Best Way to Secure The Foreign Currency Exchange Rate?

harrylovevee on 21/09/2015 - 12:59

I am raising the question base on the assumption that AUD is gonna keep dropping for a while and for people who are traveling in the far future.(like the Jetstar Japan sale for next year travel)
As a ozbargainer, I know I only need two cards, 28 degree for credit card and Citibank plus for cash withdrawal.

However, what is the less costly way to purchase the foreign currency in advance so I can lock the rate?

Otherwise, even we got very good rate by using the 28 degree or citibank plus, the exchange rate may drop way more than that….
(Ex. I went to Japan same time last year, which is 15% drop comparing to now and I'm going next year again and god knows how far AUD is gonna drop again….Orz)

I have checked the Aus Post cash passport by mastercard(which is having 2% cash back offer)
https://www.cashpassport.com.au/2-percent-cash-back
But maybe I'm used to be an Ozbargainer and whenever I see so many fees involved….I don't want to use it….

Any good suggestions?

Financial

Comments

  • inherentchoice on 21/09/2015 - 13:11

    You could get cash today if you want. You can actually shop around and negotiate with a lot of the small currency exchange outlets for the best rate. Especially if you are changing a sizable amount.

  • tomatosauce on 21/09/2015 - 14:32

    Traveller's Cheque, maybe…

  • harrylovevee on 21/09/2015 - 14:39

    hmm….looks like we don't have many options then.

  • lupiter on 21/09/2015 - 15:02
    +1

    Option 1: Traveler's Cheques. You should still be able to cash them a big hotels and major banks.

    Option 2: Pre-loaded card. You'll have to do the sums carefully on this one. Last time I went to Japan I worked out that if I withdrew… something like more than $500 at a time and made at least 10 withdrawals it was cheaper to go with a travel card than my regular (CommBank so not low fee) card. So I just took a (visa/mastercard debit) bank card.

    Option 3: Pre-paying for big expenses can be the lowest-fee way to lock in the exchange rate. Think about how you spend money on the trip vs how much you're going to pre-pay (hotels? tickets? airbnb?), and also how much you are worried about withdrawing cash in large quantities.

    Option 4: Cash. If you don't mind carrying a few grand in cash. Your bank may give a better exchange rate than Travelex and friends, so shop around. You'll probably need to give a bank more notice so they can get the cash in.

    Option 5: Gold. Nah, just kidding. Don't try that.

  • inherentchoice on 21/09/2015 - 16:59

    Haha just had a thought. Dare I say BitCoin?

  • cch24 on 11/10/2015 - 17:42

    Im in a similar situation. Booked a Japan trip and didnt pay for hotels up front, kicking myself now. The ex/rate is a bit better today so im going to ask the hotel if they can charge my 28degrees credit card to take advantage of the favourable rate.

  • [Deactivated] on 12/10/2015 - 22:08

    Here's an idea, simple as, even if it doesn't seem so at first.
    Open an igmarket account at http://www.ig.com/au
    It costs nothing and is no paperwork, can have your bpay funds in account in a day or two. Open an Aud/Jpy position for the value wanted. I think nightly rollover will be about 2%/365 so using their margined funds, and keeping 3/4 of your cash in ubank etc. The whole thing will hopefully breakeven costwise.

    When you travel, just close your Aud/Jpy position, request your funds back to your bank account (ubank). Your aud funds are thus adjusted to the later fx rate with litle/no cost, with the expected aud/jpy fall skipped, if you follow all this.

    Ig is an easy place to work thru, but they ARE sharks imao.
    Just an idea that I believe is cheap, practical and reliable.

    At a guess the total buy and sell fx cost will likely be one tenth of one percent, and as stated holding position for months, with the bulk of funds in your ubank etc account, will maybe break even.
    Transfers cost nothing, and the browser-interface is very decent.
    So consider the idea.
    I wonder if Easternculture might comment as he's cluey about finance?
    Best of luck

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