Falling AUD - Traveling USA in October - Should I Load up Some USD on a Wise Card Now?

SkMed on 17/08/2023 - 15:21
Last edited 17/08/2023 - 22:14

Hey all,

I'm traveliing the USA for all of October and a bit worried about the rapidly falling AUD/USD exchange rate. I've paid for everything so far except a campervan which is approx $1800 USD to be paid on pickup. Since I booked the Camper in July, the falling AUD has meant the price for the camper has risen about $200 AUD already so far :(

I've been trying to wrap my head around how these Wise accounts/cards work, but Im pretty sure I can get myself a Wise card and load up $2.5k of USD onto the card now to lock in the current exchange rate and then use this to pay the camper van + have $700 spending money (withdraw several hundred as cash when I get and keep several hundred on the card), and not have to worry about the falling USD so much, is this correct?

I'm aware the AUD/USD may improve, but I think they're likely not to before my trip and I'd prefer the piece of mind it doesnt cost me much more than already budgeted for.

Or any alternative ideas? I already signed up for a 28 degrees card, but only because I also need to give the camper van hire place a credit card and I dont have one.

Financial Currency Exchange

Comments

  • AustriaBargain on 17/08/2023 - 15:37
    -4

    If you were certain the AUD was going to fall against the USD and you know you will need USD later, then it makes sense to convert it now. But if certainty was that certain then everyone on the planet would bet against the AUD to make some ez money.

    • SkMed on 17/08/2023 - 16:04

      Haha yeah, I'm not certain, but looking likely at this point that it will continue down until later in the year at least.

  • toomuchdogfur on 17/08/2023 - 15:39
    +1

    I've been trying to wrap my head around how these Wise accounts/cards work, but Im pretty sure I can get myself a Wise card and load up $2.5k of USD onto the card now to lock in the current exchange rate and then use this to pay the camper van + have $700 spending money (withdraw several hundred as cash when I get and keep several hundred on the card), and not have to worry about the falling USD so much, is this correct?

    Yep spot on. You can buy USD now and it'll be kept in its own pool of funds in your Wise account. When you go to spend using USD using your Wise card, it'll draw down the USD balance first. If you deplete your USD balance it will revert to converting from AUD at the spot rate + a small fee.

    Or any alternative ideas?

    The Wise card is the easiest way to prep USD prior to travel IMO, saves you from having to carry wads of cash. Only caveat is that you can't withdraw more than 350AUD worth a month in cash without incurring additional fees.

    • TooSerious2 on 17/08/2023 - 15:53

      That's a big caveat. Even when I was a boy, Frommer's USA on $10 a day was out of date.

      • toomuchdogfur on 17/08/2023 - 16:04

        You can get by with VISA Debit for most places - the limit doesn't apply to card purchases, just cash withdrawals. But yeah it's not much if you're going somewhere cash-dependent.

    • SkMed on 17/08/2023 - 16:03

      Yeah I did see that re only able to withdraw 350aud.

      Can I use it just like a debit card while travelling the USA to draw down from the preloaded USD without incurring additional fees? so when I pay for fuel for insurance I can just tap/swipe as per a debit card and be on my way?

      If so I'll draw out $350aud worth of USD cash, then pay using it like a debit card when/where possible, hopefully for fuel at least. The $350aud will hopefully cover me for food and drinks mostly I'm hoping.

      • toomuchdogfur on 17/08/2023 - 16:05

        Can I use it just like a debit card while travelling the USA to draw down from the preloaded USD without incurring additional fees?

        Yep - the limit only applies to cash withdrawals. There's no limit to transactions made directly with the card or online.

        • SkMed on 17/08/2023 - 16:30

          Ok, great, thanks for the info. I was pretty sure thats how it worked. I think I might just convert a little more spending money and lock it in.

      • ryefig on 18/08/2023 - 09:26

        Wise seems to be the most talked about travel card but speaking from experience I have the Westpac travel card that works in a similar function where you transfer funds from your transaction account into the travel card account at the rate of the day.

        I got the card because for travel to the US because there are no ATM fees if you use Bank of America ATMs.
        It also has a flight delay feature, if you register your flights and they're delayed by 90 minutes, you will receive a pass to enter an airport lounge. A handy feature if you're flying Qantas or, dare I say, jetstar.

