The Bad
So the first time I went overseas I got ripped off. Not by some scammer or felon taking advantage of naive tourists, but by my own bank back in Aus.
I booked my trip through studentflights (another story) and they offered me a travel card called Cash Passport, touting the ease-of use and 'flexibility' to use with Euros, USD etc. Being a combination of travel newb/lazy I skipped the fine print I signed up.
The first warning sign probably should've been the fee I got for simply transferring money into the cash passport itself: a 7% commission fee for the 'service' of them exchanging currency. Basically transfer a thousand bucks of hard earned slavings onto your shiny new travel card and the the bank will cream $70 off the top as well as $5 as a 're-load commission'.. in addition to a 1% bpay fee. And we're up to $85 for a rudimentary online transfer - and remember this is every time you top it up.
But the chances are, if your anything like I was, you won't notice all this because the US dollars will simply show up in your account and you'll be like "all sweet it worked" - and that's what they're banking on I guess.
It doesn't really get much better once you get to your destination. ATM fees are AUD $3.50 (and this is on top of any 3rd party ATM provider fees) for any amount, so 20 USD out easily becomes $25+. And if you're ever in a stitch up and need cash-out they'll charge a $10 fee, which I reckon would be borderline illegal back in Aus. When you finally do make it back home, to get any remaining funds out (if there's anything left) from an ATM it's a 3% fee for every transaction OR you can try transfer out and back to your native bank, and they'll charge you the 7% (+$5 + 1%) over again.
I looked into it and Cash Passport whoever they are, seem to be some sort of trifecta between Mastercard, travelex, and Australia's largest mutual bank you've probably never heard of
Who just out of interest (pun intended) according to wikipedia 10 years ago topped $9 billion in assets.
So before my next trip I made sure I actually did some research (i.e. use google). I wasn't really surprised to see Cash Passport has one of the lowest scores on Product Review: https://www.productreview.com.au/p/travelex-cash-passport.html But the competition wasn't much better either [8], and still in want of a decent travel card - here's the gist of my findings:
NAB
Being with NAB for most of my life, I went online to check out what they had on offer for travelers. Overall pretty disappointing. Like Cash Passport, when transferring into the account, If you don't convert your currency yourself before using it you will be subject to a 'NAB Foreign Currency Conversion fee' of 4%. And even if you have the time (and energy) to do this, you'll still be charged commission anyway (for the privilege of being able to get your money exchanged). In other words they'll apply their 'NAB Currency to Currency foreign exchange rate' - an undisclosed figure I tried to get it off them on the phone but he didn't know/wasn't allowed to tell me. There is a PDF I downloaded and a key part of the small print reads: "A foreign Currency rate set by NAB where any Currency is converted into another Currency plus a margin determined by NAB" [1]. Based on productreviews it could be anywhere from an extra 5-10% on top of the local rate [2]. I think the 160 odd reviews on there speaks for themselves [2]:
ANZ
OK. The Currency Conversion Fee (commission) is a bit lower at 3% (+ 1.1% fee for any reload + BPay fee of $1.1). Annoying that it's 11 bucks to sign up and they charge the usual $3.50 ATM fee and that very time your make a transaction.. they'll also send you an SMS code every time for security purposes which you'll be charged 35 cents for and may not be able to receive unless you've switched to an overseas phone plan. Similar low score in the reviews
In fact these kinds of reviews, exposing exuberant exchange rates, fees and generally poor customer services, were a pretty much a common theme among all travel cards offered by the Big Aussie banks. So thanks to the advice of some helpful strangers on the internet [3], it made sense to skip the lot of them (tail between legs) continue my search elsewhere. This meant looking at some of the cards on offer by the big multinationals.. I was able to find a couple of great options..
The Good
Citibank Plus
I don't like this company (GFC bail outs etc) but frankly they make the best card (i.e. they don't try to sneak commission off you) and there's no fees, zero, zip nada. In fact the it's that straight forward you could pretty much stop reading and sign up now if you wanted: https://www1.citibank.com.au/banking/bank-accounts/citibank-plus
Just to make it clear:
- No sign up fee - VERY easy and quick sign up process! - they'll have it to you in a matter of weeks
- No ATM fees (unless some 3rd party vendor charges one) - you can check the comprehensive list of fee-free ATMs here: https://whirlpool.net.au/wiki/citibank_plus_transaction_account)
- No currency exchange fees - Base rate only: whatever exchange rates going, punch in to google at that time - that's the rate that will be applied to your purchase!
- No transfer fees - just transfer AUD from your bank into your new citibank plus account, and that's it.
To summarise: the only money you'll spend using this card will be the items you purchase! (And this is how it should be right?)
