Foreign Exchange question

Don't do either! You need to arm yourself with one of the few debit cards which enable you to withdraw cash from a cashpoint machine abroad at a good exchange rate without charging you a fee. The card which you get with a Nationwide Flex[1] account comes pretty close to that - for Europe at any rate. (it used to be good worldwide, but they recently moved the goalposts).

If you change your money at a bank - either here or there - you'll get a dire exchange rate compared with using a card.

[1] The Halifax Reward Credit Card gives a good rate with no transaction fee, but you *do* have to pay interest on cash withdrawals. You can minimise that if you repay more or less straight away without waiting for the next bill. It's still better than using a bank.

They charge 2% everywhere now.

Yes - pretty much any card is better than exchanging cash. The charges which cards quote are on the interbank rates so even a card charging

3% markup plus 1.5% ATM fee is better than changing cash, where there's usually a 5-7% markup in the rate and sometimes "commission" on top!

Think you mean the "Clarity" card. If you're only going abroad for a week or two the interest will be fairly trivial (well under 1% if you get their "typical" 12.9% APR), if you pay it off as soon as you get back.

Yes, indeed I do. You can even pay it back *before* coming home if you use on-line banking from an internet cafe or whatever[1]. You're not allowed to pre-load the card with a credit balance, but I believe you can transfer money from your current account as soon as the transaction shows up. Since the recent rule change, any money you pay to the card gets set against transactions carrying the highest interest rates - so the money you transfer will pay off the cash withdrawal rather than normal purchases.

[1] You'll have to pay the internet cafe, of course - maybe more than the interest you'll save - so do the sums. If you're using the cafe anyway - for emails etc. - you can do the money transfer at the same time for no extra cost.

I wouldn't log into my account from an internet cafe, not worth the risk/bother just to save a trivial amount in interest.

I tested the Clarity - withdrew 50 and paid 50 4 days later. Expected to be charged a few pence in interest but was charged nothing on my next statement. Maybe they have an amount below which they don't bother charging as is costs more to process the payment?

Yes, but the thing to watch out for is that payments are always set against stuff which is *on* a statement before stuff *not yet* on a statement, regardless of rate.

So for instance if your statement comes out on the 15th with 200 of purchases on it, you make a cash withdrawal of 100 on the 16th, pay

100 on the 17th, then pay your statement balance of 200 on the 30th, you will get charged interest on the cash withdrawal from the 16th to the 30th. The 100 you paid on the 17th would be used against your statement balance, not the cash withdrawal you made after the statement date.

It's easier to use a separate card for purchases - old Nationwide VISA cards are still free in Europe, plus from what I hear VISA rates are a bit better than MasterCard.

Yes, that's fair comment. So if you make a cash withdrawal after your statement has been issued but before your DD has paid it off, it may make sense to manually pay off the statement amount early, plus the amount withdrawn.

At very least, you need to pay off cash withdrawals - along with the smallish amount of interest charged - as soon as they appear on your statement. If you *don't* - e.g. by waiting for your monthly DD to be invoked - you'll end up paying *another* dollop of interest the following month, to cover the period between the statement date and the payment date.

Yes, that's fine for Europe - not so good outside Europe. I've got Nationwide cards which I acquired before going to New Zealand 3 years ago - a debit card for cash and a credit card for purchases. But meanwhile, they've moved the goalposts, so I opened a Halifax Clarity account before going to Australia recently. The Clarity card is the

*only* card I have which doesn't charge a transaction fee for either cash or purchases.

Another thing to watch out for is that some ATMs overseas now charge a fee for withdrawing cash when using a foreign card.

The banks in Thailand started doing this about 3 years ago, and charge

150 Baht (around £3) for each transaction. A few months ago banks in the Philippines also began charging, and take 200 Pesos (around £2.82) from each withdrawal.

No doubt banks in other countries will cotton on to this idea soon enough.

Chris

Yes, but IIRC the VISA rate is better than the MasterCard rate, and the Nationwide fee is only 1% so accounting for the interest you'd have to pay on the Clarity there is unlikely to be much difference.

I tried to compare the rates but the MasterCard forex calculator seems to be screwed:

My understanding is that using a Nationwide Visa debit card for cash withdrawals outside Europe results in a commission charge of 2% plus a transaction fee of £1 - so the Visa rate would have to be quite a lot better than the Mastercard rate to offset that.

I was talking about their old *credit* card for purchases (which IIRC is 1%), and using Clarity for ATMs.

Unless I'm mistaken, the Nationwide commission for credit card purchases in foreign currencies[1] is 2% - so Clarity's zero commission is likely to beat it even though it's Mastercard and not Visa.

[1] there seems to be some new deal whereby you can 'earn' £1-worth of commission-free foreign purchases for every £5 spent on UK purchases. Not sure whether that applies to 'old' cards - and it isn't very attractive for UK purchases anyway, 'cos there's no cashback.

We're going to be doing a lot of European travelling soon, and are looking for the easiest and cheapest way to use money.

We won't have a Euro-zone address to get a bank account to, so just UK account. I've had a suggestion of pre-paid Euro-denominated debit cards - any alternative suggestions, any particular supplier recommendations or avoids?

(My email works, if you prefer not to slag a supplier off publicly...)

(This time as a new thread, rather than a reply to a different one... What am I like?)

We're going to be doing a lot of European travelling soon, and are looking for the easiest and cheapest way to use money.

We won't have a Euro-zone address to get a bank account to, so just UK account. I've had a suggestion of pre-paid Euro-denominated debit cards - any alternative suggestions, any particular supplier recommendations or avoids?

(My email works, if you prefer not to slag a supplier off publicly...)

This is not a personal recommendation, I'm afraid, since I haven't had occasion to use it, but I had bookmarked it for future use. Caxton

might suit you as the Global Card is not tied to the ?. That way you would have the flexibility to travel with one card to the many countries which are still outside the Euro-zone.

Nationwide used to be good - but now charge commission on non-sterling transactions, plus a transaction fee for cash withdrawals.

A Halifax Clarity credit card is probably the best bet. There's no commission on either purchases or cash withdrawals - but you will have to pay interest on cash withdrawals, so it pays to pay them off straight away. If there are two or more of you, it may pay for each of you have to have a separate Clarity account, and to use one for purchases and the other for cash. That way, you can be sure that when to transfer money into your 'cash' account, it goes to pay for the cash and not for previous purchases (which are interest-free anyway, as long as you pay in full each month).

That's for their new card, not old ones.

The only charge on their old credit cards is the VISA charge which IIRC is 1% outside Europe and 0% in Europe. See below - note no mention of any forex charges except charges imposed by VISA in 7(d).

Agreed, unless the OP already has a Nationwide CC in which case see the other thread.

But there's a limit to how much it's worth micromanaging - if you get the typical 12.9% APR and set up a DD to pay it in full every month, you'll pay around 1% interest on cash advances. If most spending is purchases (which will be interest free), with only a small amount in ATM withdrawals it probably isn't worth messing around with a separate account.

Problem with that is the exchange rate you get is 2.5% worse than the interbank rate - compared with a Halifax Clarity credit card which uses the actual interbank rate.

You also have to pre-load the Caxton card - and if you put too much on it and want to recover some, refunds are quite expensive.

Agreed, but watch out for the interest charges. The interest shown on the statement covers the period between the withdrawal and the statement date. But the DD doesn't usually happen for another 25 days or so, so you get hit with *another* interest charge on your next bill.

[I found out the hard way!]