Now that Nationwide has started charging for EU withdrawals, what's the cheapest way of obtaining foreign currency abroad?
For a Eurozone country? (Spain) For an EU country not in the Euro (Norway) For a country in Europe not in the EU (Turkey) For a country outside of Europe (USA)
Aside from the fact that Norway is not in the EU, the cheapest way is to time it right.
Other than that, buying on a Visa credit card in the currency of the country you're in gives pretty good rates.
IMO, the tiny differences in rates obtained from different methods are mostly irrelevant - unless you have a clear idea of exactly what you will spend the saving on. If you're very lucky, you might buy one extra ice-cream for every £500 you spend.
So I suggest you forget finance for a few days and enjoy your holiday.
Withdraw cash using a credit card which makes no foreign currency charge - eg from the Post Office did not in April but check now -
**after having pre-funded it**. The last bit is v important else you will pay interest from day 1.With a card which charges 2.75% that's 5.5 on 500 so it might cover a triple scoop :)
I do agree v much. It was worth my while pre-funding my card because we were staying in 2 gites, each of which required payment in cash and a cash deposit. Otherwise I'd not have bothered.
You obviously know of a very expensive ice cream shop.
You can easily drop 15 pounds in a 500 pound transaction if you do it wrong
tim
"Robin" wrote
Eh? - Where does 5.5 come from?
2.75% of 500 is 13.75..."Martin" wrote
Where do you get your ice-cream from?
Here?
If I'd used my main current account First Direct and their CC for the same transactions I'd have been charged 2% cash withdrawal fee plus
2.75% exchange rate markup for the ATM withdrawals, and 2.99% markup on credit card spending. About EUR 86 (71), which more than covered the cost of the excellent 3-course meal for the 4 of us on our last night!So I saved more than a 3-course meal per 500 spent!
A *very* "senior moment"?
But according to Martin Lewis they charge a cash *withdrawal* fee of
2.5% (rather than a cash *advance* fee which you'd probably avoid by pre-funding). Is he right?But even this is more than an ice-cream per 500 withdrawn! (compared to Nationwide at the moment).
Well, that certainly answers a question posted here last month about investing in gold - assuming it's retrievable :-)
< snip >
Several posters here seem to be ignoring two things... (1) the exchange rate obtained (as opposed to specific fees) and (2) the difference (i.e. potential saving) in overall cost of using different methods.
In giving the ice-cream example, I was not (and apologies if it appeared otherwise) contrasting the very best with the very worst.
Wherever possible, I use Visa to buy goods, rather than draw cash. E.g. recently , we were averaging 2% more euros on Visa (c/card) than by drawing cash on a debit card. You just have to be careful no-one charges the card in GBP.
I confess I use cash to buy the occasional ice-cream... :-)
I didn't think the changes came into effect until 1st November. Nationwide currently treat Turkey as Europe (including the "Asian" part) for charging purposes.
If you use a VISA card the exchange rate is set by VISA (pretty much the interbank rate), marked up by whatever your bank marks the rate up by. VISA have a calculator:
Not sure about outside Europe, as VISA charge 1%, NW pass this on, FD might include it in their 2.99% fee.
The difference in overall cost between FD (who have fairly typical charges) and Nationwide is 2.99% for credit card spending and 4.75% for cash withdrawals in Europe. Possibly 1% less outside Europe.
FD aren't the worst. Some charge 3% ATM fee plus the markup.
Probbaly a difference in the markup. I was getting the same rates on ATM withdrawals as CC spending, about 1.20-1.22 over the last 3 weeks.
Indeed. Although if your CC applies a typical 2.5-3% markup it probably won't make much difference (typical DCC markup is about the same).
My apologies. I had replied to an email from an acquaintance about the Sanatnder Zero card and did not switch brain-remnants back to the right track when I came to your post. (That's not proffered as an excuse, only as a plea in mitigation.)
I mentioned the exchange rates as Santander is MasterCard and Nationwide is Visa. We had wondered if there were differences (systematic or random) but could find no data.
Thanks, Andy. Interesting information. I guess I've been lucky enough not to encounter the mega-expensive cards. So I'll relish loads of extra ice-creams in a couple of weeks' time :-)
Come to think of it - Nationwide charge 1% for outside Europe so I'd expect them to be more expensive...however...
VISA do seem to have better rates than MasterCard....
So the VISA rate is pretty much the interbank rate, the MasterCard rate is about 1% over the interbank rate, so with the 1% Nationwide charge the rates should be about the same....
Thank you for those links to the Visa and MasterCard (MC) rates.
I had a look at the EUR/GBP rates. Those too show that on the whole VISA tracked Interbank more closely than MC in recent months. When the rates are fluctuating that makes it a bit of a lottery which is the better. Just to make it harder to decide, the rates on my Nationwide credit card statement differ from those on the Visa site, possibly just because of delays in processing the transactions.
The rate applied to both credit card purchases and ATM withdrawals is normally the rate applicable on the day the transaction is processed by your financial institution, not the date on which it takes place. I normally find that's two or three days after the actual transaction takes place.
Chris
Well unless your card is one of the very few which specifically make a point of not charging for foreign transactions, you'll probably find it marks up foreign transactions by at least 2.5%. So check the small print before you buy those ice-creams!
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