Cheapest way to spend overseas discussion

gjw_3

I have one question and one story of being caught out using a credit card abroad.

The first question is this: I intend to make a large purchase (£3000) in the states when visiting and wondered if there are any better ways of making a purchase (ie. currency broker etc) to avoid the likely commission/ poor exchange rates. Should I just take out the best buy card from martin's article purely for this purchase? My current account (natwest graduate) allows me commission-free foreign cash but I don't know how good the rate is.

The second story happened last month in Greece. We were out for a meal and paid by Cahoot Visa. the bill came to 42 euro but the restaurant "accidentally" put through 442 euro. They refunded 400 BUT when we got our statement the two amounts (400 in 442 out) have been presented on different days when, they say, the interest was different and our 42 euros has ended up costing us 42GBP. Cahoot say it's not their fault but I feel they should shoulder the cost. What does anyone else think?

Gareth

swhxd06

An interesting "anomaly" when it comes to spending abroad: I have a Lloyds TSB Platinum VISA card and an MBNA Platinum Mastercard (issued through Thomas Cook), both of which will charge me 2.75% for purchases abroad. However, using the MBNA card, I have just "withdrawn" 1500 Euros from the foreign currency counter of Thomas Cook. This transaction incurred absolutely no charges whatsoever! In fact, I now have seven weeks interest free before I even have to pay back the amount in sterling. This really does rather encourage one to withdraw the cash (especially if it's in Euros, which I'm afraid we will end up using sooner or later) instead of the supposed security of a credit card. Also, I even earn T C Holiday pounds for using the card!

grumbler

swhxd06 wrote:

... using the MBNA card, I have just "withdrawn" 1500 Euros from the foreign currency counter of Thomas Cook. This transaction incurred absolutely no charges whatsoever! ...

Just out of curiosity: what was the date of the transaction and what was the rate?

grumbler

peterbaker wrote:

I am curious as to why you really want to know, grumbler. If swhxd06 tells you a date and an exchange rate, what will you do with the information?

If I have this information I can explain swhxd06 that it was a mistake thinking that 'this transaction incurred absolutely no charges whatsoever'

swhxd06

Grumbler, I carried out this transaction last Saturday (6/8/5) and got an exchange rate of 1.4 euros to the pound. There is no charge from MBNA for the transaction and I now have 7 weeks (interest free!) to pay the bill. If that seems chargeable to you then it's then it's the kind of charge I will happily pay! Of course, I also get the holiday pounds to spend. :rotfl:

grumbler

swhxd06 wrote:

Grumbler, I carried out this transaction last Saturday (6/8/5) and got an exchange rate of 1.4 euros to the pound. There is no charge from MBNA for the transaction and I now have 7 weeks (interest free!) to pay the bill. If that seems chargeable to you then it's then it's the kind of charge I will happily pay! Of course, I also get the holiday pounds to spend. :rotfl:

Well, interbank rate was 1.44110. Your 'absolutely no charges whatsoever' is in fact 2.94%. Not bad, but worse than 0% with Nationwide card and than 2.75% with some other debit cards. And 2.94% for 7 weeks is in fact 24% APR. There are cheaper ways to borrow money. And did you actually have full 7 weeks for this particular transaction? Now it is my time to have some fun :rotfl:

pin

swhxd06 wrote:

Grumbler, I carried out this transaction last Saturday (6/8/5) and got an exchange rate of 1.4 euros to the pound. There is no charge from MBNA for the transaction and I now have 7 weeks (interest free!) to pay the bill. If that seems chargeable to you then it's then it's the kind of charge I will happily pay! Of course, I also get the holiday pounds to spend. :rotfl:

Hi

The interbank rate on 6 August was about 1.4410 Euros to the pound. However as its was a Saturday the money may have actually been taken out on Monday 8 August, on Monday the rate was 1.4180.

On that basis the MBNA charge if payment was taken on Saturday was about 2.845% and if the rate was based on Monday's rate then the MBNA charge was about 1.269%.

swhxd06

MBNA didn't actually charge me anything! The "charge" that you are all referring to was via Thomas Cook and they would have used the same exchange rate had I used cash.. Had I been changing a smaller amount of cash the exchange rate was even lower. Therefore I am still better off than if I had used cash in the first place.

DaveO

Just got back from a holiday in Menorca (and very good it was too!) but would like to mention the mark up pointed out by Martin on credit or debit card transactions in restaurants.

This is where you pay the bill with a credit or debit card and the restaurant converts the Euros to pounds and adds a 3% commission. The transaction then appears on your statement as a transaction in pounds only, not in Euros converted to pounds.

This did not happen at all restaurants but the point of this post is to say that trying to get them to charge me in Euros and not do the conversion proved impossible.

It appears they are set up at the terminals in the restaurant to automatically convert to pounds if a UK card is presented. No manner of complaining or asking for the transaction in Euros worked.

In the end I just withdrew cash on my Nationwide Flex account debit card and paid that way. It worked to my advantage but if you have a bit of a cash flow problem and want to use a credit card for a period of free credit or whatever you can't without incurring at least a 3% charge when faced with this attitude.

It is bad enough the "option" is presented to you in the first place but given the fact it isn't actually being offered as an option at all, I think this must in breach of some European law.

The receipt comes with some text on it saying "I have been offered a choice of currencies and have chosen to pay in pounds sterling and this is final" or words to that effect. I was never offered a choice once! I had to ask and even then it never worked out that I could get charged in Euros.

I also noticed on ATM withdrawals I would be offered a rate with commission if I did the transaction in pounds. I was able to decline this and do a Euro transaction and the rate I got from Nationwide beat the offered rate by quite a bit.

If my experience of not being offered the choice is mirrored elsewhere then I am sure it won't be long before you always have a 3% charge on using plastic like it or not.

My experience wasn't just as the restaurants in the areas I was in (Son Bou) but occurred all over the island so it wasn't a localised problem if you see what I mean.

Dave

ivy4

I am looking to buy a new Apple laptop and am visiting San Francisco in a couple of weeks time. I heard recently that If i buy in the USA and bring it home I may not have to pay tax or will only pay a nominal amount. Is this true as the savings too be made by buying in the Usa are not huge but worth considering. Thanks for any advice