Cheap cash abroad with Santander Zero?

kaloss

Hello,
I am Italian and a will soon start a PhD in UK. I will receive a monthly scholarship that a will deposit on a British bank account.

I think I will need often to withdraw euros from ATM in Italy and to pay using the British debit/credit card in Italy.

What is the cheapest way to do that?

I read about Santander Zero Credit Card. With that I should not have any currency exchange fee, neither cash withdraw fee.

My idea is to open a Santander student account and request the Zero Credit Card. In this way I should be able to use the debit card to make purchases and withdraw cash in UK and the Zero Credit Card while I am not in UK.

Would I need to pay interests on the purchases/withdraws with the Zero Credit card or it is free if I paid off the balance at the end of the month? (in Italy all the credit cards are interest free if the balance is paid off at the end of the month).

Thank you for any answer!

chattychappy

Santander Zero is certainly a great card for this purpose.

No exchange rate loading, no fee (except any locally applied ATM fees). You are just charged interest from the date of withdrawal. If you pay as soon as you get your statement, this is very little and not worth worrying about.

Also consider Metrobank. They offer a current account service which includes a debit card that is free to use overseas. (Also a CC, I think.)

Do not rely on a single UK card when Italy. UK cards do have a habit of getting blocked by hypersensitive ant-fraud systems. Consider also Halifax Clarity and the Post Office credit card. Bear in mind, though, you may not get these cards until you've got a good track record. Your idea to open a current account with Santander and get a CC off them at the same time is a good one IMHO.

kaloss

Thank you for your reply.

I am not very familiar with UK credit card system. What do you mean that the interest will be very little? How can I calculate it knowing the APR?

I mean, let's say I use the card to pay 100€ in a shop, then as soon as I receive the statement the bank will pay it off (is that automatic right? I guess I don't need to do anything manually). Will I pay 100€ or something more?

I am asking this because in Italy when you have a credit card you pay at the end of the month (the bank do that automatically) all the purchases you did in that month and if you have enough money in the bank account to pay the debt back you don't pay any interest (so if you purchased for 1000€ you pay 1000€ at the end of the month).

So basically in Italy the only difference between a debit card and a credit card for a normal use is that with the debit card your account balance is reduce immediately when you make a payment with it, while with the credit card the balance is reduced at the end of the month.

ses6jwg

The Santander Zero Credit Card is no longer on sale.

May be worth considering an alternative such as the Halifax Clarity.

However being new to the UK you are unlikely to get accepted for one. It may be worth looking at pre-paid cards such as the FairFX or CantonFX currency Mastercards instead.

zagfles

kaloss wrote: »

Thank you for your reply.

I am not very familiar with UK credit card system. What do you mean that the interest will be very little? How can I calculate it knowing the APR?

I mean, let's say I use the card to pay 100€ in a shop, then as soon as I receive the statement the bank will pay it off (is that automatic right? I guess I don't need to do anything manually). Will I pay 100€ or something more?

I am asking this because in Italy when you have a credit card you pay at the end of the month (the bank do that automatically) all the purchases you did in that month and if you have enough money in the bank account to pay the debt back you don't pay any interest (so if you purchased for 1000€ you pay 1000€ at the end of the month).

So basically in Italy the only difference between a debit card and a credit card for a normal use is that with the debit card your account balance is reduce immediately when you make a payment with it, while with the credit card the balance is reduced at the end of the month.

It's the same here for purchases, but for ATM withdrawals interest is charged immediately. So if you use the card for ATM withdrawals you should try to pay it off as soon as possible.

Roger1

The Santander Zero credit card is available to existing Santander account holders.
http://www.santander.co.uk/csgs/Satellite?appID=abbey.internet.Abbeycom&canal=CABBEYCOM&cid=1237853005503&empr=Abbeycom&leng=en_GB&pagename=Abbeycom%2FPage%2FWC_ACOM_TemplateB2

If the OP opens a Santander student account as suggested, this could be the way in.

However, the OP should be aware that Santander charge interest for cash in full from the date of withdrawal, typically at 27.9% p.a.

As already mentioned, the Halifax Clarity card would be a better bet - similar exchange rates but typically 12.9% p.a. (about 1% a month) for cash. And you don't need a Halifax/Bank of Scotland account to apply, though this would be helpful.

kaloss

ses6jwg wrote: »

The Santander Zero Credit Card is no longer on sale.

May be worth considering an alternative such as the Halifax Clarity.

However being new to the UK you are unlikely to get accepted for one. It may be worth looking at pre-paid cards such as the FairFX or CantonFX currency Mastercards instead.

CaxtonFX looks good but it actually hide a fee. In fact today the interbank currency exchange rate GBPEUR is 1.1410 while CaxtonFX euro traveller provides a 1.1150. So it is about a 2.28% exchange rate fee.
FairFX has the same problem with an hidden exchange rate fee of 1.84% but it also charge 1.5€ for each ATM withdraws.

When other cards (for example debit cards) state they have a fixed exchange rate fee do they apply it to the interbank exchange rate or to the exchange rate the bank provides?

The point is. How can I compare currency cards if they don't state explicitly what is their margin on the interbank exchange rate?

zagfles

kaloss wrote: »

CaxtonFX looks good but it actually hide a fee. In fact today the interbank currency exchange rate GBPEUR is 1.1410 while CaxtonFX euro traveller provides a 1.1150. So it is about a 2.28% exchange rate fee.
FairFX has the same problem with an hidden exchange rate fee of 1.84% but it also charge 1.5€ for each ATM withdraws.

When other cards (for example debit cards) state they have a fixed exchange rate fee do they apply it to the interbank exchange rate or to the exchange rate the bank provides?

The point is. How can I compare currency cards if they don't state explicitly what is their margin on the interbank exchange rate?

They use the VISA or MasterCard rates as the base, then mark them up (or rather down) by the fee they quote in the T&Cs. The VISA/MasterCard rates are pretty much the interbank rates - see links below.

A few eg the SZ and Clarity don't mark the rate up at all so you get pretty much the interbank rate with them, so excellent value.

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

http://corporate.visa.com/pd/consumer_services/consumer_ex_rates.jsp

Toe-Jam

If you are new to the UK, chances are you will not be accepted for a Santander Zero card or indeed any other mainstream cards straight away, especially as a student.

You would be better off with a Metro Bank current account if you are near London.

kaloss

Toe-Jam wrote: »

If you are new to the UK, chances are you will not be accepted for a Santander Zero card or indeed any other mainstream cards straight away, especially as a student.

You would be better off with a Metro Bank current account if you are near London.

I will not be in London so I guess metrobank is not a good idea.

When do you think I will be able to have a credit history good enough to get a credit card having a yearly income of about 14000£ after taxes and never overdrafting?

TakeThis

Travelex Cash Passport Globe

Do not make the initial load of the Prepaid card with any of these bank cards: Barclays, Lloyds TSB, Natwest, Santander or RBS. Co-op may charge too, but may refund if pressed(Simply because there is nothing in their T&Cs about this charge).

Once you have purchased the card, you can then load it via your bank account.

You get the full Mastercard rate, but they take a 1.49% fee. There are no additional fees including ATM fees.

The best value option, if you don't intend to visit London is the Gold Light account with the N&P, which can be done on-line. You need to make at least five transactions per month. Their Gold Classic option requires that you pay £500 per month into the account.

With them you get the full VISA rate with no deductions.