Purchasing from Abroad but in GBP - Fees?

Killian12321

Hi all,

I suspect this will be best directed at my credit card provider (MBNA) but at the minute the only way to contact them is phone and I'm currently at work.

I'm looking to purchase a diamond ring from JamesAllen.com and they offer the payment to be made in USD or GBP at checkout. I need to confirm what exchange rate they use but wondering if I will atleast skip the 3% transaction fee if I pay in GBP?

Or does it not matter that it's in sterling, only that it's in a foreign currency?

zagfles

Killian12321 wrote: »

Hi all,

I suspect this will be best directed at my credit card provider (MBNA) but at the minute the only way to contact them is phone and I'm currently at work.

I'm looking to purchase a diamond ring from JamesAllen.com and they offer the payment to be made in USD or GBP at checkout. I need to confirm what exchange rate they use but wondering if I will atleast skip the 3% transaction fee if I pay in GBP?

Or does it not matter that it's in sterling, only that it's in a foreign currency?

What rate does the retailer give you? Often this includes a markup of more than the markup most cards charge.

Killian12321

That's a good point.

I've just stuck a few things in the basket to give me numbers to work with. Let's just say it equates to;

$4195 which in pounds on there is £3420.

The actual conversion at a perfect exchange rate is £3281.36 which is £138 cheaper. I'm pretty sure I saw somewhere MBNA charge a 3% handling fee on non sterling transactions which would equate to £98.

So looks like I'll probably be better off paying in USD after all.

Am I forgetting any other potential costs?

I'm also accounting for customs and VAT (2.5% custom charge, 20% VAT and then a Fedex handling fee).

zagfles

See here for the current rates depending whether it's VISA or Mastercard click on the appropriate one:

https://www.visaeurope.com/making-payments/exchange-rates

https://www.mastercard.us/en-us/consumers/get-support/convert-currency.html

Though be aware the rate could change.

Is the purchase needed now? If it can wait a few weeks it's well worth getting a zero fee card eg the Halifax Clarity as it'll come in useful for future foreign purchases and holidays. See http://www.moneysavingexpert.com/travel/cheap-travel-money

Killian12321

That calculator is really helpful thank you zagfles.

Unfortunately I have a Halifax Clarity card which is empty and I only use for abroad. However the limit isn't enough for this purchase. I also have 2 years interest free on purchases with the Mastercard from MBNA.

I'll do the calculator again nearer the date to be sure but it looks as though I'll be slightly better off going down the route of paying in USD.

eDicky

Sign up for Revolut on their smartphone app, the virtual card is ready to use as soon as you load some GBP. Pay in USD and it will convert at the straight interbank rate (weekdays), or you can convert any time beforehand if you prefer. Anything left over you can send back to your bank account. No fees whatsoever, unless you want to buy a £5 plastic card for next time you travel.

https://revolut.com

Killian12321

That looks really interesting but the idea of topping up something that I've never heard of with £4,000 plus makes me somewhat uncomfortable.

I shall definitely look into it though. Such a good idea but I'd be petrified something would go wrong or MBNA would treat it as a cash advance.

fifeken

Killian12321 wrote: »

However the limit isn't enough for this purchase.

Call them and ask them to increase the limit.

eDicky

Killian12321 wrote: »

I shall definitely look into it though. Such a good idea but I'd be petrified something would go wrong or MBNA would treat it as a cash advance.

I had overlooked your intention to use a credit card - Revolut charge 1% for this, so although most credit cards reportedly treat a Revolut top-up as a purchase it's not completely fee-free for you.

If you can't get a credit limit increase for your Clarity card, you could link your MBNA card to Travelex Supercard for the purchase (However I've not personally used it much myself):

https://www.travelex.co.uk/services/supercard