Exec_Plat

I have a month vacation coming up in Oz.

I was thinking of setting up a bank account, transferring say US$15-20k into it and then using debit/EFTPOS for many of the purchases (hotel stays, car rental, etc)

- The exchange rate is pretty good now so I lock that in (yes it might get better, or might not)

- I get a single transaction fee/cost (the wire transfer from my US acct to Oz.) Plus probably not paying the retail rate CC companies might charge.

- I avoid the ATM fees I would pay on both ends for cash withdrawals.

- Many institutions in Oz charge 2.5%+ for credit card transactions, so I can avoid that (I think) with a 'bank transfer' at check out.

In doing research, here and elsewhere, it seems a pretty easy process- can be done in advance; just show up at the bank on day of arrival to show passport/activate account, etc. One issue is how long to get the debit card? Would like a bank that can have that waiting on day of arrival. (or with 4 days as thats how long Im in Sydney.)


Any feedback?

Which bank? Commonwealth, NAB, ANZ, Westpak seem like the big 4.

Thx

kcupp95

It seems like a lot of effort for one month.

Yes you can open a bank account before arrival, however that is for people that are moving to Australia and will have a permanent Australian address after arrival - not people coming on holiday for a month.

MSPeconomist

1. In many countries, it's not easy/possible to open a bank account as a foreigner until you have a residency permit or similar legal status.

2. Especially as a new account owner, it can take time for an international money transfer to be credited to your account so that the money can be used.

3. Unless you have a local job and local credit history, it can be very difficult to get a check guarantee card or similar item to enable you to pay using the account or even to withdraw money from the account, for example using an ATM.

4. Paying by some sort of check, debit, or direct transfer generally carries far fewer consumer protections than are provided to those who pay with a USA credit card.

5. Transfers in excess of $10,000 must be reported to the federal government.

6. Foreign banks similarly may ask you to document the source of the money that you are transferring into their country.

7. Foreign banking systems and their rules can be surprisingly different from those to which you are accustomed at home. Do you really want to spend time learning about this for a one month vacation?

glazfolk

Don't know if this helps, but I have a CitiBank account (Australian) that I can use in NZ (which I go to frequently) seamlessly as if it were a NZ account, using Westpac ATMs. Eg, no ATM fees.

I don't know if a US CitiBank account would let you do the same thing when in Oz but might be worth investigating ...

CPMaverick

I don't think you can do this easily. You will need proof of an Australian address at a minimum, and you will have to open the account in person.

The only exception I am aware of is if you have a Australian work visa or permanent residency visa, then you can open an account while overseas. Then you could transfer funds in, but you still can't transfer out until you activate in person in Australia.

I am 100% sure with Westpac you cannot receive a debit card until you register proof of Australian address, even if you have a checking account.

ksharpe

       

number_6

It is possible to do but you'd save about 1% so for $20k that is $200 ... not really worth the effort given that exchange rate is more likely to move in your favour than not. Several Australian banks have offices in the US, for example ANZ is in Manhattan -- not helpful to you in California. But this is FT, so a mileage run to NYC to open an account with ANZ is one option. There are probably Westpac offices in Los Angeles but I haven't checked. Otherwise Citibank has some great products, but requires large dollar commitment (6+ figures). If you qualify that would be the best choice.

Exec_Plat

Thanks for the inputs. I will still check this out to see if the mechanics work.

Unfortunately my primary bank and brokerages do NOT have Australian offices, I am not going to mover 250k to HSBC or or Citi just for this...

One remaining question (which seems to contravene what ksharp posted)- Ive seen that most hotels will tack on a 2.5% to 3.5% charge if paying by credit card. If I did an Australian bank debit, this is avoided. Is this correct? Or have they really stopped but still have that in their fine print?

And finally, at the end of the day, I'll probably not do it. Just not that material. But as with all the FT things we obsess about, this is just one more.

Jorgen

I don't think most Australian hotels add a 2.5-3.5% surcharge. I don't recall having seen this recently, at least not for Visa/Mastercard (sometimes for Amex).

You can always book through hotels.com or similar, which should also avoid any such fee.

wallaby

If you have a Bank of America account you can use Westpac ATMs
in Australia fee-free.

kirkwoodj

Seems completely unnecessary. Also note above warnings about transferring >$10K.

Copied & pasted: "Credit Card payments relating to Australian hotels incur a merchant service fee of 1.5% in addition to the total amount payable."

Indeed.

Exec_Plat

I was going to let that nonsense pass, but now with this repetition...


Do tell.

Besides having to report the transaction, what "warnings" would folks be referring to?

I transfer over $10k regularly for business, the process is handled by the institution doing the transferring....

So what is the issue?

bruceba

Google FBAR. This is a big issue

Exec_Plat

Thanks. I feel like an idiot but my CPA told me I already file a FinCEN114. They did it automatically. Duh.

Even if you transfer under 10k, you get bit once the aggregate in all accounts passes USD10k. Actually once you have a offshore accounts that total over the threshold you report each year even if there are no transfers.

(Apologies for the nonsense comment too.)

kirkwoodj

Good luck. Enjoy your trip to my homeland.