Understanding Exchange Rates

xxdiddiexx

Hi all

I hope this is in the right forum.

Can someone explain to me please the difference between an exchange rate and the rate quoted for "Travel Money" please?

For e.g. on the Sky News Interactive Service they will quote two different figures for Exchange Rates/Travel Money, such as £2.01/£1.87 as an example.

I want to purchase an iPod from the states. I am ordering it online from the US apple store and having it delivered to my friend in the states who is coming to the UK at the end of the month. Before I order it however, I want to know if I will be getting value for money. The iPod is $199.00 (approx £88.00 using exchange rates). The same iPod costs £129 here in the UK.

Can anyone advise please? Which value should I be looking at when trying to calcualte the cost of an item abroad?

Thanks for reading my post

west_bear

Use the travel rate - also factor in the cost of paying by credit/debit card which may add a further 2.5% to transaction cost.

The exchange rate quote by Sky will be the mid rate, the bigger your transaction the closer to that rate you'll get. I assume that you're not dealing in millions of pounds so therefore the travel rate will apply to you.

Not all travel rates are the same so shop around! Best rates I've found are at CityForex - and M&S normally come a close second.

Worse rates are at the airport exchange counters.

Crabman

You may already be aware, but the site has a new tool for deciding where to get travel money: Travel Money Maximiser

You could also use the option of spending abroad on your card, read the article for details: Spending Overseas: The cheapest way to pay

xxdiddiexx

Thanks very much for this guys. Useful informtion for when I am travelling abroad.

I wanted to know though what rate to use to see how much an iPod would cost in the US If I will only be saving £10 then I may as well get it here. The iPod is $199.00 and costs £129 here.

I would be using either my M&S Credit Card or my Citibank debit card. Whichever one charges me the least will be the one I use

Thanks

bengal-stripe

If your friend is coming over and s/he needs GBP to spend over here, you can use the mid-market rate. In this case, both of you will have gained.
Today’s mid-market rate is GBP 49.2328 for USD 100.00
http://www.xe.com/ucc/convert.cgi

If your friend does not need spending money and expects you to pay him/her in USD, then use the buying rate (it will cost you more).