Best way to pay an overseas bill

JJ2017

Hi,

Really hope someone might be able to point my fiancee and I in the right direction. We're getting married overseas and currently have to pay a deposit fee to the hotel we're getting married at to the tune of approximately £2k, and will have to make another payment or two nearer the time.

The options for payment appear to be either bank transfer or to pay using a credit card. I have no idea about overseas fee's and seem to get it wrong every time so really hope someone can tell me the best/cheapest way to do this? On one hand, if i do a bank transfer I will be paying a one off 20/25£ fee (can't remember off the top of my head), and using my banks currency rate if I am correct.

The other option would be to pay the £2k with out credit card (Virgin) which wouldn't have a fee, but I have no idea how to calculate what I would be charged, and assume the rates would be worse?

Is there an out and out winner? And if not how do i calculate what's best?

Thank you in advance to anyone that can help!

Cheers

HappyMJ

Credit card would be the best way then you are protected in case of failure of the supplier to provide the good and services you've paid for.

It might cost 2.75% (about £55 on £2,000) or something similar but in my opinion it's worth it.

You could pay a smaller deposit by credit card and some by bank transfer and the whole purchase value will be covered by your credit card company.

eDicky

Both the bank transfer and your credit card will involve fees and adverse exchange rates. Assuming that you will have other expenses while overseas yourselves, you should obtain suitable cards for fee-free overseas use and also pay the hotel with them, or at least the subsequent payments if the first one is required immediately.

http://www.moneysavingexpert.com/travel/cheap-travel-money

grumbler

JJ2017 wrote: »

The options for payment appear to be either bank transfer or to pay using a credit card. I have no idea about overseas fee's and seem to get it wrong every time so really hope someone can tell me the best/cheapest way to do this? On one hand, if i do a bank transfer I will be paying a one off 20/25£ fee (can't remember off the top of my head), and using my banks currency rate if I am correct.

The other option would be to pay the £2k with out credit card (Virgin) which wouldn't have a fee, but I have no idea how to calculate what I would be charged, and assume the rates would be worse?

Your assumption is wrong.
For both bank transfer and card payment you'll be charged ~3% for conversion.
For a bank transfer you pay a flat fee on the top, and intermediary banks, if any, can take their cut, pretty much unpredictably: Help preventing Bank Rip-off When Sending money Overseas ?
Also, you have absolutely no protection in this case should things go wrong.

Using a currency broker can be cheaper than a bank transfer, but again, leaves you without any protection: Sending Money Abroad

For debit and credit card payments you have chargeback protection

For credit card payments there is extra Section 75 protection, but in simple cases it's hardly worth paying extra for it if a CC payment costs more than by a debit card.


So, any card payment is better than a straightforward bank transfer, and there are cards that don't charge for conversion:

• Top Travel Spending Cards
• Your Card: Overseas Charges

System

Just to add non-UK merchants will almost always regard UK debit cards (Visa/MasterCard) as credit cards. They is therefore unlikely to be a cost benefit from using one over the other.

Something which has spend benefits but no overseas conversion fees like the Lloyds Avios might be suitable.

grumbler wrote: »

For debit and credit card payments you have chargeback protection

For credit card payments there is extra Section 75 protection, but in simple cases it's hardly worth paying extra for it if a CC payment costs more than by a debit card.

bouncydog1

Halifax clarity card gives you the best rate and there is no fee. I've used mine to draw cash whilst fx rates were good - 1.40 euros to £ for instance - and transferred cash from my account to pay off immediately transaction appeared on card to avoid interest on cash withdrawal. There is always a small amount of interest to pay around a couple of £. My next holiday in France spends will be paid from my cash stash!

Same for overseas spending. Will the hotel charge a fee for paying by credit card and could you get a Clarity? Fx is not great at the moment as sterling has weakened but will be a better rate than using your banks rate and paying a fee. See grumbler's post for more info on cards.