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OzForex Travel Card Review - BEWARE Rip Off Rates

Brisbane, Australia
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OzForex Travel Card Review - BEWARE Rip Off Rates

I am taking an overseas trip shortly and I applied for an Ozforex travel pre-paid master card. The website claims to show that their rates are excellent and also has a section to check the conversion rates. “Before I applied for the card” I checked their foreign exchange rates and I found it to be very good. This was done on their home page, a section called “currency converter”.

So I applied for the Ozforex travel pre-paid master card. It took 7 business days to arrive by postal mail. I transferred about $1600 AU dollars to the card so that I can convert that to US Dollars for my trip. On 27 April 2012 when I logged into their website to convert Aussie dollar to US Dollar I was shocked to see the difference in the rates that are shown on their website to lure customers and also the rates that they actually provide “after you transfer money” to the pre-paid credit card.

The rate on 27 April 2012, for $1500 AUD to be converted to US Dollars was $1554.29. The rates that I got “after” I transferred money to the pre-paid credit card was US Dollars 1493.41

A difference of $60.88 (How insane is this!). There is nowhere on the website that tells that the exchange rates provided for the pre-paid credit card are different to the rates shown on their website. Moreover, you can only find out the actual rates when you transfer the money to the pre-paid credit card and when you want to convert that to the foreign currency.

If they had provided a section on the website saying “Currency conversion rates for pre-paid travel credit card” then I would not have applied for this card.

So travelers BEWARE. Other than losing your money, you are gaining nothing from this card. When you lure customers by showing incorrect exchange rates on the website, this is what I call as a dishonest business.

The Golden Lesson learned – use your normal credit card when traveling overseas. Don’t waste your time with pre-paid credit cards especially with Ozforex travel pre-paid master card. Other than losing money, I did not get anything.

South Pole
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15,381 posts
36 reviews
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1. Re: OzForex Travel Card Review - BEWARE Rip Off Rates

from the ozforex web site:

"The mid-market rates shown in our exchange currency converter are neither "buy" rates nor "sell" rates. Mid-market rates are derived from mid-point between the buy and sell rates of large-value transactions in the global currency markets. The buy or sell rate you would receive from OzForex would be close to the mid-market rate but would include our margin that reflects the size of your transfer. OzForex does not guarantee the accuracy of the rate or currency calculations. Please read the terms of use"

therefore i guess applying for the travel card is yet another case of caveat emptor

Sydney
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2. Re: OzForex Travel Card Review - BEWARE Rip Off Rates

On the website, the rate they quoted was 1.036. This is the midrate. You are never going to get that rate from anyone. If you can come within 1% of it you are doing extremely well as a consumer, and on your average credit card (say Westpac) you get around 2.5% to 3%. from the midrate.

It looks like you got around 3.7% from the midrate with this prepaid card. It isn't as good as a post-paid card, but I'd say it isn't that bad compared with other prepaid travel cards.

The only benefit I can see for these prepaid cards is if you want to lock in an exchange rate. A card like 28 Degrees will give you a better rate (the Mastercard global rate) but if the AUD drops 2% by next week (always possible) then you will be better of having the prepaid card.

It is all part of the risk vs convenience vs cost tradeoff. You just need to do these things with your eyes open.

The issue that you can't know the actual exchange rate is an issue with other credit cards as well. If you use a Mastercard, you can't find the rate they will use on their website for another 48 hours after you make the payment.

Brisbane
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for Brisbane
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3. Re: OzForex Travel Card Review - BEWARE Rip Off Rates

Wait till you find out how much money you'll lose when you top it up using BPAY.

Oscar

Brisbane, Australia
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672 posts
51 reviews
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4. Re: OzForex Travel Card Review - BEWARE Rip Off Rates

I usually use my normal credit card for all overseas trips. This was the first time I went for a pre-paid credit card (big mistake). Even with the normal credit card + the 3% charge, that my bank charges I still find the exchange rate to be good.

If this was the case, I would have purchased US Dollars in Cash from travellex.com.au who offers $1510 US Dollars for $1507.44 AU Dollars.

