HKD$ Visa/MC
 

Am I able to get a Visa or Mastercard that is based in Hong Kong Dollars?

I am a US resdient and would like to use my US address and contact for the billings and such, but my son will be travelling in HKG for about 6 months and I want to get him a HKD Visa or Mastercard, preferably via Citibank, or HSBC, or any of the other big banks in the US, Fleet is OK too, or must I apply via a HKG bank (but I would be an international resident). Do any of you do this for countries you travel to. As I am sure we all know using a USD card in the UK, for example, we get charged using a bad exchange rate, and then a fee to do the exchange on top of that. I want to avoid that.

Thanks for any insight.

I don't have a direct answer, but I do have a question: Assuming you were able to get such an arrangement set up, you'd be receiving a bill at your US address that was payable in Hong Kong dollars. How do you plan to pay the bill?

I was going to add that to my original post, but I thought it would be to much in one post.

Obviously I would pay in HKD from a HKD bank account, either an account in HKD that is a US address, but also accessible in HKG, like Citibank or HSBC (where the address and contact info is US, but vaule is HKD (converted from USD deposit)), or a USD bank account here in the US where I can "cut checks" in HKD or make a conversion using the days WSJ rate....does that make sense, I think it is right, and doable.

Try contacting HSBC, Citibank, etc. in Hong Kong.

Citi in particular has a very good system set up for transfers between Citi accounts in multiple countries. This can be fee free, though that may depend on the specific account package, and it is relatively fast (a few business days). Then there is the problem of passing a local credit check, etc. It is probably a great deal of hassle. Also, do you want to call HK when the card is lost/stolen, used fraudulently, etc.?

If it is only for 6 months, it might be easier just to issue your son with the a credit card that charges the lowest possible foreign exchange fee billed in US$ (probably one issued by MBNA). If linked to a card in your name, you could even earn points or cashback on the charges, partially offsetting the currency exchange fees. Even assuming a 2% exchange surcharge (1% Visa/MC + 1% issuing bank), it would take approximately $5,000 in charges to equal the cost of 2 international wire transfers, based on estimated $25 each outbound and inbound fees on each such transfer.

Based on my understanding, credit cards, ATM cards and wire transfers all generally use the same interbank exchange rate as a base. The eact timing of the calculation and any surcharges applied by the transacting bank may affect the results, but in general these are the best rates an individual retail customer can get by any means. I generally find that the rates I get on my credit cards when outside the issuing country are very good even after accounting for fees--definitely far better than cash.



[This message has been edited by chalf (edited Mar 19, 2004).]

Unless you already have assets in HKD, you're at some point going to need to convert your USD to HKD, whether that be at the point you write the check from a USD checking account to pay the bill, or the point you deposit your USD into a HKD checking account. Someone at some point is going to want to charge you for this service.

Cost aside, I think the most direct way to handle this the way you want to would be to open a Hong Kong-based checking and credit card account and specify a US mailing address, rather than trying to set up anything here. US banks are notorious for not handling international issues very well or at a reasonable price, as they are very specialized services that don't get used very often by the general public (unlike in other countries, where dealing with foreign currency is almost an every-day task sometimes).

But I think that chalf's suggestion of just getting a low-cost US-based MasterCard/Visa is the best solution for this problem. If you can get one where the bank adds no exchange fee, you'll end up paying only the 1% fee that's built into the Visa/MasterCard exchange system. That, and having local numbers to call, fee-free payments, and 37-cent postage that gets to the payment center in at most 3 days will I think provide you with the lowest-cost solution to this problem.

Also, since the Hong Kong dollar is pegged to the US dollar at a virtually fixed exchange rate that hasn't changed in over 20 years, you're in the unique situation of not really having any exchange rate fluctuation risk that you'd have with any other two currencies.

You get a gold star for thinking creatively about this situation, though! http://www.flyertalk.com/forum/smile.gif

[This message has been edited by Steve M (edited Mar 20, 2004).]