T Cheq. Question HELP NEEDED

dzug

hsvqbutr wrote: »

Im just making asumptions. i always thought/believe that i would be charged more by using a credit/debit card.

must admit it never entered my head to use them either, Ive always been taught that TC's are safe and easy and they they were commision free.

1 question though. How can it be a better exchange rate by using a hole in the wall, as the rate is set when the conversion is made in the UK.

AND. thank you for all of you who have replied and helped or thrown spanner in works and given me more to think about. No. HONESTLY THANK YOU.

Gary

The hole in the wall rate is not set in the UK - it's set centrally by visa/mastercard at the time of the transaction, or at worst at the end of that day. It will be based on the interbank rate.

The UK card issuer then adds their charges to it - typically 2.75% and sometimes another 1.5 or 2%.

A UK issuer of TCs (or seller of foreign cash) typically loads the interbank rate by 5%. And calls it 'commission free' because he doesn't identify a separate fee - it's all buried in the exchange rate.

Froggitt

Used Crown Currency Exchange to buy AMex TCs at the Interbank rate along with my cash.

Monkhouse

I wouldn't write off TCs as always a worse option than taking a card.

We're off to the US soon, and I've been 'speculating' the market for ages now.
Last month, I bought £1500 of TCs from Travelex at 1.9901 - gives me $2985.

I did this because I didn't think the pound/dollar rate would keep rising for much longer, and wanted to buy at the peak - which more or less, I did.

Since the plunge last week, rates are already lower than this. At the time of writing, the interbank rate is only 1.985.

If I'd not got TCs and just taken my card abroad today, I'd only have $2895 (thats 1.985x1500 less the 2.75% cash withdrawl loading). Thats a loss of $90, or roughly £45.

I'm not actually going for 2 more weeks yet, but the rate is still slowly dropping. Fair enough, it may go up again, but I reckon I bought at pretty much the peak.

The moral being, everyone is always saying to just use this card or that card abroad (if one more person tells me to get a Nationwide account....!!!!!) and to not bother with cash or TCs.
But it's not always the best move, it all depends on the market.