Why we cut up our credit cards

Wednesday, 3 March 2010

Diners Club cards
I was in Bali from 15 to 20 February, Maureen was having an important birthday and we’d convened a family get together in Ubud to celebrate. We were paying for it so during our visit there were assorted ATM withdrawals, nine charges to my Visa credit card and two to my Diners Club credit card, you can read The Lonely Planet Story if you want to know why I’ve never had an American Express card.

I use the excellent website for exchange rate information and during the week from 15 to 22 February the Australian dollar was worth between 8284 to 8453 rupiah, a variation of about 2.5% over the period.

ATM withdrawals to cards with ANZ and Commonwealth bank and were made at rather worse exchange rates varying from 7659 to 7865 rupiah to the dollar. My Visa transactions (the Visa card is also ANZ bank) were made at 8045 to 8064 rupiah to the dollar. So the exchange rates on the ATM withdrawals were as much as 5% worse than the credit card rates although in part that’s because the amount of money you can pull out of Indonesian ATM machines is quite low, only 1 or 1.5 million rupiah, say A$125 or A$185.

And then there were the two Diners Club charges, made at an exchange rate of 7358 rupiah to the dollar, in other words 10% worse than the Visa exchange rate. Unfortunately I charged A$5000 to my Diners Club card, so I would have saved A$400 by using my Visa card, or A$200 if I’d paid in cash. The Diners’ excuse? They use the Royal Bank of Scotland’s exchange rate and add a 3% service charge to it.

So the lessons:

1. Use a Visa card rather than a Diners Club card
2. Don’t trust Royal Bank of Scotland’s exchange rate either
3. Use a Visa card rather than pay cash, you may get charged 2 or 3% more for paying with a credit card in Bali, but the Visa card exchange rate is 5% better than the exchange rate for getting cash from an ATM.

Exchange Rates – Indonesian rupiah to the Australia dollar:

  •                        8369
  • Visa                                     8055
  • ATM withdrawals            7762
  • Diners Club                       7358