    • burningrage on 17/08/2023 - 21:20
      +1

      Just so you know, Wise is introducing a new fee Dynamic Charges so it's interesting to see if Wise remains competitive. Last time I convert AUD to IDR, their rates were crappier than google rates.

  • autonomate on 17/08/2023 - 15:46

    USD on Wise -> USDC on Nexo, earn interest -> Cash out 1 month before trip.

    • askbargain on 17/08/2023 - 20:50

      why don't you get ozbargain coin? it's hedged against USD and earns more interest

  • Shadowsfury on 17/08/2023 - 18:40

    Consider using both Wise and Revolut so that you get two shots at the cash withdrawal limit

  • Ocker on 17/08/2023 - 18:57

    You have missed the boat in trying to minimise the FX risk.
    Current situation is that the AUD has lost value against the USD, largely driven by interest differentials. Evidenced by the fact the AUD has moved very little against other currencies
    Given the outlook (IMHO) is the Aussies interest rates have peaked, and the US interest rates have only a small increase left in this cycle, then the AUD does not have much further to fall (if any).
    My opinion aside forget all of these sensationalist press stories of the AUD heading below USD0.40. The author's only make such outlandish forecasts to get their name/institutions in the press.
    Bottom line:
    The AUD may fall a little further, if anything against the USD.
    For me, I would not panic now - it's too late

    • burningrage on 17/08/2023 - 21:23

      Dollar goes down because RBA doesn't increase interest rates because Lowe's scared of upsetting Chalmers who is scared because inflation are high because dollar is weak so imports are more expensive and so on.

  • plmko on 17/08/2023 - 20:09

    People never stop and think what they're even doing in this scenario…….$2.5k USD even if the USD was to rise 5c to 59c that's $200 AUD, which is jacked up by Wise conversion instead of Visa conversion.

    It's not even worth thinking about if you can afford a US trip to begin with.

    • SkMed on 17/08/2023 - 21:58

      Thats not really true. Since I made the booking just 4 weeks ago, the cost has gone from $2900AUD to $3100AUD, so if it were to continue on this same trajectory for another 2 months when I go to pickup the camper van in mid Oct it maye be closing in on costing $3500 AUD. So thats actually $600 more than originally budgeted for just for that component.

  • vodamerc on 17/08/2023 - 20:33

    Classic case of fomo after the drop has already happened…

    • SkMed on 17/08/2023 - 22:13

      I honestly hadnt even been aware the drop was even happening until yesterday :(

  • burningrage on 17/08/2023 - 21:24

    Boat's sailed already methinks.

    • SkMed on 17/08/2023 - 21:59

      You dont think the AUD is going to keep falling?

      • burningrage on 18/08/2023 - 09:51

        I think they will drop further. So if you are in the rush and have to do it, I would do it now.

        There is an article about fuel price will remain elevated, that's how confident they are dollars gonna be weak for some time (and the petrol price worldwide too).

  • johnnygolden on 18/08/2023 - 13:39
    +1

    I have observed that every time I plan a trip to the US the AUD falls immediately before I leave, and concluded that my travel plans are the cause of the depreciation.

    Sorry about that.

    • Ade99 on 11/11/2023 - 09:03

      more associative perhaps?

  • Ade99 on 11/11/2023 - 09:02

    US costs the same if not more that Oz prices, especially when you add State Tax, tips etc etc…..You may need more than US$2500 for a month even using apple pay / Wise / Revolut….

    • SkMed on 15/11/2023 - 15:21

      I just got back. The only things that were on par or cheaper than Aus was booze, drugs, fast food and fuel (as much as all the yanks were complaining about their "high" fuel prices while I was there lol. Fresh fruit and veg was skyhigh expensive, like $8+aud for an avocado expensive.

      FYI, I ended up loading up about $4.5k usd onto my wise card and spent it all over the course of the 3.5 weeks I was there (however 2.5k was to pay for the camper van, and about $400 in fuel), the rest covered my day to day spending (apart from accomodation which was pre-paid before I arrived).

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