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Credit Card for Holiday and the odd purchase here and there

Discussion in 'Finance & Banking' started by archangelsupreme, 2nd Jan, 2008.

  1. archangelsupreme

    archangelsupreme Well-Known Member

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    Hello,

    I'll be going on a holiday in the next couple of months to SE Asia and Hong Kong and was just wondering what sort of money I should bring there.

    I think the majority of purchases will come in Hong Kong....and was wondering if I should take out a credit card (never had one before, EVER!) to cover for purchases and emergencies.

    Is there a good credit card out there with:

    * Good exchange rates
    * Minimal or no fees (preferred) associated with overseas transactions
    * No annual fee
    * Interest-free days

    On a side note, when a company like say BankWest's Zero MasterCard says 55 Days interest-free, does that only apply for the first 55 days when the account is open or does it apply to each transaction individually. i.e. you have 55 Days to pay off each purchase...how does it work...etc???...i've never used a credit card before.

    I also plan to use this credit card going forward for odd purchases over the internet. I normally use cash to pay for my purchases and thus, have a good credit history (plus I don't impulse buy alot...well, at least i don't think so..LOL).

    Thanks.
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    As an alternative (or in addition) to a credit card, have a look at the Travelex Cash Passport - Travelex Australia ... it is basically an ATM card which you pre-load with cash (in AUD, USD, GBP or Euros) which uses the VISA network - you can get cash out at any ATM on the VISA network. If you lose your card, it doesn't affect your other bank accounts, and you can easily get replacement cards too. You can also top it up via BPay.
     
  3. AsxBroker

    AsxBroker Well-Known Member

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    Awesome!
    Asia is very interesting and different to Australia.

    Generally, no, no annual fees will usually start charging you interest straight away (Ie, they have to recuperate their costs).

    If there are interest-free days they have to recuperate the "lost" interest by charging annual frees

    Generally, it will say "Up to XX days interest free". Say your monthly cycle starts on the 1st of each month, say you bought something for $1,000 on the 2nd of Jan 2008. If your cycle is the 1st of each month you will have UP TO 55 days after that date, ie, roughly 21st of Feb to pay without being charged interest. If you buy something on the 30th of Jan it will still be on your January statement and you still have to pay by 21st Feb 08.

    Naturally you have to read the Disclosure Statement from the Bank who issues the card.

    Sorry mate, believe it or not you don't have any "credit" (Ie, borrowing) history as you've never "borrowed" before because you pay cash. There won't be any credit history for you at CreditCorp or other Credit Agencies.

    Yes, it does suck, back 10 years ago I had about $10k in shares and paid everything by keycard. I went to OPTUS and asked for a phone, as I had never "borrowed"/contracted to pay a monthly payment optus told me to take a hike, ironically an hour after I went to Vodafone and signed up straightaway. 10 years later I am still a very happy Vodafone customer.


    Good luck as it's hard to be able to compare cards as offers are always slightly different.

    Cheers,

    Dan
     
  4. archangelsupreme

    archangelsupreme Well-Known Member

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    Thanks Sim,

    Though If i'm travelling to Australia, should I get AUD or USD$.....it suggests AUD for all other countries....but Hong Kong is pegged against the US Dollar, and with the rates at the momment, wouldn't I be better off with USD$???

    The thing charges AUD$3.75 per withdrawal from an ATM, isn't this expensive....are u sure there's no better option. Also, when I withdraw from an ATM say in Hong Kong, will it charge me a exchange conversion fee because surely the ATM can't spit out AUD$ but only HKD$.
     
  5. FrankGrimes

    FrankGrimes Well-Known Member

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    Interesting Sim - Thanks. Also interested if there is a credit card that doesn't charge for the foreign exchange.. I never used ATMs only my credit card but the transaction fees add up
     
  6. vandalic

    vandalic Active Member

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    I've been to South East Asia and used Credit/Debit cards and a Travelex card. I'd recommend going the Travelex option as the fees on my credit/debit cards were like $5 a transaction and was hit with exchange rate differences.

    With a Travelex card you can buy in those currencies (i.e. Baht and HK Dollar) and you don't get hit with exchange rate feeds from memory as you pay when you transfer to them. It is also much safer to use Travelex, because if your card is lost/stolen Travelex can give you emergency funds, they also work in most places.
     
  7. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Every time you convert money, you lose - the people doing the converting will take a slice of the action - whether it is via arbitrage (difference between buy and sell price) or via a conversion fee (or both!).

