How to buy travellers cheques or foreign currency

freckles_2

In the past we have transferred money to our French bank account using currencies4less and have received a good exchange rate, however this is really only worthwhile for large amounts because charges for under £5K are high, approx.£35.00 and our French Credit Agricole bank charge us for international money transfers (paying into our account there!) 16 euros per 2K. Buying euros at the post office seemed to have been the next best and fine for small amounts.
Now I am going to be in France for a few months so have been checking with my bank, RBS, to determine the cost of making cash machine withdrawals, earlier this month we used our debit card to withdraw 30 euros in France and I have just read our statement:
Exchange rate:1.474
Charge: 0.47
ERTF:0.54
So full amount debited £21.36 (by my calculation 30 euros would be £20.35)
This £1.01 may seem too petty to query but as I expect to be making withdrawals of £200/£300 per week in France I thought I better find the cheapest way.
RBS branch staff found their leaflet and details too confusing too understand so could not give me a formula, they did come up with the following:
Cash machine withdrawals are subject to a 2.25% charge, up to a maximum of £4.00, exchange rate is whatever our rates are on that day and you would need to phone us to find out,we do not show them on our web site.
So..........I recalculated the 30e withdrawal and found that the 2.25% was the charge only, the ERTF amount was a futher cost, adding the ERTF and charge together actually made a 4.1% fee.
Phoned the bank again, they were unable to tell me how the ERTF amount is calculated but 'thought' that because their leaflet mentions a maximum of £4.00, if I make maximum withdrawal, which on my card is £200, the full amount of all charges would be no more than £4.00, but they could not be sure. The person I spoke to suggested that I make as many payments by debit card as possible because then I'd know what the charges would be: 2.25% + 75p per transaction!
The moral of all this waffle is that we have to do our own research, the bank staff (including the branch manager) could not provide any answers or suggestions!!
Now I'm wondering why I pay a £12/month service charge...................

grumbler

freckles wrote:

..Now I'm wondering why I pay a £12/month service charge...................

Good question!

RBS: Travel and International Payments > Debit Cards :

Transaction charges
When the bank debits a transaction in a foreign currency either at cash machines or through a Point of Sale (POS), the amount is converted into Sterling (using the Bank's exchange rate) and an Exchange Rate Transaction Fee (ERTF) of 2.65% is added. The following charges are also payable:

For cash machine withdrawals only, a further 2.25% of the Sterling transaction amount (no minimum, maximum £4)

30/1.474=£20.35
£20.35*2.25%=£0.46
£20.35*2.65%=£0.54

Now I'm wondering why you pay a £12/month service charge instead of using free Nationwide cards abroad...

cjn_2

There's one thought which doesn't seem to have been suggested. If you're going to a country which is relatively poor, it can be very cheap to physically exchange banknotes via a vendor in that country. In countries like Slovakia, I found that rates offered could be as little as 0.2% different to the 'market exhange rate'. I think there are a number of reasons for this phenomenom:

1. The difference between what the vendor gives you, and the 'wholesale' rate he gets, is essentially his wage. Since wages are lower in such countries, lower spreads and better rates can be offered.

2. Vendors can offer better rates on currencies they shift more of, due to economies of scale. A typical vendor in London will sell very few Slovak Crowns, so will offer a poor rate. However, a vendor in Bratislava will be trading in more pounds than just about any other currency (Euro's excepted).

3. Just an observation, but in Eastern Europe there seem a very large number of currency booths, often whole streets worth. Such competition drives down prices.

---

Not much help if you want Euro's, but just a thought.

GraemeW

"Simple" Question
All very confusing! Framing a very simple question about something I need to do next week.
I have a £1000 hotel bill to pay in Italy at the end of my stay. I am a Barclays customer and hold a Barclaycard and a Debit card.
I seem to have several options:
Buy euro travel cheques in UK and pay hotel with these.
Buy stirling travel cheques in UK, change in Italy in italian bank
Pay bill using debit or credit card.

I have a feeling that exchange rates in Italy using stirling cheques are significantly better even allowing for other costs. However I can't find any figures on the web to see how exchange rates in Italy compare with uk.

TimC

GraemeW wrote:

"Simple" Question
All very confusing! Framing a very simple question about something I need to do next week.
I have a £1000 hotel bill to pay in Italy at the end of my stay. I am a Barclays customer and hold a Barclaycard and a Debit card.
I seem to have several options:
Buy euro travel cheques in UK and pay hotel with these.
Buy stirling travel cheques in UK, change in Italy in italian bank
Pay bill using debit or credit card.

I have a feeling that exchange rates in Italy using stirling cheques are significantly better even allowing for other costs. However I can't find any figures on the web to see how exchange rates in Italy compare with uk.

As it is next week, you're stuck with the choices you outlined above plus taking cash - I'm assuming you meant that you have a €1,000 bill not £1,000?

By my reckoning and looking at http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1084090833,12230, for your transaction and using the rate I got last week in Madrid on my Nationwide Visa Credit Card £1:€1.4798 compared to the travelex rate for today of £1:€1.4391 (Cash or Euro Traveller's Cheques):
Barclaycard credit card €1,000=>£672.09 + fees £47.50 = £719.59
Barclays Debit card €1,000=>£672.09 + fees £32.50 = £704.59
Travelex €1,000=>£694.88 plus Barclay's fee of £4.50 = £699.38
(see http://forums.moneysavingexpert.com/showthread.html?t=54377&page=3&pp=10 post 21 by grumbler.)

[As an aside - I can't believe this fee for buying currency elsewhere - the phrase restrictive practices comes to mind. I've been using Travelex for years to make sure I have some currency when I arrive and Natwest have never charged a fee for using my Switch/Maestro card when pre-ordering currency on-line.]

