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Your Money > Credit Cards Articles > How much is...
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By Sarah Modock
Britons "It is disappointing to see how much some high street banks are charging when compared with Nationwide and HSBC," says Rob Kenley of moneysupermarket.com. "Nationwide doesn't levy a purchase fee or a currency conversion fee, which is the way it should be. It seems quite unjust for five major banks to be hitting holidaymakers with a 2.75 per cent currency conversion fee and a purchase fee of between £1 and £1.50 per purchase. It should be Britons enjoying their holidays, not the banks enjoying our holidays at our expense. Anyone having a European break this summer should take a good look at our table and wonder if they need a more holiday-friendly debit card." Total cost of making ten €25 debit card purchases
Make sure that you're getting the best credit card deal People with these expensive debit cards should also consider other products such as credit cards, foreign currency or prepaid cards for the best travel money deals available. Nationwide, again, and the Post Office came out on top with their credit cards, while Travelex offers some of the best foreign currency, travellers cheques and prepaid card deals. Total cost of making ten €25 purchases
XE.com used for exchange rate because UK banks' foreign currency exchange rates are normally set by card payment associations, ie. Visa or MasterCard, however the banks can apply their own exchange rates. Exchange rate of 1.431 used for Travelex. Source: moneysupermarket.com 05.06.2007. Credit cards Using credit cards abroad can be expensive, with providers adding on a surcharge, typically 2.75% as well as a fee of around £1.50 if you use ATMs. Another drawback of taking out cash on your credit card is that you start paying interest the moment you withdraw it - the 56-day waiting period applies only to purchases. 'Anyone using a Nationwide FlexAccount debit or credit card will not be charged any foreign usage fees,' says Nationwide's Stuart Bernau. One other thing to watch out for is dynamic currency conversion, where an overseas transaction is converted into sterling before being charged to your card. The exchange rate will often be unfavourable. 'Ask to be billed in the local currency.' Bernau advises. This also avoids any currency exchange mark-ups by the retailer. Make sure that you're getting the best credit card deal Currency If you are using a debit card to buy currency at the airport in the UK, you could save money by withdrawing the sterling and changing the cash instead of using your card as some foreign exchange counters charge for transacting on plastic. But to get the best deals, don't leave it until the airport, which usually offers the worst exchange rates. You could save more than £5 for every £100 you take out by planning ahead. Some high street banks, building societies and travel agents plus the Post Office, Marks and Spencer and Lloyds TSB all sell commission-free foreign currency. Of course you will still need to compare exchange rates. "This year travellers will find an abundance of commission free currency deals, with only a handful of branch and telephone services charging an upfront commission fee," says Lisa Taylor of best buy site Moneyfacts. "This is great news, as travellers will avoid paying these fees, which previously ranged between two and three percent of the order. However this now makes the exchange rate the key factor in determining the best deal. It is something that is not easily searchable without trawling individual providers websites or even more time-consuming, making phone calls or visits to the branch." Moneyfacts has done some mystery shopping which how much exchange rates differ. Euro exchange rates they compared on May 19 varied from 1.38 (Thomas Cook) to 1.41 (Travelex and HSBC) and everything in between. For dollars, the range went from 1.87 (Thomas Cook and Lloyds TSB) up to 1.91 (Travelex). However, if you left buying your currency until you got to the Travelex bureau in Heathrow airport, for example, you would have received a lower exchange rate of 1.38 for Euros with 1.5% commission on top. Try online currency services for commission-free currency, delivered to your door (£5 by registered post) or available for collection form your chosen airport, seaport or railway station. Order online with Travelex and they guarantee to give the best rate available or refund the difference. Travellers' cheques Travellers' cheques may have a bit of a 1970s image but they can still be very useful if you don't want to carry a large amount of cash. They cannot be beaten for security but if you are heading off the beaten track, make sure you will be able to change them. Cheques can usually be stopped or replaced within 24 hours if they are lost or stolen, whereas credit cards can take much longer. But you must keep a separate note of serial numbers to take advantage of this security feature. When you buy cheques, read the accompanying security advice and make a note of any numbers you need to call in the event that you lose cheques or have them stolen. Bear in mind that they may not be the cheapest option; commission charges, both when you buy them and use them. Exchange rates can also vary wildly. Portugal and Spain are known to charge high commission fees for changing euro cheques - sometimes as much as 8%. Some Spanish banks require a 15 euro flat fee. |
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