    You also need to watch out for "cross rates" ... this is where your transaction is converted via a secondary currency (usually USD). Not all currency exchanges will convert directly to/from AUD - sometimes they will change into USD first and then change to the other currency ... and you get hammered on both sets of conversion fees. Always best to minimise the number of times you convert money.

    Unless the currency was fluctuating against the AUD wildly and I wanted a bit more certainty with my exchange rates ... I would generally aim to convert only once - directly from AUD to the destination currency.

    If you get a USD Travelex card, you pay conversion fees when you transfer money onto the card from your AUD account, and then you pay conversion fees again when you convert from USD to the destination currency. Better to only convert once - transfer AUD onto the card denominated in AUD, and then only convert when actually withdrawing cash.

    The only time I would suggest using the USD, GBP or Euro cards is when you can actually withdraw that currency from the ATM (eg in the US, UK or Europe).

    Note that if you will need to convert cash and the foreign exchange places in the country you are in will only convert via a cross rate, it may be better to pre-convert in Australia into USD so that you are only converting USD to local currency when actually travelling. In most developed countries it is easy enough to find ATMs that will work - so I haven't needed to carry cash to be converted for quite some time.

    I had no problem getting cash at an ATM in Singapore, Hong Kong, Thailand or Malaysia (large shopping malls are a good place to look) ... India I had to hunt around a bit (we were in the middle of nowhere). China (Beijing) I had trouble using the ATM in the hotel - but found an ATM in the office building next door that worked, but had no trouble at all in Shanghai or Shenzhen, South Korea can be problematic - but "foreign ATMs" are much more common now than previously.

    Most ATM cards will charge you a MINIMUM of $5 to withdraw from a foreign ATM. The exception is Australian banks in NZ (some don't charge a fee), and some international banks if you have an Australian account with them (I don't know who does this - you'd need to check). $3.75 for the Travelex card is quite cheap for foreign ATM fees.

    Note that NAB have a new bank account which offers zero withdraw fees for foreign ATMs ... but there is a high monthly account fee (which can be avoided if you deposit your salary directly into the account and you earn enough money).

    Yes, you will get conversion fees (either directly, or hidden in the exchange rate) ... the ATM will spit out local currency.

    I'm travelling around South America soon - I'll be carrying an AUD Travelex card with cash pre-deposited into it, plus an Amex card for general purchases (easily tracked and replaced OS if problems arise), plus a VISA card as backup (for places which don't accept Amex), plus my regular NAB ATM card (for emergency cash only), plus a couple hundred USD in cash as backup (hidden).

    I don't have any direct-debit transactions on my Amex or VISA cards, so if there is a problem and I have to cancel the card - it won't mess up any regular bill payments while I'm gone. (This has happened to me before - fraudulent charges were discovered on my Amex card the day I left for a four week work trip to Singapore! Amex re-issued the card to me without problem while I was still in Singapore)
     
  8. archangelsupreme

    archangelsupreme Well-Known Member

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    Is anyone with BankWest's Zero MasterCard

    It charges no annual fees, 14.99% and 55 days interest free.

    Though it has a pretty average rating on ratecity.com.au

    I'm thinking now that i'll just take out a no annual fees card, and pay within the 55 days. That means i won't need to pay any fees or interest. Are there any complications with closing an account within the 55 day period?
     
  9. Davidr

    Davidr Active Member

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    A good place to start research for this sort of thing is: INFOCHOICE | Banking | Credit Cards

    As you can see they compare all sorts of products.

    Cheers,
    David
     
  10. archangelsupreme

    archangelsupreme Well-Known Member

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    I'm starting to think that I should got for a Virgin Credit Card. It think it offers a nice balance of no annual fees, rewards and competitive interest rate (not that it will matter because I will definately pay within the 55 day allowance).

    Oh one, think I don't get it when they say if you do a cash advance, you will not get the 55 day allowance or something? what does that mean. Does it mean that if i make a cash withdrawal from an ATM (i.e. Visa network), i will be charged interest on that straight away and won't have 55 days to pay?
     
  11. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Yes, it means exactly that.
     
  12. archangelsupreme

    archangelsupreme Well-Known Member

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    Oh that's lame-o.

    Looks like that is only good for over the counter purchases then, not ATM withdrawals...how depressing.
     
