exchange rates (oh I wish), but overall the Citibank Plus Card is a MUCH better product.

Melbourne
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10. Re: Managing Money in USA

>> The problem is, melbtraveller, that while the rates on _travelcards_ may have dropped, so you got what you thought was a good deal, unless the overall exchange rate dropped by more than 5% you still would not have got as good an exchange rate as the Citibank card. <<

You misunderstood me, I wasn't comparing travelcard rates. I was comparing travelcard rate when we purchased it vs official rate when we travelled (I had a 28Degrees credit card as well so if we had used that, we would have got close enough to the official rate).

Official rate on the day I purchased our card = $1.046USD (approx. $1.006 rate for the travel card)

Official rate on our first day of travel = $0.96321USD

Average official rate for the duration of our trip = $0.956USD

We also didn't pay any fee to get the card (waived as we have all of our banking with CommBank) and barely used ATMs to get cash out as we already had some cash and paid everything we could via eftpos / credit card which incurs no fees.

In *our* situation our gamble of preloading our card with USD paid off. By the time we travelled, the difference in the rate was significant. Is this the norm? No, definitely not, I know we were lucky.

I agree that in the majority of cases, you will lose money if you go for one of the travel cards vs 28Degrees or similar so it's up to the individual to educate themselves on how it all works and weigh up the difference in exchange rates, make sure you're aware of all fees and decide which way they want to go.