IDEA: Guardian against Brexit - Does this make sense to anyone?

geordiestory

I'm going backpacking for several months in SE Asia from Jan to April next year.

I'm worried that a 'leave' vote in the EU referendum (which I think will happen) could add hundreds of pounds onto my holiday cost. Some analysts predict a sterling fall of up to 20%.

So here's my idea.

I have a Caxton FX pre-paid credit card. I can load sterling directly onto it, but dollars at a slightly lower rate than the interbank rate (1.38 v ~1.41).

When both currencies are withdrawn from ATMs in local currency in Asia, a fee of 2.75% is deducted.

I've worked out that loading on dollars instead of sterling, I'd be around £80 worse off than by loading sterling directly onto the card.

That sounds bad, but just say there is a Brexit and the pound drops 20%, that'd wipe about £700 off my spending money.

Does this make sense? What do you think? :beer:

NiftyDigits

You'll find that it will cost more than that when in Thailand. That's a country really shooting itself in the foot.
Revolut is better if you want to buy US$ now. You'll get them at the full US$1.41+ rate currently. No charge to withdraw from ATMs or for purchases.*
Thailand ATMs add their own usurious charge of up to 200 baht(£4) per withdrawal.

*https://revolut.com/fairusage

PompeyPete

geordiestory wrote: »

Some analysts predict a sterling fall of up to 20%.

Scaremongering, all part of Project Fear.

agrinnall

Even if there is a vote to leave it'll take a long time before it actually happens - if we are not still in the EU in April 2017 I'll eat your hat.

duchy

I wouldn't buy dollars at the moment -The rate is poor due to the uncertainty created by the referendum -and whichever way the vote goes the rate is likely to improve once the uncertainty is removed whichever way the vote goes.

£700 is very little extra to save - on minimum wage -living at home you could delay going by a month and earn the shortfall anyway.

Sounds more like your guardian trying to disuade you from backpacking rather than any reasoned logic behind this.

PompeyPete

duchy wrote: »

I wouldn't buy dollars at the moment -The rate is poor due to the uncertainty created by the referendum -and whichever way the vote goes the rate is likely to improve once the uncertainty is removed whichever way the vote goes.

Then there'll be the uncertainty of whoever the nutjob walking into the White House will be.

zagfles

PompeyPete wrote: »

Then there'll be the uncertainty of whoever the nutjob walking into the White House will be.

Yup and if we vote to stay in the EU the pound might go up.

If you want to speculate in currency and think you know better than the markets - fill your boots. You'll have no need for MSE ever again, you'll be a billionaire.

PompeyPete

zagfles wrote: »

Yup and if we vote to stay in the EU the pound might go up.

Exactly the same as if we vote to leave, the pound might go up.

eDicky

zagfles wrote: »

If you want to speculate in currency and think you know better than the markets - fill your boots. You'll have no need for MSE ever again, you'll be a billionaire.

At least you would save the expense of a trip to Las Vegas. Might even be a slightly better chance of winning - doubtful though.