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Bank fees on foreign exchange purchases

The Commonwealth Bank sell a Travel Card as a “low fee” way of managing your overseas purchases.  They charge $15 for the card, $3-50 per cash withdrawal and the difference between the official exchange rate for Euros today of $1Aust=0.834446Euro and the rate offered by the CBA ($1Aust = 0.7890Euro) is 5.76%.  Suppose I took a trip to Europe and took $2000 using the facility and made 4 cash withdrawals.  The cost would be $144-20 or about 7.2%. It seems excessive and an implication of the oligopolistically high prices for services charged by the Australian banks.  Choice Magazine suggest that  GE 28 Degrees Mastercard is about the best alternative deal around. Dealers at the airport, as might be expected, offer the worst deals. Any views?

10 comments to Bank fees on foreign exchange purchases

  • Adam

    Without a doubt, the 28 Degrees Mastercard is the way to go. I am just back from a 4 week o/s trip to Canada, the US and Fiji.

    Before I left, I added money to the card using BPay, so the card had a positive balance. When I was o/s, I would use the ‘credit function’ for making purchases, and ‘cash advance’ at ATMs for cash withdrawals, but it all came from my balance. When I knew the card was getting close to even (such that it would start using the credit facility), I simply logged into my regular bank account, and transferred more funds.

    The exchange rate was pretty good – about as close to the spot rate as you will get. And I don’t think you pay ATM fees to GE, but you do incur the o/s ATM operator’s fee ($1.5-$2 in most places).

    I’d recommend it.

  • Jim Rose

    I do not make cash withdrawls when overseas. the ATM fees do not make it worthwhile or are in developing countries.

    I just take enough cash and use my visa credit card whenever possible except in Australia.

    In Australia, I take more cash because of the 1 or 2% extra for credit card payments. why did that fee start?

  • conrad

    Thanks, I was looking at my CBA rates after coming back from Euroland a few weeks ago, and they were shite. I will get one of these cards (no fees either — I may ditch my CBA Visa too if I can’t think of a good reason to keep it).

  • I bank with CBA and their fees for using ATMs overseas are very high. I don’t remember their exchange rate being as bad as that though. I use three ways to reduce the cost:

    1. Try to use credit/debit card to purchase things as much as possible as this costs less.

    2. Take out a lot of money at once if you are going to be staying somewhere for a while. The percentage cost of the ATM withdrawal falls the more you withdraw.

    3. Use one of my US cards to withdraw money from my US account (lower fees).

    I should look at this GE card.

  • PS – I find that changing cash is often pretty cost effective in developing countries and even Hong Kong but ridiculously bad in places like Australia.

  • fxh

    The 28 Degrees card isn’t hassle free – I cant remember the details but they can/will cancel the card if they know you are going to load it up with cash beforehand.

    Plus GE has achieved the remarkable feat of being the biggest bunch of pricks in the credit business amongst a generally loathsome bunch. I’d avoid GE even if it saved me $

    My bank Bendigo charges bugger all. I do chat to the manager before I go. I use debit card and credit card.

  • Sinclair Davidson

    You don’t pay for the CBA card if you’re a client and you don’t pay the ATM charge that you’d otherwise pay on regular withdrawals so it isn’t as bad as it looks in the example above.

  • observa

    The kids had worked out that GE card (it has changed names) was the best for OS travel many moons ago and that’s what the missus and Co have been using. She loads it up with cash beforehand too and hasn’t had any probs as GE do get a cut from the merchants remember. Just carries the bank one for backup or the inclusive travel insurance if your Gold/Platinum card includes it. You usually have to purchase your travel ticket on it to qualify, but check those terms and conditions carefully for the obvious.

    When in doubt always ask the 20 somethings as they come with no such loyalty baggage like we old farts do and providers can’t hide anything from the net generation nowadays.

  • observa

    Was called Wizard Clear Advantage Mastercard now I recall, before GE took it over after the GFC fallout.(the Wizard Home Loans group)

  • observa

    And if you want to know where the 20 somethings hang out and get all their info and inside running on tech, comms and associated lifestyle stuff then check em out at Whirlpool Forums and a search of ’28 degrees’ in particular-
    http://forums.whirlpool.net.au/forum/?action=threads_search&q=28+degrees&f=&fg=-1

    As I said, try hiding anything from that tech savvy lot and if you want to clarify something that’s not already on some search thread, just join up and ask.

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