Having lived in various countries around the world I see Australians being ripped off, maybe gouged, by the banks for international financial transactions. What can we do about this?
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I donāt know what is normal for other countries, I tend to use both Paypal and my credit card, and depending on how much the transaction is for, one can be cheaper than the other. What is confusing is that Paypal, particularly on Ebay, does not give an up to date or accurate amount for the transaction, it depends on the exchange rate and how ahead, or behind any fluctuations Paypal is. The variation on the exchange rate can be anything up to 4 or 5 cents per $. The amount for a transaction on Ebay can be out by quite a bit over a $100 purchase. Of course, if I use a credit card, I have no idea what I have spent at all unless I calculate it myself. For large amounts, one can use bank to bank transactions (ITT), but you have to trust the other party absolutely and if an escrow service is involved, they have fees too.
I agree that banks and others exploit forex charges. Qantas Cash is another. It invites you to load forex on your card. I did so to allow for 2 withdrawals of 20k baht plus I allowed 360 baht for ATM fees. Well I did not trawl through the PDS which would have afforded me the opportunity to discover that they also deduct $1.95 each time you withdraw. Presumably I should have added 3.90AUD to balance to allow for this.
Lets hope there is an inquiry into the banking sector soon to make transactions more transparent
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We had a Danish friend pay us for something recently & it was weirdly expensive in bank chargesā¦ why? Seriously? How much does it cost bank to do international transfers? When I can buy something from the UK or USA online quite cheaply, I donāt understand how it costs so much to transfer money (under $1,000 in our case) between countries.
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Why are banks and credit companies both international and national allowed to charge a percentage of a credit transaction rather than a flat fee? It seems like gouging to me.
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Its crazy the amount Australians have to pay on international money transfers, or purchases from overseas. It seems that they take us all for a bunch of fools who will not question all of the ānecessaryā expenses. My advice is, Shop around for the best deals, at the best Financial Institutions, whether it be a bank, post office or credit union, and use one with the lowest fees. Voting with your business is the only way things will change, and when enough people change Institutions, they may realise that we the people are speaking and mean what we say, and yes we can, actually hurt them where it really makes a difference - in their bottom line via their profitsā¦
I have found PayPal still the cheapest option as they only charge a !%conversion fee, and it avoids bank charges, which are much dearer,
I have both the Qantas and the Virgin card. Theyāre much the same - just check their fees; theyāre clearly disclosed on the website. But their withdrawal fees are competitive with domestic ATM withdrawals and their exchange rates are better than youāll get at those Travelex stalls or FOREX fees charged by domestic credit cards/banks. The trick to them is to load up your AUD and transfer to your target currency. Then make sure you pay in that currency, and do be careful because the credit card companies can mess you up on this one at the POS because they give you a choice of which currency to pay in and default to the most expensive option. If you donāt pay in the correct currency, youāll be hammered with an outrageous FOREX charge - much worse than the banks and normal credit cards.
All that being said, Iāve read on the traveller forums that the best way to go is to open a Citibank Plus bank account which gives you a Citibank Debit card. Their ATMs are all over the world allowing you to avoid ATM fees and they supposedly give a good exchange rate with no FOREX. I donāt know much more about this as I donāt have a Citibank Plus account.
For bank to bank international money transfers I found the best way to accomplish this is to open a FOREX account. I opened one with AusForex but there are lots. Transferring money is literally orders of magnitude cheaper than bank to bank - for transfers under AUD10k, the fee is a flat AUD15 and transfers over AUD10k incur no fees. Banks with their percentage cut have charged me hundreds of dollars. Forex can be a bit scary because their platforms are geared to currency traders but if you choose a good company, theyāll help you out. I actually made a decimal point error (ouch!), realised it 5 minutes later, called AusForex in a panic explaining my noobiness and they actually cancelled the contract for me with no more warning than, āplease be more careful next time. This is a legally binding contract.ā
Anyway, ymmv.
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I agree that we are being ripped off but there ARE alternatives out there. I do 100% of my banking with Westpac but their international fees both transaction fees and FX Rates are way above what i am prepared to give them (i did call and state that i was going elsewhere for all my international transactions and gave them the reason). A few years ago i shopped around for alternatives and have found two cards that offer no fees and FX Rates which are inline with XE Currency which i use on my smart phone to check conversion rates before purchasing items overseasā¦
The two cards that are worth looking into are:
GE Money 28 Degree Mastercard - The card has no foreign transaction fees and a FX rate in line with XE. They started charging feeās for OS ATM withdrawals so i donāt use this card for Cash ATM withdrawrals. Interest rates are quite high if you donāt pay the full balance off every month. But it you pay the full balance, there is absolutely no fees involved.
Citibank Plus Debit Card - We use this for all our Cash and ATM withdrawrals around the world. Again there is a competitive FX Rate and no Transaction or withdrawral fees for Citibank ATMs around the world.
With these two cards, all Foreight currency needs are covered without lifting a finger or taking foreign currency out of Australia. Just use an ATM at the airport when you get there for any cash requirements and your 28 Degree Mastercard for any credit card purchasesā¦ All payments and transfers to these cards can be done by online funds transfers from a PC/Mac or Smart phone/Tablet. Could not be easier.
Regards
John.
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Banks here canāt always know what the bank in the other country is going to do, nor do they have any control over it. I was once told by a bank here that there would be no further charges other than theirs on a transfer to Spain, then the Spanish bank charged an additional $60.
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The problem is called capitalism, with every large business run for the benefit of managers on incentive compensation bonuses.
The other alternative is called Communism.
Now you know the problems that is more than half way to solving them. Let us try to think up a better compromise.
Re cead: without putting too fine a point on it - under communism there is no need to transfer funds because ā¦
For Funds Transfers
I recommend using Currency Fair https://www.currencyfair.com/ for funds transfers not involving USD, eg. AUD to Euro
The fees are tiny and the cost quoted includes any charges at the receiving end and shows the amount received by the recipient
NB always check the forex rate on xe.com beforehand and understand that the rate quoted is the interbank mid-rate
CHOICE has some great resources on travel money that are worth checking out. Trying to work out whatās going to save you $$ when youāre on holidays is a minefield, but hopefully this helps a little! https://www.choice.com.au/travel/money/travel-money/buying-guides/travel-money
Carl I want to write to thank you for all of your excellent adviceā¦!! I have taken notes of your ideas, and plan to implement all of them on my next overseas holiday. Thanks again, your help will come in very useful to me, and I am sure many other Choice customers and overseas travellers. Kind regards, and ta! 
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No worries - glad my information was useful. Please post your experiences and if you find a cheaper way to travel, let us know! Have fun on your next O/S holiday.
Cheers,
Carl
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Thanks to everyone for a really good discussion. I hope CHOICE will do another study of this topic for the benefit of us and very many members.
For me, although CurrencyFair looks like a very good prospect Iāve found that the bank Iām dealing with (in Malta) has never heard of it. Paypal looks like the best option for bringing foreign currency to Australia. But Iāll keep studying this thread for there are a lot of good ideas.
It seems like thereās a lot of interest in currency converters. Weāve definitely seen a rise in the number of apps advertised that offer this service.
Iāll pass this on to our investigations team and see if we can have someone take a look.
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I found that if I get my $USD pension converted to $AUD on the US side and wire the $AUD to an Australian bank I will end up with about 5% more $AUD than if I wire the $USD to Australia and let our banks do the conversion. 5% is a pretty steep ānon-feeā, especially when they also add their fees on top!
Tilly, I hope youāre still interested in an investigation of this. My experience, and that of our friends, points to a monumental gouging session being run by the banks against gullible consumers.
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