An absolute waste of time and money.

South Pole
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15,381 posts
36 reviews
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5. Re: OzForex Travel Card Review - BEWARE Rip Off Rates

or cash from the post office

Sydney
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2,456 posts
26 reviews
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6. Re: OzForex Travel Card Review - BEWARE Rip Off Rates

Anyway, we need to be clear here.

Prepaid "travel money" cards are a premium product in the AU market. They supply you with an additional card, the associated security, and a locked in exchange rate. However, you don't get the credit card provided rate, and there are often additional fees to withdraw your money, top-up, or use your card in your home country, or even to leave a card unused.

Credit cards use the standard exchange rate applied by VISA/Mastercard etc (usually around 1% from the midrate), but the issuing institution often charges a fee on top of that. This can vary from 0% upwards, but is usually around 2%.

Cash exchange operates in a competitive market of quite complex fees and commissions. Expect to pay up to 25% from the midrate for small transactions outside the Opera House or at the airport, and as little as 1.5% from the midrate at specialist discount operators.

In your case you've had a go at the Ozforex card, but from the information you've supplied it is certainly no worse than any other cards in the "prepaid travel money" category, in fact from what you have said it may well be better.

Pick which method meets your risk, cost and convenience profile.

In your case, I'd be looking for a credit card that charges a no fees for OS transactions.

7. Re: OzForex Travel Card Review - BEWARE Rip Off Rates

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Removed on: 1:07 am, April 27, 2012
Sydney, Australia
7 posts
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8. Re: OzForex Travel Card Review - BEWARE Rip Off Rates

Hi Everyone,

This is Sandra from the OzForex team. I’d like to clarify a few points that seem to cause confusion.

As stated above there is a difference between mid-market rates and customer rates. The mid-market rates are neither "buy" rates nor "sell" rates. They are derived from mid-point between the buy and sell rates of large-value transactions in the global currency markets. The buy or sell rate you would receive from OzForex would be close to the mid-market rate but would include our margin. It is industry standard to display mid-market rates and customer rates separately.

In the Travel Card section on our website you can find a page that discloses our Travel Card exchange rates and offers full rate transparency prior to application. Once the card has been loaded with funds and you are converting your currency of choice online, the rate is displayed first allowing you to view the exact rate and the guaranteed amount you will receive before finalising the conversion.

Regarding our Travel Card pricing, we have positioned ourselves in the market to be in line with our competitors. Our Card rates are 4% higher than the wholesale rate (e.g. the one you see on the news or on our general currency converter).

Our most recent comparison of our competitor rates for Prepaid Travel Cards indicated the OzForex rates to be slightly lower on the majority of currency pairs. A wider margin is applied compared to our online transfers business due to the extra expenses incurred in the production, processing and convenience of having a Travel Card that allows you to use it globally.

We suggest customers not only compare the Travel Card exchange rate but also consider that we do not charge a reload fee and are the only Australian provider who does not. Our Travel Card ATM fees are very low and you can reload via BPay with $0 charge as needed when travelling.

I hope this assists in understanding our pricing for the Travel Card. We understand it can be difficult when comparing to other travel money options (Cash, Credit Card etc.) as they all have their own positives and negatives.

Please let us know if there is anything else that is unclear.

Cheers,

Sandra/OzForex Team

Sydney, Australia
Destination Expert
for Train Travel
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9. Re: OzForex Travel Card Review - BEWARE Rip Off Rates

But what is the point of having a travel card at all? Any bank will issue a Visa (or Mastercard) debit card that can be used globally. Most charge an international withdrawal fee, but Citibank has an account which does not charge these fees.

Sydney, Australia
7 posts
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10. Re: OzForex Travel Card Review - BEWARE Rip Off Rates

Hi Sydneynick,

That's a good question. We see two advantages (and these apply to Travel Cards in general, not just ours): 1. You can lock in the exchange rate and 2. in many cases the exchange rates would be better than on a credit or debit card.

Cheers,

Sandra/OzForex