As for changing Sterling traveller's cheques in Italy, no idea ~ Travelex will charge you 1½% commission for them on purchase (but not on dollar or Euro TCs), so you need to get a rate of better than £1:€1.4607 to offset that ~ and then you are looking at the selling rate for £'s in Italy plus charges at the bank/exchange bureaux - I'd be stunned if they are cheaper.

We have a similar situation next month (in Italy too), but sorted out the Nationwide Visa credit card for the trip - so our cost would be £672.09. The hotel we are using offers a 2% discount for bills settled on arrival in cash - that would bring the travelex figure down to £680.98 - so worth asking when you check-in if you choose to pay cash?

In conclusion it looks like cash/€ TCs are your cheapest option, as it takes about 2 weeks to get the Nationwide Visa credit card - might be worth putting that on your To Do list when you return? (Personally, I'd do the cash from Travelex - even better if you can order it from a non-charging account(!), and also hope that the hotel has room safes or safety deposit boxes).

I'm slightly annoyed that I didn't have time to test the ATM exchange rate on our flex account to complete the comparison! Thanks for asking the question as I needed to get round to confirming the numbers!!!!

Anyone got a recent ATM rate for Euros using a Nationwide Flexaccount cashcard?

grumbler

TimC wrote:

...using the rate I got last week in Madrid on my Nationwide Visa Credit Card £1:€1.4798 compared to the travelex rate for today of £1:€1.4391

You cannot compare these two rates! Luckily today's interbank rate is about the same as a week ago.
Today's interbank rate (used by Nationwide and other banks) is 1.4789. If €1000 (in fact OP asks about £1000) bill is paid in cash withdrawn with cards then:
Barclaycard: €1000=(1000+27.50+20)/1.4789=£708
Barclays Debit card: €1000=(1000+27.50)/1.4789+4.50=£699

However, why pay cash? If bill is paid by either credit or debit card then

€1000=(1000+27.50)/1.4789=£695 - without hassle with Travelex.

Of course, the best way is to pay with Nationwide card. In this case you save 2.75% as against Barclays cards.

P.S. I always use Nationwide cards, hence there is no need to buy foreign currency or cheques. Cannot give any advice about cheques

wpet99

Can anybody beat these people on a daily basis for rates (i just print it out and get one of the high street agent sto match their rate :

http://www.interchangefx.co.uk/cash_rates.htm

TimC

grumbler wrote:

You cannot compare these two rates! Luckily today's interbank rate is about the same as a week ago.
Today's interbank rate (used by Nationwide and other banks) is 1.4789. If €1000 (in fact OP asks about £1000) bill is paid in cash withdrawn with cards then:
Barclaycard: €1000=(1000+27.50+20)/1.4789=£708
Barclays Debit card: €1000=(1000+27.50)/1.4789+4.50=£699

However, why pay cash? If bill is paid by either credit or debit card then

€1000=(1000+27.50)/1.4789=£695 - without hassle with Travelex.

Of course, the best way is to pay with Nationwide card. In this case you save 2.75% as against Barclays cards.

P.S. I always use Nationwide cards, hence there is no need to buy foreign currency or cheques. Cannot give any advice about cheques

Hi grumbler - it looks like I added the commission as a % on £1,000 not €1,000 which has skewed my card conversions - so definately agree with your figures for the cards - the rates I used there are pretty much the same as you say.

Puzzled about your Travelex figure though - the reason I quoted today's figure is because the rate I got on Wednesday, was slightly worse due to being the BA travelmoney rate (need the BA miles!). But I cannot get a quote from Travelex anywhere near 1.4789 - I have the receipt in front of me for 1.4337?

Edited to say - I am now using Nationwide cards - except for that first cash requirement - when you travel to places like Saudi/Pakistan etc it is reassuring to have both a fistfull of local currency and US $ !!!

southcoastsailor

The interchangefx service requires 2 weeks notice, because you can't pay with a card, only cheques (or cash in person at their offices in London). I confess I would also be cautious about sending cheques for such a large amount to a company I know little of. They may be reputable, but what would happen in case of a problem?

I noticed that First Direct are offering no-fee postal delivery of foreign currency with slightly less favourable rates. This applies until end August, and is fee free for existing customers, or fee free for non-customers above 500 pounds. Otherwise 3.95 transaction and postage cost.

Amex offer a pre-order service, where you pay and collect cash on departure at the airport. Unfortunately you don't know exactly how much you will pay - the rate is calculated based on current rates for the day. But still seems much better than rates/commission I have paid at airports in the past.

So for the example you gave it would cost about 9 pounds more:

Interchangefx: 1000 Euros / 1.425 + 6 pounds fee = 707.75
FirstDirect: 1000 Euros / 1.395636 = 716.51
Amex (Collect at Airport on departure) = 713.62

I think FD service is provided in conjunction with Amex (because of the website domain name that comes up), but have no evidence of this. https://www.firstdirect.com
https://www.fx4you.com/uk/lhr/

But as mentioned many times in this thread, I have used my Nationwide credit card for business expenses in many countries without a hitch. However, cash withdrawal incurs interest fees from the day of withdrawal until all charges are paid off (ie including any hotel bills etc). So I prefer to sort out any cash requierments in the UK first - most countries take US Dollars or Euros for business trip type expenses these days. :rotfl:

southcoastsailor

A minor addendum to my immediately previous post:

Travelex (pick up at the airport) service: 1000 Euros = 706.66
Although watch out for those card charges from your own bank which can add 1.5% - this requires Switch/Delta or cash to avoid.

TO summarise:

1000 Euros at the airport:
Travelex 706.66
Amex 713.62

Delivered to your door
Interchangefx 707.75 (but allow 2 weeks, pay by cheque)
FirstDirect 716.51