Withdrawing dollars from an American bank account in the UK

rainbow_carnage

I have an American bank account with HSBC. I need to withdraw $1,500 in USD in London. I'm trying to figure out the cheapest way to do this.

I can withdraw the money in GBP for free from an HSBC cash point (two separate transactions, as I have a £590 limit) then exchange it into USD. That seems wasteful. There may not be fees, but the bank will take its cut via the exchange rate.

I think there are some USD cash points in London (though I've yet to actually use one). But I'm worried that instead of a straightforward USD transaction, they'll convert it to GBP and back to USD again. In that case I'll have to pay the fee, plus lose out in the exchange.

Any ideas?

withabix

Go into an HSBC branch and ask?

Otherwise, one of the forex traders like Thomas Exchange etc, or try Citibank?

A London branch of an American bank?

NFH

On a EUR&USD cash machine in a London branch of HSBC, I tried to check the balance on my HSBC US account. The machine did not tell me my balance and HSBC US charged a $1.50 from my account for doing so! I didn't withdraw any USD from the machine, as I noticed the cash machine used dynamic currency conversion, converting the withdrawn USD amount to GBP, which would then be converted back to USD by HSBC US, i.e. the same undesirable scenario that you describe above.

Beware that any transaction with your HSBC US debit card outside the US will attract a 3% charge, even if the transaction is in USD. Also, an HSBC UK cash machine falls outside the definition of an "HSBC ATM" in HSBC US's terms and conditions. Therefore you could be using any bank's cash machine as far as charges are concerned.

Your best bet is to cash a cheque drawn on your HSBC US account. American Express do this for some of their customers free of charge. I doubt a UK branch of HSBC would be willing to do this, unless you are also an HSBC UK account holder. Forget using the card though, as you'll be stung at best with a 3% charge, at worst also with a double FX margin.

NFH

I've just noticed something. If your HSBC US account is Premier, you won't be charged the 3% non-US transaction fee. Therefore, find a USD cash machine in London which doesn't use dynamic currency conversion. That means you should forget HSBC(UK), Travelex and M&S. Try Raphaels Bank which has quite a few EUR cash machines around central London (some inside Thomas Cook branches) and may have USD ones too. Raphaels doesn't use dynamic currency conversion.

rainbow_carnage

Thanks so much for the replies. Lots of useful info.

withabix wrote: »

Go into an HSBC branch and ask?

I've phoned HSBC. They were no help. It took a good 10 minutes for the person to understand my question. Last time they told me that I wouldn't be charged a fee for transferring money from an American HSBC account into a UK one (having already paid a fee Stateside). Of course, they were wrong.

NFH wrote: »

On a EUR&USD cash machine in a London branch of HSBC, I tried to check the balance on my HSBC US account. The machine did not tell me my balance and HSBC US charged a $1.50 from my account for doing so! I didn't withdraw any USD from the machine, as I noticed the cash machine used dynamic currency conversion, converting the withdrawn USD amount to GBP, which would then be converted back to USD by HSBC US, i.e. the same undesirable scenario that you describe above.

Beware that any transaction with your HSBC US debit card outside the US will attract a 3% charge, even if the transaction is in USD. Also, an HSBC UK cash machine falls outside the definition of an "HSBC ATM" in HSBC US's terms and conditions. Therefore you could be using any bank's cash machine as far as charges are concerned.

Your best bet is to cash a cheque drawn on your HSBC US account. American Express do this for some of their customers free of charge. I doubt a UK branch of HSBC would be willing to do this, unless you are also an HSBC UK account holder. Forget using the card though, as you'll be stung at best with a 3% charge, at worst also with a double FX margin.

I don't have a Premier account. Is the 3% charge hidden in the exchange rate? It's not listed on my statements. When I've used a non-HSBC cash point abroad, I got charged $1.50 each time. That is listed as a separate charge.

I do have a cheque book and a UK HSBC account. Will try in branch. I also have an Amex card, but it's just a regular one without any fees. I doubt that it entitles me to any free services, but I will check.

Thank you, again. I will definitely avoid the EUR/USD machines. Sounds like a complete ripoff.

NFH

rainbow_carnage wrote: »

I don't have a Premier account. Is the 3% charge hidden in the exchange rate? It's not listed on my statements. When I've used a non-HSBC cash point abroad, I got charged $1.50 each time. That is listed as a separate charge.

I'm guessing the 3% is included in the transaction amount rather than being itemised as a separate charge. So if you withdraw $100, the transaction amount will be $103. Presumably most people don't notice it because the local transaction amount is not usually in USD. It would be most noticeable when in places like the British Virgin Islands, where USD is the local currency outside the USA.

rainbow_carnage

NFH wrote: »

I'm guessing the 3% is included in the transaction amount rather than being itemised as a separate charge. So if you withdraw $100, the transaction amount will be $103. Presumably most people don't notice it because the local transaction amount is not usually in USD. It would be most noticeable when in places like the British Virgin Islands, where USD is the local currency outside the USA.

That makes sense. It's not exactly transparent, though. I've just checked a credit card bill from when we were in Greece last month. It clearly states what the bill amount was in Euros, the exchange rate and what we were charged in GBP. The HSBC statement only gives a total in USD. The only indication that it's a foreign currency transaction is the location - Russell Sq.

NFH

NFH wrote: »

Also, an HSBC UK cash machine falls outside the definition of an "HSBC ATM" in HSBC US's terms and conditions. Therefore you could be using any bank's cash machine as far as charges are concerned.

I re-read this and they appear to have updated it. "HSBC ATMs" were previously defined as "HSBC Bank USA, N.A. Automated Teller Machines" but they are now not defined and the text now says "When an ATM not owned by HSBC is used...". Therefore you should no longer be charged a non-HSBC fee (now $2.50) for using an HSBC UK cash machine. However there's still the question of dynamic currency conversion. Unless HSBC UK's USD cash machine specifically tells you that the amount will be converted to GBP (simply displaying a GBP/USD rate is not enough) or if it tells you the GBP amount to be debited to your card, then you could argue with HSBC US that they have charged you for the withdrawal, in contradiction of all the prominent signs they put up around the UK branches saying that HSBC won't charge for cash withdrawals. I believe that these machines are in fact operated by Travelex despite being HSBC-branded and inside HSBC branches.

NFH

rainbow_carnage wrote: »

It's not exactly transparent, though. I've just checked a credit card bill from when we were in Greece last month.

HSBC USA's credit cards are slightly different from their MasterCard debit card. They charge 3% only if the transaction currency is not USD, not if the transaction is outside the US. Their T&Cs state "A 3% Foreign Transaction Fee will apply to transactions made in a foreign currency". There's no mention of non-US transactions.