Foreign Currency: How to get the cheapest article discussion area

Former_MSE_Dan

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Foreign Currency: How to get the cheapest article

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ailuro2

Great- we know about using the Nationwide card which we kept for using abroad- their cashback reduced to pitiful levels so stopped using it for everyday use.

We know to shop around for currency, and appreciate not to take too much in cash because of the business rate advantage.

Next thing we need to figure out is- what is best- using a Capital One 4% cashback card and paying the foreign transaction fees, or sticking with the Nationwide fee free option?
I have looked at the Capital One card, can't find their foreign transaction percentage.:o We had planned on saving the applicaiton for when we will be spending larger amounts of money, but appreciate the offer may not last forever....so should we grab it now and use it for holiday spedning in Canada four weeks from now?

Anyone know which is best- the idea only just landed in my head- maybe I'm missing something obvious?:D

ailuro2

Just found it- 2.75% - does this mean that there's an extra 1.25% to be made here?:money:

Luggworm

One thing Martin doesn't mention is that some debit cards (Lloyds TSB being one) charge a 'Cash Charge' of up to £4 if you use your debit card to buy foreign currency/travellers cheques from any retailer other than themselves. This makes web based sellers un-competitive for anything but very large purchases.

I found out the hard way after doing a lot searching to get the best rate/commission only to discover this charge that meant I could of got more by drawing the cash out of the bank and buying on the high street.

Best rate I can find is usually City Forex although you do have set up an account with them.

soph6660_0

Please help, I need to know the best way to change around 7,000 euros cash to pounds after my recent Greek wedding:beer: .
Any ideas without losing loads of commission or poor rates?

jeff1969

This looks like a good place to get currency if you don't need it immediately!

Have checked around on the net forums and they seem to be legit :T

http://www.crowncurrencyexchange.com/index.asp

OverlordKain

The best place to buy or sell currencies is anywhere, as long as it isn't in the UK. For some reason, the spreads in UK banks are very wide compared to those in other countries. (The difference between the buy and sell rates is also known as the "commission spread". Hmmm... I wonder why.)

A recent trip to the Caribbean resulted in a strange comparison. Mid-market rate TTD/GBP was 11.25-11.50. Rates offered at Gatwick Airport 8.25 (posted rate, didn't buy any); Piarco Airport (Trinidad) 10.00 (posted rate, £100=$1000); Cash machine withdrawal 10.75 (rate that appeared on statement); Rate in local bank 10.90 (£200=$2180). I've looked at the results on other foreign visits and have found similar comparisons. The cost of foreign exchange is yet another example of Ripoff Britain.

So my suggestions are:
withdraw just short of your daily limit in cash at the airport cash machine. At your destination, withdraw the rest of your limit (the tighter commission spread will cover part of the bank charges) to cover local transport etc until you can get to a bank at your destination to exchange your pounds. Needless to say, if you do make a cash machine withdrawal, withdraw as much as possible each time. Depending on the country, this may be less than your cash withdrawal limit.

If it's a country you visit regularly, consider opening a bank account locally and using a currency broker to transfer funds. I have accounts in Canada and the USA, and XE.com doesn't charge a wire fee to transmit funds to those countries. The account fees are made back by just 2 cash withdrawals per year.

Just some thoughts.

peteraj

Had fun today changing Sterling into Euros, everyone quotes commission FREE but seemed to miss the point when I pointed out that their charges would be covered by an adjustment in the exchange rate. I asked at the Post Office, HSBC, Travel agent (can't remember which one) and Thomas Cook. In the past I have used Post Ofice just because they seem to offer a reasonable rate and are convienient, however on this occasion Thomas Cook came up with the best deal - not at first I hasten to add but when I pointed out that I had a better deal they beat it - only by a few pence but the difference on £100 was a saving of around £1.50.
I would be the first to agree that this is not a huge saving but will probably be enough to buy me a bottle of water once I have gone through airport security where usually I would be saving more and taking my own bottle.

dzug

OverlordKain wrote: »

A recent trip to the Caribbean resulted in a strange comparison. Mid-market rate TTD/GBP was 11.25-11.50. Rates offered at Gatwick Airport 8.25 (posted rate, didn't buy any); Piarco Airport (Trinidad) 10.00 (posted rate, £100=$1000); Cash machine withdrawal 10.75 (rate that appeared on statement); Rate in local bank 10.90 (£200=$2180). I've looked at the results on other foreign visits and have found similar comparisons. The cost of foreign exchange is yet another example of Ripoff Britain.

You might do better still to get yourself a card that charges you the midmarket rate on ATM withdrawals without making other charges - ie Nationwide. You look to have been using one that charges the maximum.

TTD are not too good an example - a minor currency not in much demand. A similar comparison with $USD or € might be more revealing - I would expect similar but not so pronounced results.

OverlordKain

dzug wrote: »

You might do better still to get yourself a card that charges you the midmarket rate on ATM withdrawals without making other charges - ie Nationwide. You look to have been using one that charges the maximum.

You'll never get the midmarket rate. The best rate possible is what the banks themselves get. To get midmarket, you need to be trading in the area of $100 million. (I was a trader's assistant in the early 1990s.) My card is the BoS International card with none of the usual fees. I was comparing the cost of purchasing currency in the UK versus in the destination country, solely as an indication as to how much we get ripped off here.

dzug wrote: »

TTD are not too good an example - a minor currency not in much demand. A similar comparison with $USD or € might be more revealing - I would expect similar but not so pronounced results.

Whenever I need USD/EUR/CAD, I transfer money using xe.com to an account in that currency and use the relevant cash card, making comparisons irrelevant (as I transfer money when the rate looks to be in my favour). Of course TT uses GBP as a reserve currency so would offer preferential rates on buying GBP.

bankersmug

ailuro2 wrote: »

Just found it- 2.75% - does this mean that there's an extra 1.25% to be made here?:money:

Great minds think alike!

I too have the CapitalOne 4% cashback card, and a Nationwide Credit card. It sounds as if you may be correct on the 1.25 cashback - but like you, would like to ask - can anyone confirm this?!