Buy Foreign Money/Cheques

hatts on 24/07/2012 - 15:02

Greetings All,

Just trying to figure out the cheapest way to get hold of foreign money (or as good as) at current exchange rates.
The way I see it my options are:

Pre-load travel card

Buy travellers cheques

Buy foreign cash

Has anyone else looked in to this before to share their findings?

The bigger picture is I'm doing a bit of a trip around the UK in about six months and wouldn't mind hedging my odds with the exchange rate, probably looking to get somewhere from $500-$5k but I have to weigh up the conversion/holding costs and lost interest. Before I go I'll grab a 28 degrees card and and use that while away.

I have a feeling I might be better off and less hassle keeping the cash in the bank and rolling the dice with exchange rates (can't see the GBP or AUD moving too far in opposite directions in the next 6m) plus a bit of variation won't hurt me to much.

Cheers.

Financial

Comments

  • hatts on 24/07/2012 - 15:03

    oops, didn't realise a hash symbol would have that effect.

  • johnn on 24/07/2012 - 16:08

    Given you're not looking at exchanging a significant amount (max $5k), in my opinion you're better off just leaving your money in a high interest savings account for the next 6 months.

    Not that I have any certainty about what the market will do, but let's say there's a drop of 0.05 on the GBP-AUD in the next 6 months, with $5k you'd be losing $250.

    However, considering the currency conversion fee, reduced exchange rate offered in those options, and the forgoing of a guaranteed 5.71%pa compound interest rate with UBank for example (which compounded daily with no contributions gives you $144.29 in 6 months alone), at worst I see it evening out in the end anyway.

    How long are you staying in the UK? If you're staying for a while you can just load up on cash at the beginning of the trip if the rate is good. In February this year I was in the UK when the rate was 0.68, then I went around Europe for 3 months and when I came back to the UK the rate had dropped to 0.62 :(. I used the NAB Gold Card though so I had the best possible rates I guess, just a shame I had saved all the shopping til the end of the trip!

    • hatts on 25/07/2012 - 14:10

      Thanks johnn,
      I appreciate your input/advice.
      I think I'll hold off on exchanging anything right away and just play the rates while I'm over there as suggested.
      The length of my trip is up in the air at the moment, I have 6m to decide on my budget/length of trip and that will probably be dictated by how busy I am with work etc closer to the time.
      Obviously the cost to exchange now (versus when I get a 28degrees card or similar) and lost interest are big factors and I agree that the likelihood of a massive swing in exchange rates is pretty low.

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