  13. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    To get cash, you either need a credit card linked to your savings or cheque account so you can use either credit or eftpos/ATM, or else look at getting a VISA debit card (which is a VISA card without a credit facility - the money comes straight out of your savings account) ... good for both over the counter transactions and for eftpos/ATM access - easier to apply for too, since you are not applying for credit (just need to make sure you only spend what you have in your account).
     
  14. Bantam Roosta

    Bantam Roosta Well-Known Member

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    Another thing to take into consideration with credit cards is what Sim touched on about fraudulent purchases causing a cancellation of your card,

    Commonwealth Bank cancelled our credit card when we got back to Australia, purely because we had been in Singapore. There hadn't been any fraudulent charges made, they just said it's a precaution. Caught us out as it was our main credit card for direct debits etc.

    BR
     
  15. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Always contact your bank before you go and get them to make a note on your account about being overseas - when you are leaving and when you are returning.
     
  16. AsxBroker

    AsxBroker Well-Known Member

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    That's a bit over the top. I'm sure a few CBA employees pop in to Singapore on holidays or work and I bet they don't cancel their cards!

    The cheek!
     
  17. naz

    naz Member

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    I definitely suggest you get a Wizard Clear Advantage MasterCard – I went overseas recently and they were by far the best - they don't add an additional percentage onto foreign exchange like most of the other cards (although they do have to pass on the MasterCard charge which is transparently built into the exchange rate). According to http://www.wizard.com.au/clearadvantage/clearadvantagecard/ other cards change 2-2.5%. This also makes it really good for online purchase from overseas.

    The credit card has no annual fee and have up to 55 days interest free which works the same way as was described above. The best thing about them though in my opinion is that you can withdraw through any ATM in the world (that takes Mastercard which is essentially all of them) without any ATM fees. I did this constantly when I was overseas – for instance in Bangkok there is an ATM on every corner. I would withdraw money almost every day which was nice because it meant I only ever carried around <$100 so didn’t have to worry about losing it all. Of course if you do this they will definitely start charging you interest immediately. I got around this transferring some money to my credit card before leaving (this means you’ll be losing the interest on this money – because the credit card company won’t pay you any interest on cash you deposit, however if it’s just for a short time usually the benefits far outweigh the costs). Of course in this case the 55 days in also essentially useless (but it’ll still be good when you come back for online purchases etc).

    When I applied for my credit card I didn’t have a credit rating. I gave them a copy of my latest pay slip. They gave me the card but only gave me a $500 credit limit – in my case that didn’t matter since I was loading it up with cash before I went anyway. Since then they’ve sent me a letter every few months asking if I want my credit limit higher.

    There was one other product that was listed on a frequent flyer forum I read that was good for travelers – it was a Citibank ReadyCredit. I’m not sure if it’s still good but when I applied for one they rejected me :(

    Good luck and have fun.
     
  18. archangelsupreme

    archangelsupreme Well-Known Member

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    Fellas,

    I think i'm not going to apply a credit card for this trip.

    I'm just going to go with NAB Gold Banking and get the Visa Debit Card which comes part of it. With NAB Gold Banking, you don't get charged any withdrawal fees when overseas and using some other institutions ATM.

    Also it's good in a way because I have to control my spending and can't spend more than what I have in the bank account.
     
  19. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Just an update - I've done some more research on the Travelex card ... and it is very expensive to use this card in a currency other than that which you have loaded on to the card.

    For example - if you buy a USD card and use it to withdraw USD from an ATM in the US (or another country which uses USD as its local currency - there are a couple) ... then you won't be charged any additional fees or currency conversion to make the withdrawal - which is good. Similarly if you withdraw AUD from and AUD card - no additional fees beyond the flat ATM withdrawal fee.

    However ... if you take that same USD card and go to anywhere else (eg Canada) and withdraw local currency, you not only lose out by converting currency twice (first from AUD to USD when you load it and then from USD to CAD when you withdraw), but Travelex also add a 5.95% currency margin to the wholesale exchange rate ... most other companies only add up to 2% margin - so to withdraw in currencies other than the currency you loaded onto the card, you are paying effectively three times more in hidden currency conversion fees by using Travelex.

    In other words, the Travelex cards are only good for use in the currency you purchase them in (eg only withdraw USD with a USD card, Euro with a Euro card, AUD with an AUD card, etc).

    Accounts like the NAB account mentioned are good (if you can minimise the monthly fees) ... but these other travel ATM cards are are a good choice if you are looking for some redundancy or backups in case there is a problem with your ATM card (eg the ATM swallows it).