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Question Of The Week: Exchange Rates
Former_MSE_Penelope
Posts: 536 Forumite
Q. I have a Nationwide card and when in Sri Lanka have to pay 1% - fair enough I know those are the terms. If I pay for goods in sterling in Sri Lanka using my Debit card, do I incur the 1% charge? John, by email
Martin's A: Pay on Nationwide card outside Europe and you get the best exchange plus a 1% load - so buy something worth £100 of Rupees and it costs you £101. It's much better than most cards but there are two cheaper (see top travel cards).
Yet pay £100 in Sterling and it just costs £100. BUT who is doing the currency conversion? If a shop or hotel is, you're reliant on its exchange rate and normally those conversion rates are abominable. So you're almost certainly better off paying in Rupees and letting Nationwide do the conversion with its 1% load.
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Martin's A: Pay on Nationwide card outside Europe and you get the best exchange plus a 1% load - so buy something worth £100 of Rupees and it costs you £101. It's much better than most cards but there are two cheaper (see top travel cards).
Yet pay £100 in Sterling and it just costs £100. BUT who is doing the currency conversion? If a shop or hotel is, you're reliant on its exchange rate and normally those conversion rates are abominable. So you're almost certainly better off paying in Rupees and letting Nationwide do the conversion with its 1% load.
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Comments
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Is't a 1% load on £100 just 1 pound?
£10 would make it 10% on a £100 would it not?The more I live, the more I learn.
The more I learn, the more I grow.
The more I grow, the more I see.
The more I see, the more I know.
The more I know, the more I see,
How little I know.!!
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MSE_Penelope wrote: »Q. I have a Nationwide card and when in Sri Lanka have to pay 1% - fair enough I know those are the terms. If I pay for goods in sterling in Sri Lanka using my Debit card, do I incur the 1% charge? John, by email
Martin's A: Pay on Nationwide card outside Europe and you get the best exchange plus a 1% load - so buy something worth £100 of Rupees and it costs you £10. It's much better than most cards but there are two cheaper (see top travel cards).
Yet pay £100 in Sterling and it just costs £100. BUT who is doing the currency conversion? If a shop or hotel is, you're reliant on its exchange rate and normally those conversion rates are abominable. So you're almost certainly better off paying in Rupees and letting Nationwide do the conversion with its 1% load.
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That's 10%!!! It only costs £1 at 1%.
** Edit - I see Robin already spotted it. I hadn't scrolled down and seen the reply.0 -
Hi folks, sorry somewhere in transposing this the final 1 got missed off
It should have read £101 not £10 its been changed.Martin Lewis, Money Saving Expert.
Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.Debt-Free Wannabee Official Nerd Club: (Honorary) Members number 0000 -
answer to the question should be pay with a post office credit card and pay the bill when you return save the 1%
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MSE_Penelope wrote: »Q. I have a Nationwide card and when in Sri Lanka have to pay 1% - fair enough I know those are the terms. If I pay for goods in sterling in Sri Lanka using my Debit card, do I incur the 1% charge? John, by email
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The original question's answer is YES - you do get charged the 1%.
The 1% (or whatever your particular card charges) for foreign transactions is just that foreign TRANSACTIONS and not foreign CURRENCY! Your bank/credit card company can incurr costs from the handling bank in the foreign country. Credit card is still the cheapest way and (I think typically) 2-3% is great value for money considering fees for other means (Travellers Cheques, Bureau De Change for cash etc).C. (Ex-Pat Brit)
Travel Insurance Claim Manager
Travel Claims Specialist0
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