Cheap Travel Money Discussion Area

b0uncy

I am going on a Caribbean cruise in January and wondered if anybody could recommend the best credit card to take with me.
many thanks for your help in advance

stphnstevey

park_gate wrote: »

Yes the Zero card will be better than the prepaid provided you meet Santander terms and conditions.



I recently got a Zero card and sat down with a magnifying glass to read the small print and there is nothing against pre-loading. Didn't you read the small print?

Terry

It's well known that credit card companies hate pre-loading and you will quickly lose your credit card that way

andrewramage

Hi,

The "Cheap Travel Money" page is an excellent & truly informative page, however it has left me slightly confused and I think the page would benefit significantly from a short section at the beginning explaining how currency exchange rates work.

I have read in the forum thread about an 'official mid-price' rate - which presumably is the rate from some official currency exchange market (is there a single global market or are there different ones with different rates?) then there are the VISA and MASTERCARD rates which are similar (but not the same) as this 'mid-price' rate - these are the rates that credit cards generally use (are there only these two or are there more as well?), then there are the banks which each charge their own rate based on the mid-price rate but +/- 5%.... And then for some cards you also have 'loading' which applies on top of the rate that is used - so a card which applies a % loading applies it to which base rate? It is extremely confusing but I am sure it can be explained very quickly by someone who understands it!

Sorry if this has already been covered in the forum - I haven't been able to read the whole thread - but like I said, I believe an intro section on the original web page would be the best place to explain this.

Cheers, Andy

dzug1

Well no - you've explained it very well and have understood it just about perfectly. If you are still confused it's because it is confusing. Most people can't handle that many variables.

The banks +/- 5% refers to cash exchange (and at BdeC as well). Competition can reduce that spread - or increase it

Cards use the visa/mastercard rate with very few exceptions before applying their (typically) 2.75% loading. RBS Natwest and Tesco sneakily introduced their own (unfavourable) rate but got found out and had to backtrack

andrewramage

Thanks for the response.

I think I get it now - it depends on the transaction type: for purchases, either the VISA or MASTERCARD exchange rate is used (depending on the card type), but for cash withdrawals (or cash-loading on a pre-paid card) a different rate is used which depends on the individual bank you are withdrawing the cash from.

This makes sense as a purchase means your bank is transferring money (via VISA or M/C) to the seller, whereas a cash withdrawal means your bank is 'selling' you currency (like a bureau exchange).

A loading % could be added to one or both of these transaction types - this depends on the T&Cs of your card & bank (the MSE website explains this bit well).

Have I got it?!

I still think a short explanation on the website would be useful.

John_Pierpoint

No you are starting to confuse yourself.
If the transaction is "foreign" the credit card network will charge the home credit card company about 1% for processing the transaction.
By the time the purchase appears on your monthly statement statement that 1% will have grown to 2.7+%. But some CC's don't charge anything when the foreign purchase is in reliable parts of the world (eg the EU). Nationwide used to be free worldwide. Halifax clarity is free worldwide for purchases from traders.
If cash is involved there won't be a percentage being collected from the trader so there could be a charge for using the ATM plus the home credit card company might well charge one months worth of interest at (say) 24% that is 2% with a minimum charge or even an extra charge per transaction of say £1.50. However some organisations such as Halifax Carity only charge the interest for as long as it is outstanding and may only have a rate of (about 1%) per month. So if you are really clever you might be able to pay money into your cc account on the same day that the ATM withdrawal arrives, then you would pay nothing at all.

Debit cards work in a similar way but they cannot cross subsidise the profit being made from the trader for your cash withdrawals.
Nationwide used to carry no conversion percentage worldwide, but these days only Metro Bank (London) and one or two others don't bother to make a surcharge for foreign transactions.

TheBenga_2

Hi all,

I've been using the TravelMoneyMax for a long time and as I'm in London I can use the UK's best cash Bureau - ICE Waterloo.

I am going away for several weeks (to Greece!) and wanted a method of taking more money with me than cash.

As such, I'm now the proud owner of a Halifax Clarity card. I am, however, confused, as to how this is the 'best' way to spend overseas. (re: PERFECT exchange rates)

At ICE Waterloo at today's rate I can get £1,000 GBP converted into €1,139.

Using my Clarity at Halifax's current exchange (knowing I have no fee's) then £1,000 GBP will get me €1,093.

If I get €46 LESS using my Clarity how is this, and I quote, "The right credit card is the cheapest way to spend abroad"

Am I missing something?Thanks!

cepheus

Clarity should use VISA or Mastercard rates not Halifax. Don't touch those!

I think it uses Mastercard, todays conversion rate was 1.1467

https://www.mastercard.com/global/currencyconversion/index.html

TheBenga_2

And THAT is a perfect answer to my question!

Thank you Cepheus.

joho

Huge apologies if this question has already been asked and answered!

I need to buy about £10,000 worth of Euros. Not many places will do that amount in one go, but that's by the by! On the travel money tool it says that you will get a better rate by ordering online BUT I have an RBS debit card which will charge this as a foreign currency transaction - am I right so far?

So, I can withdraw the cash to pay for the Euros, but can't order them online for cash payment in store - can I?

I do have a Clarity card, specifically for emergency spending abroad - could I use this to purchase/order the Euros online and then pay it off immediately?

Thank you for your help. x

ETA: I've just been reading the Cheap Travel Money articles in a bit more depth and, if I understand them correctly, I CAN use the Clarity card to order Euros and won't be charged for the privilege BUT I WILL be charged interest at about 12%, even though I can pay off the balance instantly (or even pre-pay to it as we don't actually travel for a couple of weeks yet!).

Am confused! Does using the Clarity save me anything over using my debit card? How much difference is there between online exchange rates and instore ones?

EATA: I've answered my own question really haven't I? I haven't got a card that doesn't charge so the lower rate on the deibt card is automatically lower than the interest on the Clarity - or am I completely confused?!?