Avios earning worth 1% forex rate?

ephey

Level 2 Member
I apologize if this belongs somewhere else.

I live in Korea and have my Chase BA card with me. I used it and, comparing to the daily forex rate, I am getting a rate that equates a 1% forex few (despite the card being "no fee").

So in a hypothetical $100 transaction, I lose $1 to the exchange rate and earn 125 Avios (1.25x on all spending). Would you deem this worth it?
 

Matt

Administrator
Staff member
I apologize if this belongs somewhere else.

I live in Korea and have my Chase BA card with me. I used it and, comparing to the daily forex rate, I am getting a rate that equates a 1% forex few (despite the card being "no fee").

So in a hypothetical $100 transaction, I lose $1 to the exchange rate and earn 125 Avios (1.25x on all spending). Would you deem this worth it?
We tend to discuss manufactured spend in level 2. We can move this thread in there later.

Few questions:

Why Avios? You could get 2% so if it's really 1% spread then it's a logical win. Avios can be worth more, but are they to you?

Are you sure you are getting 1% off the real exchange rate? Does that factor in everything, sure as wire transfer fees to get money back to the US to pay down your debt?

You will have to also consider fluctuations- if the rate changes it may ruin a perfect plan. The safe way around this is to wire money home first, and only 'make the trade' if the rate remains favorable after that.
 

ephey

Level 2 Member
Why Avios? You could get 2% so if it's really 1% spread then it's a logical win. Avios can be worth more, but are they to you?
Two reasons. First being that I will be moving to the UK soon and plan to use Avios to do short haul trips while living in London. I already have ~55,000 Avios but see no reason to stop since I can currently do 6 RT short jaunts on these points and I don't know exactly all the travel I want to do. Also, I have my Chase BA card here with me now in Korea.

Are you sure you are getting 1% off the real exchange rate? Does that factor in everything, sure as wire transfer fees to get money back to the US to pay down your debt?

You will have to also consider fluctuations- if the rate changes it may ruin a perfect plan. The safe way around this is to wire money home first, and only 'make the trade' if the rate remains favorable after that.
Pretty sure. I've done a test transaction every day for the last week and I have consistently been given a rate 0.8-1.1% above the exact market rate for the currency exchange. I have not factored in wire transfers or poor exchange rates when sending money back Stateside because I don't need to send it immediately and I am waiting for the rate to fall closer to the 1,050 won/$ that it was when I last sent money (versus the ~1,110 is is now).

You bring up some good points, but I am going to have to eat the cost of the wire transfer fee regardless when I leave Korea, so my only potential difference is in possibly up to 10% of my money here being lost to forex insecurity. So a potential loss of maybe up to $200 depending how much I spent on my Chase BA.

My thought is basically this: if the dollar is stronger against the won than it was the last time I sent money home, I can use my US money and I'll basically be betting that the dollar will weaken a little between now and leaving Korea so I can shift the bulk of my money at that time. If I am mistaken, I will lose out on up to $200 but will have gained at least 2,250 Avios. I'm just wondering if this seems like a fair trade given my 18-month plan to want to do various Avios trips from the UK.

Thanks for taking the time to respond, by the way! (PS I'd like to know about Level 2 when that time comes.)
 

Matt

Administrator
Staff member
Two reasons. First being that I will be moving to the UK soon and plan to use Avios to do short haul trips while living in London. I already have ~55,000 Avios but see no reason to stop since I can currently do 6 RT short jaunts on these points and I don't know exactly all the travel I want to do. Also, I have my Chase BA card here with me now in Korea.



Pretty sure. I've done a test transaction every day for the last week and I have consistently been given a rate 0.8-1.1% above the exact market rate for the currency exchange. I have not factored in wire transfers or poor exchange rates when sending money back Stateside because I don't need to send it immediately and I am waiting for the rate to fall closer to the 1,050 won/$ that it was when I last sent money (versus the ~1,110 is is now).

You bring up some good points, but I am going to have to eat the cost of the wire transfer fee regardless when I leave Korea, so my only potential difference is in possibly up to 10% of my money here being lost to forex insecurity. So a potential loss of maybe up to $200 depending how much I spent on my Chase BA.

My thought is basically this: if the dollar is stronger against the won than it was the last time I sent money home, I can use my US money and I'll basically be betting that the dollar will weaken a little between now and leaving Korea so I can shift the bulk of my money at that time. If I am mistaken, I will lose out on up to $200 but will have gained at least 2,250 Avios. I'm just wondering if this seems like a fair trade given my 18-month plan to want to do various Avios trips from the UK.

Thanks for taking the time to respond, by the way! (PS I'd like to know about Level 2 when that time comes.)
Sounds good. It does depend on your situation as you say, I was coming at it worst case, where you are living month to month and would need to wire money to pay your bill monthly.

Does Korea have an exit tax? When I lived in Japan there was one (being proposed) so it was better to make a couple of transfers to lower assets too.

If you are confident that the rate is accurate then I say go for it, I'm surprised it's that good.

Am traveling today, will discuss level 2 with you via PM when I get back.
 
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