How to be forex savvy on the roadComment on this story
Johannesburg - With the rand currently about as unpredictable as Agang policies, many South Africans travelling abroad get themselves burned by fluctuating exchange rates. But they could minimise their pain.
According to Craig MacFarlane of Bidvest Bank, travellers “generally buy forex at the last minute”.
This is despite the fact that the South African Reserve Bank will allow you to buy up to 60 days before you travel – so you can buy early if the rates are favourable for you.
Another common failing, says MacFarlane, is that people buy US dollars, pounds and euros, and then exchange them in the country they are travelling to, rather than taking a destination currency.
“For example: take Thai baht to Thailand, not US dollars, as you will lose on the rates and commissions in Bangkok!”
As for traveller’s cheques, MacFarlane’s opinion is that “if they’re not quite dead yet, then they’re on life support with the end in sight!”
He says it is getting harder to cash cheques, especially cross-currency cheques.
“In Euro-land now, most banks are charging between 5 and 10 percent to change euro traveller’s cheques into euro cash. Most places will also want a photo ID to cash traveller’s cheques, and then sometimes they also limit how much you can cash with them.”
MacFarlane says the Bidvest World Currency Card (which is similar to a number of products offered by local banks) helps travellers mitigate the threat posed to their wallets by a plunging currency and by commission fees once abroad.
With the card – which is loaded with money before departure from South Africa (at the rate obtaining at the time) – point-of-sale transactions are free.
Only the ATM fee is set in the local currency. But it is a flat fee per withdrawal.
Because it is a pre-paid card and currency is loaded beforehand, there is no charge when you use it in a shop. The balance on the card simply drops. You will get an SMS confirming the transaction and also giving you the available balance on the card.
Another benefit is that there is no “cross-currency fee” when using a card in the currency of that country; the set ATM fees are also much lower than they would be if you used your South African bank card.
The cards are pin and signature protected and Bidvest will be bringing out chip and pin protection later this year, says MacFarlane.
“You get a second card free, so if you lose or misplace one you have another as back-up with you. All our cards have Visa Platinum protection, which gives assistance and purchase protection and extended warranty on goods bought.”
There is also a “24/7/365 call centre” to call if there is a problem.
MacFarlane says he has personally used the World Currency Card on overseas trips and found it to be effective. However, travellers may also wish to take a credit card as back-up or for transactions such as car hire or hotel deposits, when a hold is put on the credit card and reversed later.
According to Visa and MasterCard, prepaid travel cards are the fastest-growing form of travel money in the world. So great is demand that the Bidvest product, which started off with four currencies, now has 18.
“Another added benefit is that the cards are reloadable, so for your next trip you just pop in and reload.
“Cards are also valid for five years. If you’re stuck overseas or extend your travels, then we can also just reload from here. It takes about five minutes to load the card.”
The cards are also useful for school tours. “Parents can give their kids a budget but if they do need more money we can top up immediately. This is a useful safety net for youngsters travelling.”
On the issue of travelling with cash, MacFarlane advises: “Always try and take a bit of destination currency so you have cash when you land; although one of the benefits of our cards is that there is always an ATM at the airport so if need be you can draw cash quickly…”
He adds: “If you are in a really exotic country and can’t get the local currency before you arrive, then US dollars are probably the most easily exchanged – but have smaller notes so you don’t have to change more than you need to.”
In some countries, euros and pounds are also easily exchanged.
He says it’s also useful to have US$1 notes handy to give as tips if necessary.
He cautions: “When coming home, not all exotic currencies can be changed back to rand (we do however buy in about 80 different currencies), so avoid bringing large amounts back with you.” - Saturday Star