As we all know however, things aren't going to stay anywhere near the current 75c value and at some stage our currency is going to drop. If you're somebody who buys goods regularly from overseas you can take advantage of this current situation and hedge your money for a rainy day.
Many banks are now offering prepaid credit cards in foreign currency. These cards are great for travelling as they allow you to buy funds in a foreign currently such as US$ and use the card in the USA without incurring any transaction fees (unless you withdraw cash from an ATM). Your money is also locked in at the exchange rate at the time of purchase, something that's fantastic for us right now.
I purchased a ANZ Travel Card when I was stopping in the USA earlier this year. The card costs $12 to buy and $10 every time it's reloaded. The bank does take a small commission when money is loaded but in my experience with several topups it's a lot lower than the usual fees incurred with foreign credit card transactions.
The beauty of this card is that the value of the card is in US$ and fixed at the time of purchase. This means if you top up US$1000 to your card at this very moment you'll gain significantly if the value of the NZ$ falls. Any purchases you make in US$ online are deducted from your balance, unlike a regular credit card that is converted using the current exchange rate.
I'd probably buy somewhere in the region of $500 - $1000 worth of goods from the USA yearly. These are typically books of Amazon or goods from eBay. By topping up my card now I can take advantage of the card should our currency fall as any purchases will effectively be at the ~73c rate that I purchased my US$ at.
If you're somebody who regularly buys goods from the USA or online in US$ a card such as this is something that's well worth investigating. I know most banks are now offering similair cards and Travelex are also. We all know our currency isn't going to stay high for ever - why not take advantage of the current rates while you can!
Other related posts:
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Why are airport taxes and service charges so high on Trans Tasman flights between New Zealand and Australia?
Flight reviews – Air New Zealand NZ87 Auckland (AKL) to Hong Kong (HKG) in Premium Economy and Air New Zealand NZ 80 Hong Kong (HKG) to Auckland (AKL) in Business Premier on the 777-200ER
Comment by chiefie, on 21-Oct-2009 23:09
Good idea! Do you know if ASB Bank has something like this? I know NZPost offers Travelex.
Comment by Fraktul, on 21-Oct-2009 23:25
or you could just get an FX call account and earn interest on your investment whilst being able to shift it round more easily to take advantage of exchange rate swings
Comment by euanandrews, on 22-Oct-2009 15:56
I would love to take advantage of the high NZ $ right now, and buy my Nokia N900, but I'm still waiting for its release...sigh.
Murphys law sez by the time the Nokia N900 is released and available here in NZ...the NZ $ will have plummeted!
Comment by dacraka, on 22-Oct-2009 18:55
I think the news just said tonight that it is expected to go to 82c and stay there for a while.
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