Using Cards Abroad/bank accounts

chattychappy

avqs43 wrote: »

Would this work? Direct debit in force to clear the outstanding balance. i.e. £0.00. Create a small balance with a British purchase of say £20 (not yet on statement) before I go away. I make the withdrawal of €300 and immediately transfer an amount of about £260 (depending on the exchange rate) which would be sufficient to pay off the €300 and some of the £20. This means I am not going into credit. But the amount would pay off the €300 in total and the remainder would be offset against the £20, (presumably). The DD would clear the balance next month.

Yes, a cunning plan and I think it would work!! I don't know how the interaction with DDs work because I never use DDs.

Personally I wouldn't bother with the small purchase. I just wait until the cash transaction hits the account and then send the right amount. (I'm always online when I'm overseas, but appreciate this isn't convenient for everyone.)

Alternatively, just "underestimate" a bit. The interest really is tiny. Eg lets say you took out €300. I make today's rate is 1.1821. So that's £253.79. Let's say you knock off 5% to allow for a sudden drop in the Euro which could put you into credit. So you send £241.10 the next day and it takes 2 days to arrive. In fact the rate doesn't change - and you make up the shortfall 30 days after the original transaction, again arriving after 2 days.

Interest would be 3 days @ £253.79 and 32 days @ £12.69. The monthly cash rate is 2.075%.

So that works out at roughly 53p for the 3 days and 28p for the 32 days.

Well, my 5% thing was probably overcautious, and you probably wouldn't wait 30 days. But still - it would only be an extra 28p over your cunning plan. The main interest cost is the 3 days on the full amount.

It is true you shouldn't put the account into credit, but I'm sure (hope?) they wouldn't worry if it was less than a few quid - eg because of a forex rate change you slightly overestimate the cost of your withdrawal.

Incidentally I've always had good rates off Zero, as reported elsewhere.

avqs43

Chattychappy

I don't like paying ANY interest. As I said earlier, the amount charged, (£1.41) is less than £1 more than I would have expected. That is £0.19 a day for three days. It is the principle of the thing. Nationwide has withdrawn from the foreign market basically and there are very few ways of getting cash cheaply. We went to Madeira at Christmas and I tested the water by withdrawing €100 from a Santander cash machine using my Alliance & Leicester (now Santander of course) debit card. Big mistake. It cost about £5 when you include a reduced exchange rate and a minimum fee of £1.99:(

I could change to a Zero current account, but my A & L premier account gives me free European travel insurance. The amount saved in free cash withdrawals would be far less than the extra travel insurance charges incurred.

I'll keep you posted about the Santander reply.

fawinds

Mikhail wrote: »

Only if you move between citibank accounts, if you make a deposit from elsewhere, e.g., Lloyds they apply interbank exchange rate. I've done it.

Do you mean that if I send say £100 from my HSBC account to my Citibank euro account and the interbank exchange rate the day the money arrives is 1.1870 I will be paid 118.70 euros by Citibank?

This is good news to me, because when I send pounds from my citibank sterling account to the euro account the exchange rate is about 2% lower than the interbank exchange rate. I have just made a test and will wait for the outcome. Pity they don't have faster payments yet.

bbxsa

labp04 wrote: »

MetroBank dont charge

I opened a Metro Bank account for the purposes of using the card abroad. However, I am now finding that the card is not fully accepted.

I spoke with one of the reps at the bank today and they say it is taking time for companies to update their systems. He said that for a while Vodafone and T-Mobile had difficulty accepting the cards and that for a while they didn't work in Barclay's ATMs. Otherwise, there was nothing that I could do and they could give no indication of whether it will work for me when I visit Australia.

Last night I attempted to book some tickets via Tickets.com and my transaction was declined. I spoke with some people at Tickets.com today to find out the reason and they said it is because they do not accept the Metro Bank card. And last week the card did not work at a London hotel where I tried to buy drinks.

I hope this is not going to be a problem when travelling (and of course I will carry one of my high-forex-fee credit cards with me as a backup). But Metro Bank has been operating for a while and for them to show so little concern (along with other problems I have had opening my account) worries me. I am finding that they are not what they claim to be.

Anyway, just wanted to share my experience with using their cards in case anyone else finds this of relevance.

Ken

bbxsa

fawinds wrote: »

Do you mean that if I send say £100 from my HSBC account to my Citibank euro account and the interbank exchange rate the day the money arrives is 1.1870 I will be paid 118.70 euros by Citibank?

This is good news to me, because when I send pounds from my citibank sterling account to the euro account the exchange rate is about 2% lower than the interbank exchange rate. I have just made a test and will wait for the outcome. Pity they don't have faster payments yet.