A couple of tips:
- Watch out for skimming devices attached to ATMs:
These are essentially plastic transmitting devices scammers have put onto ATMs, to read your card, copy or 'skim' the information off it and steal your money [4]. If there's anything sus stuck to the machine, or anything loose - don't use it. - Since the Citibank Plus is a debit card, with real cash moneys: don't put too much money in, and keep track of your withdraw limit essentially don't do what I did last trip..
One day I had to get alot of money out, so I had to up the ATM withdrawal limit. The only problem I forget to drop it back down again, and the next few days I ended up using an ATM that had a skimming device in it. What this means is someone was able to wirelessly connect their laptop to the skimming device in the ATM, copy the information encrypted on my card, transfer it to, in my case New Dehli, where the information was likely coppied onto a new card which was then finally used to make a whole bunch of withdrawals, in Indian rupees, taking advantage of my large withdrawal limit until all my money was gone. Kudos to Citi I was pretty lucky that they were able to reimburse me within a few weeks of reporting it.
So whether you lose a card, get scammed or have some technical issue, it's always a good idea when travelling to have a second card, and thanks to more advice from the experts [5], I had a backup:
28 Degrees
Just like the Citibank Plus except for 2 things: a. it's a credit card, and b. there are ATM fees (about $4 per transaction)
Being a credit card, signing up is initially a bit more of a drawn out process (https://www.28degreescard.com.au/apply/) but you get good buyer protection on any fraud/insurance issues before you have to pay it off at the end of the month. Their customer service is also top notch and you can avoid trying to call Australia and get them on skype anytime https://www.28degreescard.com.au/contact-us/.
So basically I use the 28 Degrees for purchases at restaurants shops etc, but for fee-less cash out - use your Citibank Plus.
The Ugly
This brings me onto a final topic I'd like to touch on, Australian banks and how bad are they really?
So I did a bit of research into how Australian banks stack up globally, specifically in terms of their products on offer to travellers.. and my concerns mostly about the state of banking in this country were pretty much confirmed:
- Research by financial analysts based in the UK found the Australian banking sector as a whole lagging behind both British and US banks scoring just 2.5 out of 5 [6] based on qualitative and quantitative indexes with "all of the "big four" banks [scoring] zero rating for culture and digital dependability"[7].
- According to research conducted by the World Bank, Australia is the 3rd most expensive G20 country to transfer money [11]: "The cost of sending money from Australia was approximately 11 per cent higher than the G20 average, 13 per cent higher than the UK and almost 40 per cent higher than the US." -ACCC 2018 [12]
- Australian banks are the most profitable in the world [10], at 2.9% of GDP [9] (and since we all know money doesn't grow on trees they must be getting it from somewhere)
Thankfully the ACCC is in the process of conducting an inquiry into the excessive foreign exchange fees imposed on the Australian public [12]
The treasurer, Josh Frydenberg, said millions of Australians were paying too much to the banks and shelling out $2bn a year in foreign transaction fees.
“We want to stop the rip-off,” Frydenberg said in Sydney. The ACCC will also look at charges for transferring money overseas and on prepaid travel cards. A customer of an Australian bank who travels overseas and spends $5,000 on their credit card incurs about $140 in foreign exchange transaction fees. If a customer was to transfer $1,000 overseas, it would cost an Australian on average about $80 in fees and exchange rate mark-ups, compared with about $60 for someone in the United States." -[excerpt from the Guardian titled 'Excessive foreign currency fees under scrutiny from Australian consumer watchdog' [11]]
[1] http://www.nab.com.au/content/dam/nabrwd/personal/planning-tools/travel/nab-traveller-card/documents/nab-traveller-card-pds.pdf
[2] http://www.productreview.com.au/p/nab-traveller-card.html
[3] https://forums.whirlpool.net.au/archive/1725541#
[4] https://www.forbes.com/sites/johnnyjet/2018/01/30/6-tips-to-help-avoid-card-skimming-at-atms-while-traveling/#21e07d492992
[5] https://whirlpool.net.au/wiki/28_Degrees
[6] https://www.afr.com/business/banking-and-finance/big-four-banks-get-shameful-lafferty-global-report-card-20181018-h16sc8
[7] https://abix.com.au/2018/10/19/fluff-and-fail-shameful-report-card-for-banks/
[8] https://www.choice.com.au/money/banking/foreign-transactions/articles/foreign-transaction-fees
[9]https://www.news.com.au/finance/economy/australian-economy/australian-banks-top-global-list-as-labor-persists-in-demands-for-a-royal-commission/news-story/aefa72c371555ced47804f9604c25c7c
[10] https://www.afr.com/business/banking-and-finance/australia-s-banks-the-world-s-most-profitable-20140630-j05p8
[11] https://www.theguardian.com/australia-news/2018/oct/02/excessive-foreign-currency-fees-scrutiny-accc
[12] https://www.accc.gov.au/media-release/accc-commences-inquiry-into-foreign-exchange