Personal Finance & Money Asked by Joe.E on November 15, 2020
Going to Japan in about a week, and I’m looking for ways to buy Japanese yen.
In Australia, it’s pretty nuts. If you exchange money from them, they’ll charge you 5-6% above the mid rate of the currency
If you take it from an ATM whilst you’re there, they’ll take an additional 2.5% plus $5 for every ATM transaction! That ends up being 8-9% of your trip cost in bank fees.
Even the travel cards charge 5% over the mid rate of the currency.
Is this just Australia? Is there any way around this?
Have you tried calling a Forex broker and asking them if you can take delivery on currency? Their spreads are likely to be much lower than banks/ATMs.
Answered by user1731 on November 15, 2020
Unless you need extremely large sums of money, I suggest you use an ATM or look for a credit card that has no foreign transaction fees (rare).
AFAIK, it's not possible for a retail buyer to purchase currency at the current exchange rate quoted online. You are always going to be paying some spread above that, and the ATM gets you the closest.
You could also try to use a bank that has branches in your country and Japan (like HSBC) and do your banking there. Then you likely wouldn't have to pay as much in fees (and possibly could draw on your account in Japan).
Answered by Michael Pryor on November 15, 2020
You don't. When you get to Japan, use your ATM card to withdraw local currency. My bank (ETrade) doesn't charge me int'l fees.
Answered by Maverick on November 15, 2020
When I went on vacation to London a few years ago, I looked around at banks with ATM deals with UK banks. I found that B of A had a deal with a UK bank that you could use their ATMs to take out money from your US account for practically no fees. So the week or so before I left, I opened an account at B of A, put a bunch of money in it, and used the B of A debit card during my trip as much as possible.
Answered by chrisfs on November 15, 2020
Check whether you're being charged a "Cash advance" fee with your withdrawals, because it's being withdrawn from your credit card account.
If that's happening to you, then having a positive balance on your credit card account will dramatically reduce the fees. Quoting from my answer to a similar question on Travel Stack Exchange:
It turns out that even though "Cash advance fee - ATM" has "ATM" in it, it doesn't mean that it's being charged by the ATM you're withdrawing from. It's still being charged by the bank of your home country.
And depending on your bank, that fee can be minimized by having a positive balance in your credit card account. This isn't just for cards specially marketed at globehoppers and globeshoppers (mentioned in an answer to a similar question), but even for ordinary credit cards:
An administrative charge of 2% of the value of the transaction will apply to each cash advance made on your card account, where your account has a negative (debit) balance after the transaction has been posted to it. A minimum charge of $2.50 and a maximum charge of $150 will apply in these circumstances. Where your account has a positive (credit) balance after the transaction has been posted to it, a charge of $2.50 will apply to the transaction. Any such charge will appear on your credit card statement directly below the relevant cash advance.
A $2.50 charge if your account is positive, versus $20 if the account is negative? That's a bit of a difference!
Answered by Andrew Grimm on November 15, 2020
I already commented the best existing answers, however let me note a couple of other things. Some of my friends in the past have wanted to do one of the following:
Answered by Noah on November 15, 2020
Personally, my solution for this is to use a Transferwise borderless account and debit card (available since 2018). Although not free, rather than adding a load/spread on top of the mid-market rate, they quote the live mid-market rate and then add an explicit fee, which is usually much smaller than the banks. For example, if you were to add 1000 AUD to a Transferwise account and then convert them to JPY, you would pay a fee of 10.32 AUD and get 75,247 JPY at an exchange rate of 76.0319 JPY/AUD, which is the current live mid-market rate. You can then use the debit card associated with your account to take out cash (without extra fees within relatively small limits) or pay within in Japan (without extra fees).
I have personally used such a card for USD, GBP, EUR, SEK, NOK, CHF, and RUB, and it works well for me. You might be cheaper off only with a bank card that truly charges no foreign exchange fee and does not add a load/spread on the mid-market rate, but those may be hard to find (see Is there such a thing as a credit card with no (currency exchange) fees?).
Answered by gerrit on November 15, 2020
An option for you to look at for potentially free (or much cheaper) ways to buy yens is Revolut, that recently launched in Australia.
You can withdraw money at an ATM in local currency using your account for free or at much lower fees than the ones you quoted depending on the account type you opt for. You can also pay using your card and be charged just the intrabank rate of exchange without fees at all. Given Japan is primarily a cash-centric society, it would make sense to have some yens in hand, but overall you should still be able to use your card in most transactions and benefit of the no-fee exchange rates.
That and Transferwise that @gerrit mentioned are most likely the most cost-effective solutions for what you want.
Answered by Leon on November 15, 2020
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