Bank Charges when traveling to Australia 2
So what do the banks screw you out of on top of the odd company trying to get you to pay extra for no reason?
Well, it felt like we needed to Phd in something-or-other to understand the charge structure and whether we were better off getting cash out or paying on a credit card. So here is the fee structure from ASB
Cash Withdrawals Overseas:
$5.00 charge each time.
And then there’s this little gem – which applies to both Cash Withdrawals and Credit card transactions.
Offshore services margin
All cash withdrawals made at an overseas ATM using your ASB ATM or EFTPOS card will either first be converted into US dollars and then into New Zealand dollars or converted directly from the currency in which the cash withdrawal was made into New Zealand dollars at the applicable conversion rate.
Offshore service margins of 1.1% are added to the converted New Zealand dollar amount of each cash withdrawal made using your ASB ATM or EFTPOS card at an overseas ATM, excluding those withdrawals made using Commonwealth Bank of Australia ATMs.
The offshore service margins comprise a Visa international service assessment of 0.85% imposed on ASB by Visa and passed on to you, and an ASB margin of 0.25%.
The converted amount and the offshore service margins will appear on your statement.
For overseas cash withdrawals made using Commonwealth Bank of Australia ATMs an ASB retail exchange margin of 0.7% is included in the conversion rate by ASB. The total converted amount (including the ASB retail exchange margin where applicable) will appear on your statement.
What the bleeding hell does that mean?
Well in short – it means they are going to make a profit out of the conversion from NZD to the foreign currency. The problem is that some profit is already loaded into the exchange rate, so this is on TOP of that profit.
But the real dastardly bit is the part where they say they will either convert straight from NZD to the foreign currency if you withdraw cash – or they will bounce it via USD first. Now why are they doing that?
Basically, because they can skim some more money off the transaction by effectively trading currency at your expense if there is a wide variation in the currencies. Like the Holiday Inn and its 1.5% surcharge: in itself its small amounts, but added together with all the transactions occurring – its gotta add up. I wish I knew how it all worked - but like much in banking its all shrouded in mystery and complicated mathematics – so we as the consumer cant really ever check things like this. Which is annoying and quite frankly wrong. What are the banks hiding?
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Related posts:
- Bank Charges when traveling to Australia.
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- Avalon’s Money Thread: Banks and Bank Charges.
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