USA Late 2015- AUD rate now

[doczim]

I was looking for some advice from the more learned than I. My last trip to the USA I took the then best advice about the 28 degrees card and used it wisely and it worked well for me as essentially a prepaid credit card by me placing big wad of cash on it before we left and using the card with its no fee and great rate. Now with there changes that's no good and I see that the Citibank Plus is the recommended card. But the thing that concerned me more now that wasn't an issue for me last time is the falling dollar.so I thought it better to lock in some funds the prevailing rate now rather than waiting till dec 2015 where from all that I've read it's more likely to be in the low 70c

Is a cash passport style eg Qantas Virgin etc the only way to achieve this locked in rate? What would you recommend?

Thanks

 

[opusman]

Unless you have a US bank account the only real way is a pre-paid cash card like Qantas Cash, travellers cheques, or cash itself.
Qantas Cash has the advantage of earning FF points when you spend.

 

[knasty]

You can buy an asx exchange traded fund quote USD which invests exclusively in USD cash. If you use a discount broker the transaction costs are very low.

 

[opusman]

You can buy an asx exchange traded fund quote USD which invests exclusively in USD cash. If you use a discount broker the transaction costs are very low.

How do you use that to spend money in the USA?

 

[knasty]

You sell when you leave and use your Citi Plus account for no Fx fees. If the Aud has depreciated by 10% in the meantime your USD Etf will be worth 10% more. Much lower transaction cost than buying physical currency a year out with the typical 2%+ spread.

 

[opusman]

You sell when you leave and use your Citi Plus account for no Fx fees. If the Aud has depreciated by 10% in the meantime your USD Etf will be worth 10% more. Much lower transaction cost than buying physical currency a year out with the typical 2%+ spread.

But when you sell you end up with AUD which you then have to convert back to USD again?

 

[doczim]

Sorry, I went AWOL for a while. thanks for the input. some sort of travel card it is

 

[cove]

Travel cards are the best way to lose up to about 4 or 5 % of your hard earned funds if you deal with the Big 4 banks. The best debit card is Citibank Plus at the moment as 28 Degrees now grab 3% of the cash withdrawals.

 

[doczim]

Travel cards are the best way to lose up to about 4 or 5 % of your hard earned funds if you deal with the Big 4 banks. The best debit card is Citibank Plus at the moment as 28 Degrees now grab 3% of the cash withdrawals.

But with the Debit card from Citibank Plus it the prevailing exchange rate at the time the transaction is processed by them right?

 

[cove]

Yes that is correct.
I have a US bank account and I use US credit cards.

 

[exceladdict]

OT, but in my experience, the AUD trends down whenever I'm about to go overseas and proceeds to rebound just after I get back (OS trips April '07, Feb '10, Jan '11, Jun '12, Dec '13).

Alas, since I bought my upcoming flights last November, AUD/USD has dropped 6 cents since and I predict this to continue to my departure.

I'm predicting therefore that when I'm firmly back in Australia in April, the dollar will be on the rise again then.

 

[doczim]

OT, but in my experience, the AUD trends down whenever I'm about to go overseas and proceeds to rebound just after I get back (OS trips April '07, Feb '10, Jan '11, Jun '12, Dec '13).

Alas, since I bought my upcoming flights last November, AUD/USD has dropped 6 cents since and I predict this to continue to my departure.

I'm predicting therefore that when I'm firmly back in Australia in April, the dollar will be on the rise again then.

I feel for you, but very funny post!

 

[doczim]

Yes that is correct.
I have a US bank account and I use US credit cards.

thanks cove

 

[wycx]

Another option is to open a US dollar Flexi-saver foreign currency account with HSBC. Buy US dollars now and keep them in the account, and then withdraw them in cash (this will attract a fee) from a HSBC branch before you leave. Alas HSBC does not offer anything like Citibank Plus as far as I know, so you need to get the USD in cash. You can use the flexi-saver to do fee-free FX exchanges from an AUD transaction account, though I do not know how competitive the HSBC rates are. I also have a HSBC US dollar term deposit (pitiful 0.38% p.a.), which is one way you can lock an exchange rate in ahead of time and earn at least something in the meantime. Note that foreign currency accounts are not covered by the Federal Govt. guarantee.

Others may have an opinion as to whether ASX:USD is a better way to engage in un-leveraged FX speculation.

HSBC flexi-saver is avaliable in other currencies as well, which is useful given the dismal trajectory of the AUD for the forseeable future.