overseas spending - cheaper cash withdrawals by loading credit card

robocockadoo

I suppose it just depends what countries you are going to, but these days i just take cash with me, and get a much better rate of return on the conversion rate of that country, and also if the card machine not working or run out of money, then big probs. I still take a card or 2 with me, but i try and make sure it doesn't involve Barclays as the conversion rate they give you is crazy

dzug

robocockadoo wrote: »

I suppose it just depends what countries you are going to, but these days i just take cash with me, and get a much better rate of return on the conversion rate of that country, and also if the card machine not working or run out of money, then big probs. I still take a card or 2 with me, but i try and make sure it doesn't involve Barclays as the conversion rate they give you is crazy

Well yes it does depend on where you are going, but I doubt if there's many places where it's actually cheaper to take cash and use it there than to use a card charging nothing. Why would they take a loss on the transaction?

Voyager2002

dzug wrote: »

Yep they charge the same fees (OP says as much) but there is no outstanding balance to pay interest on.

That is what I was trying to say. If the card is paid fairly promptly the interest charge is minimal, and far less then you save by using Nationwide rather than First Direct.

Voyager2002

dzug wrote: »

Well yes it does depend on where you are going, but I doubt if there's many places where it's actually cheaper to take cash and use it there than to use a card charging nothing. Why would they take a loss on the transaction?

The only situation where it makes sense to take cash is when the country you are visiting has exchange controls, so that if you are brave you can change your money on the black market. Of course, this is only for people who know what they are doing, because breaking the law in a foreign country makes you a prime target for con-tricksters.

In all other cases, the Nationwide card gives a significantly better rate than you can possibly get for cash.

hammy_the_hammer

i'm quite happy to admit i'm wrong if someone has actually done this in the last couple of years .....i still believe that a cash advance transaction attracts the full set of charges regardless of the balance on your CC
anyone fancy giving it a go ?

Voyager2002

hammy_the_hammer wrote: »

i'm quite happy to admit i'm wrong if someone has actually done this in the last couple of years .....i still believe that a cash advance transaction attracts the full set of charges regardless of the balance on your CC
anyone fancy giving it a go ?

I'm sure you are right about this. The point is, if you are borrowing the money then you pay interest as well, but if you pre-load your card then at least you save the interest charges. My point was that those interest charges, in my (limited) experience, are too small to be worth the worry.

richardw

Perhaps the answer is here

http://www.nationwide.co.uk/NR/rdonlyres/537363B6-1FD8-4521-AE0E-CEBF458F663E/0/P4433_OCT07.PDF

Tarquinius

hammy_the_hammer wrote: »

i'm quite happy to admit i'm wrong if someone has actually done this in the last couple of years .....i still believe that a cash advance transaction attracts the full set of charges regardless of the balance on your CC
anyone fancy giving it a go ?

Well I'm giving it a go and will report back to the board in a week and a half or so when I return.

In the meantime, I have been assured by Nationwide that I will NOT incur any of the usual interest fees for cash withdrawal because I have put a credit balance on my card. I will however have to pay their usual cash withdrawal fee, which appears a lot cheaper than the amount first direct would charge me.

I'd have to agree with other posters though, that the interest charge would be very small if I paid it off immediately I returned, so maybe not worth the hassle of front-loading the card.

Out of interest, since my OP, I also used holiday money finder on this site and I found to my surprise that purchasing holiday cash via Travelex worked out to be just as cheap as the VISA rate with a 2.5% cash withdrawal charge i.e. it seems that pre-ordering cash via Travelex is about the same as withdrawing cash via Nationwide CC abroad. Unfortunately I can't do this, as you have to pick up from a Travelex branch and there isn't one at Manchester airport or anywhere near me.

Still none of these are as cheap as using a Nationwide debit card.

jmw20

Donnie wrote: »

Not really, as they can't charge you interest on a credit balance.

In the old days, L&V used to pay interest on credit balances. Those days have long gone.

Egg Money pays 4% credit interest and only charges 7.9% interest on cash advances. They also dont charge any fees.

lisyloo

Be aware that if you load a credit card then your credit balance may not be insured.
i.e. some companies do not insure YOUR money against fraud.
They insure themselves but not if YOUR money is used fraudulently.

This is what Nationwide told me over the phone.
Someone else on here told me I'd misunderstood but I phone Nationwide 3 times to check about and I'm quite clear on what they told me.

I don't know about other companies.

Obviously you may still consider pre-loading for a very short period to be negligeable risk.