Alliance and Leicester Savings Product Changes

MarkyMarkD

grumbler wrote:

I'll take a risk to suggest otherwise. I never used NW card to buy currency (why would I do this?) and cannot be sure. However, I made some research and found this charge included in 'Fees and Charges' of all banks I checked, besides NW. Of course, I have not checked all banks and BSs. Post #20 in 'How to buy travellers cheques or foreign currency ' thread confirms that NW does not charge for this.

I can't see that post 20 on that thread (or indeed any post on that thread) confirms this at all. I can confirm from personal experience (in the last week!) that Nationwide DO levy the 1.5% cash advance charge on Travelex transactions on their credit card. This charge EVEN applies if you buy the foreign exchange through Nationwide's own travel money service: see here.

Nationwide MAY not charge the 1.5% on their debit card (I don't know), but most banks do.

grumbler

MarkyMarkD wrote:

I can't see that post 20 on that thread (or indeed any post on that thread) confirms this at all. I can confirm from personal experience (in the last week!) that Nationwide DO levy the 1.5% cash advance charge on Travelex transactions on their credit card.

I am sorry - made a mess with 'cut & paste'. I corrected the link in the original post: shoud read
#20 in 'best exchange rate for Euros-please'
There is no anything surprising with credit card: all credit cards charge for this. Indeed, buying currency is similar to a cash advance. Credit cards always charge for cash advances.
Miller was astonished by being charged for using debit card. I fully understand this amazement. Debit cards normaly don't charge for cash advances. This is really surprising that all (?) debit cards besides NW charge for buying currency. And, as far as I understand, this has nothing to do with Visa, because we purchase currency/cheques not from Visa, but from some other company and we pay £s to this company.

P.S.After some reflection I think that scenario is possible that currency exchange companies charge us not in £s, but in currency we buy. Thus they leave it to bank (Visa?) to charge us for currency convertion. As a result these companies can advertise very good exchange rates that actually have nothing to do with actual rate of excanging £s to currency, but only hide companies' comission. All this is only my speculation!

lipidicman

MarkyMarkD wrote:

It's not "the old retired accounts scam" at all. The rates are guaranteed on the existing accounts; the new account rates won't be higher as the reason they were closed is that they were too successful.

We'll see how long that is the case for......

miller

grumbler wrote:

P.S.After some reflection I think that scenario is possible that currency exchange companies charge us not in £s, but in currency we buy. Thus they leave it to bank (Visa?) to charge us for currency convertion. As a result these companies can advertise very good exchange rates that actually have nothing to do with actual rate of excanging £s to currency, but only hide companies' comission. All this is only my speculation!

Oi oi Grumbler! The amount I was quoted was in pounds by Travelex online. I'll admit that it states Maestro/Switch cards incur no fee (on the Travelex website).

A&L only had the 2.75% loading + 1.5% clause (foreign ATMS/purchases etc. etc.) clauses in their T&C's before I complained. Then they added the relevant section ("Cash withdrawals in the UK") to their T&C's and denied me a refund.

In case you wondered what that looked like see this:
http://blogs.warwick.ac.uk/images/cdoidge/2005/03/04/p3010095.jpg

grumbler

Miller, did you read my post #30 where I asked you about the date?

Alfie_E

grumbler wrote:

P.S.After some reflection I think that scenario is possible that currency exchange companies charge us not in £s, but in currency we buy. Thus they leave it to bank (Visa?) to charge us for currency convertion. As a result these companies can advertise very good exchange rates that actually have nothing to do with actual rate of excanging £s to currency, but only hide companies' comission. All this is only my speculation!

If that were the case, account statements would show the transaction as a non-sterling transaction. It would show the non-sterling amount, the Visa exchange rate and the sterling amount. Travelex transactions do not appear like this; they appear as simple sterling transactions.

However, I believe you are close to the truth in it being down to the way transactions pass through the Visa network. I believe the following to be the case. On the Visa network, merchants must state whether each transaction is for goods/services or is given back to the cardholder as cash. This affects the charge placed on the merchant, with transactions that are solely cash advances attracting no charge. For cash advances, Visa pass on all the charges to the card-issuing bank. The bank then passes this cost (plus profit) on to the cardholder.

You can contrast this with Western Union, which declare their transactions as services. If WU take your money from a debit card, the small fix charge disappears in with the rest of their larger service charge. If they take the money from a credit card, they have to pay a 2.5% charge to do this, which they pass on directly to the cardholder. If Travelex were to declare that their transactions are for services, they would have to pass those costs on to their customers, and their advertised charges would look much worse.

Indeed, they might be forced to declare their transactions as cash advances. If you use PayPal directly, you'll know that sending money requires you to state the nature of the transaction. PayPal never do anything they don't have to, and charge the same even if a card transaction is declared as cash, so you can bet accurate declaration is a requirement from the card networks. WU have a sizable service component in the money taken, Travelex do not.

grumbler

Thank you, Alfie E.
Very interesting. However, this does not enlighten why banks charge us for using debit cards to buy currency, but don't charge for getting cash from ATMs or as a cashback in supermarkets. :think:

Alfie_E

grumbler wrote:

Very interesting. However, this does not enlighten why banks charge us for using debit cards to buy currency, but don't charge for getting cash from ATMs or as a cashback in supermarkets. :think:

The charge for a debit card transaction is a fixed small amount. The supermarket has to pay this charge to debit our card, when we pay for our shopping. The charge to the supermarket is the same whether they add cashback on to our shopping bill or not. Supermarkets give cashback as a convenience, as any cost to them is minimal.

The banks could charge us for taking money out of ATMs, but they choose not to. The banks and building societies own LINK Interchange Network Ltd. It exists for their mutual benefit, and they get back any profits. ATM services are provided for free for exactly the same reason that chequeing facilities are free. A bank could charge for each and every cheque its customers issued, but no bank would do that today. (Having a chequebook may lower your interest rate, eg. Cahoot).

Switch cards probably escape the buy-currency cash advance fee because, once again, S2 Card Services Ltd is owned by, and run for the benefit of, the banks. (While Switch has been re-branded as Maestro, it's still the same company underneath.) Nationwide choose to absorb the Visa cash advance charges, just as they choose not to load the Visa foreign exchange rates. Other banks could do likewise, but don't.

miller

grumbler wrote:

Miller, did you read my post #30 where I asked you about the date?

I complained after this date, so it appears the clause was pre-existing (although it was certainly not in the paper literature provided with the account in January). I don't have a leg to stand on!

On a separate note A&L stated some monthly emails did not get through in March/April. When T&C changes are not sent by post, it is essential these notifications are received.