I use Citibank for their USD and EUR current accounts for when I am travelling to the US and Euroland. If you send GBP from your HSBC account to your EUR account at Citibank I think you will be paying the same poor exchange rate as you get when you try to transfer money from GBP to EUR within Citibank.

For forex transfers I tend to use CustomHouse (aka XE.com) for low-value transfers. If a high-value transfer is required you might look into something like an InteractiveBrokers.com trading account. InteractiveBrokers allows you to trade currencies in relatively small transaction sizes at wholesale spreads (ie 1-2 pips say for GBP/EUR) but XE.com might be on the order of 300pips. And the rubbish Citibank spread (I just checked bid/ask now at 1.1654/1.2130) is a whopping 476pips. It is not just Citibank but the forex spreads at any retail bank are an absolute rip-off (especially for such a simple and liquid market). So look around carefully before accepting the first forex rate you see.

fawinds

bbxsa wrote: »

I use Citibank for their USD and EUR current accounts for when I am travelling to the US and Euroland. If you send GBP from your HSBC account to your EUR account at Citibank I think you will be paying the same poor exchange rate as you get when you try to transfer money from GBP to EUR within Citibank.

That is what I always thought. Anyway I have sent two small amount just to check whether they apply the same exchange rate for sterling coming from outside a citibank sterling account.

Nevertheless I got hold of a Metro Bank debit card and am currently using it in Spain. The best exchange rate and no problems so far. I have just used it to get cash from ATMs.

bbxsa

What I think happens is that HSBC sends the GBP to Citibank. Citibank then converts it to EUR at their exchange rate. They may even charge a fee. It most likely would be the same as sending the GBP from your HSBC account to a Citibank GBP account and then doing an internal transfer to your EUR acct. I suspect either approach results in you getting Citibank's fx rate.

I remember that many years ago when I first moved to the UK I deposited a USD check into my RBS savings account and not only did I get a ridiculous exchange rate, they also slapped me with a big service fee. Ever since then I have learned to cut retail banks out of all of my forex transactions.

fawinds

Well, I'v got fresh news. As I said, I sent two small amounts from HSBC to my Citibank USD and EUR accounts. In fact, those small amount were £1.00 to each account.

They have arrived today and in the USD account they have paid USD1.61. In the EUR account they have paid EUR1.20

I have checked their rate for sending the same amount from my Citibank Sterling account and the results would have been USD1.59 and EUR1.17.

Obviously it seems they get a 2% exchange load if money is sent from a Citibank sterling account to a currency account, but they DO apply the interbank exchange rate when the money is received from another bank.

As a matter of fact I have just received today the most recent transaction made in euros with my Metro Bank debit card and their exchange rate, which is supposed to be Mastercard's official exchange rate, has been 1.18976799 euros for £1.00. Citibank's exchange rate is better, though it may depend on the time the conversion has been made, as currencies fluctuate constantly.

It is a pity Citibank has not yet implemented FP. In the current situation with a BACS payment you never know how much you will get from your money when it arrives two days later.

bbxsa

fawinds wrote: »

Well, I'v got fresh news. As I said, I sent two small amounts from HSBC to my Citibank USD and EUR accounts. In fact, those small amount were £1.00 to each account.

They have arrived today and in the USD account they have paid USD1.61. In the EUR account they have paid EUR1.20

I have checked their rate for sending the same amount from my Citibank Sterling account and the results would have been USD1.59 and EUR1.17.

Obviously it seems they get a 2% exchange load if money is sent from a Citibank sterling account to a currency account, but they DO apply the interbank exchange rate when the money is received from another bank.

As a matter of fact I have just received today the most recent transaction made in euros with my Metro Bank debit card and their exchange rate, which is supposed to be Mastercard's official exchange rate, has been 1.18976799 euros for £1.00. Citibank's exchange rate is better, though it may depend on the time the conversion has been made, as currencies fluctuate constantly.

It is a pity Citibank has not yet implemented FP. In the current situation with a BACS payment you never know how much you will get from your money when it arrives two days later.

That is a very interesting experiment. However, the timing of the conversion may be important here. Which dates did you initiate the transactions?

Note the exchange rates have fluctuated by amounts similar to the differences you observed above in the last couple of days.
http:// markets.ft.com /tearsheets/performance.asp?s=GBPUSD&ss=FTStandard
GBP/USD has traded in the 1.6000 1.6150 range the past few days.

bbxsa

fawinds wrote: »

As a matter of fact I have just received today the most recent transaction made in euros with my Metro Bank debit card and their exchange rate, which is supposed to be Mastercard's official exchange rate, has been 1.18976799 euros for £1.00. Citibank's exchange rate is better, though it may depend on the time the conversion has been made, as currencies fluctuate constantly.

You can check the MastCard exchange rates.:
https:// www .mastercard.com/us/personal/en/cardholderservices/currencyconversion/index.html