The best way to exchange and carry your money- the ultimate answer
Replies: 44 - Last Post: May 9, 2013 11:20 AM Last Post By: MTL
Jun 18, 2012 12:55 PM
15Overall good advice although it is incorrect in one major respect MTL.
First, check this thread http://www.lonelyplanet.com/thorntree/thread.jspa?threadID=2121318
You will see that I disagree with your comment that "Remember this: you will NEVER pay the interbank rate. Banks use a different rate and this is how they make money."
In fact it is entirely possible to get a card that gives you the Interbank rate (not in all countries however) and charges no other fees at all. Posters on the thread link above have given examples of banks in the UK, the USA and Australia that all give totally fee free exchange at the Interbank Rate.
Regarding making it a sticky, the basic question has been asked and answered on pretty much every branch (including on the link above and none have been made into a sticky by the Mods. Why I don't know. But your OP as stated has a major flaw as noted and would need to be re-written before it could be considered for a sticky.
Hobbittr, it seems you are looking at it only from your own narrow viewpoint of someone who does not travel a great deal. You refer to a holiday but try thinking as if you were someone who either goes on a extended travel (months/years) or travels often.
I estimate that over a 10 year period using the right cards with NO FEES including exchange fees has made a difference to me of somewhere around 4.5% on say $100,000 as a business traveller and the same as a tourist. That amounts to $9000 in 10 years. Now tell me it isn't worth the hassle.
Even for your average Gap Year traveller who spends say $20k it would amount to $900. That's a lot to them. Yes it may not make sense for someone taking a 2 week vacation but not everyone does just that.
Jun 18, 2012 1:48 PM
Jun 19, 2012 12:57 AM
17travelinstyle46 you added an welcome addition to this posting, thank you.
You wrote: "Hobbittr, it seems you are looking at it only from your own narrow viewpoint of someone who does not travel a great deal. You refer to a holiday...Yes it may not make sense for someone taking a 2 week vacation but not everyone does just that."
Yes, I was referring to the "average" tourist to which the TT forum advisors seem to devote most of their time.
I guess I "qualify" as someone on "extended travel" because I am retired and live in Turkey and use an ATM for money transfers. (The US government will not allow direct deposits to Turkish banks.)
Jun 19, 2012 7:30 AM
18What is your home country hobittr? Given your situation, finding the best card to use certainly makes sense. If you are paying ATM useage fees and exchange fees you could certainly benefit from an account somewhere like the Metrobank in London who charge no fees whatsover including any loading on the exchange.
Jun 19, 2012 7:34 AM
19MTL, it has occurred to me that you may have missed that it is possible to get the Interbank rate as it is not possible in your home country perhaps. I can't remember what your home country is. It is not possible in Canada for example. Best that can be done there appears to be around 2.5%. That's why I keep an account in the UK where I can get it. I transfer funds from my Canadian account to my UK account using a Forex company (Moneycorp) every once in a while. That costs me 1%. Then I use funds in the UK account for travel and that costs me 0.
Jun 19, 2012 12:15 PM
It doesn't matter much to me personally as i have account in a number of countries so i can withdraw in 3 major currencies without any conversion costs.
They also often have enormous misconceptions about how exchanging money works (like thinking that if you walk into an exchange bureau you get the rate that's published in the newspaper) that i wanted to address.
So i will concede that it may be possible to get the interbank rate (still not entirely convinced- your link shows that in the UK nationwide no longer does it and i can't find a link on the Capital One site that confirms this practice (although there are many discussions that mention this bank when Googled).
the point is that 99.9% of cards and transaction methods out there accessible to the general public do NOT use the Interbank rate- something newbies rarely realize.
Jun 19, 2012 12:34 PM
21I agree that most have misconceptions as you say and most accounts do not give the Interbank rate. I would disagree that it cannot benefit infrequent travellers however if they can get it.
If you take an average couple who just go on a sun and sand vacation once a year for 2 weeks as an example, consider these numbers. Suppose they live in the UK and bank with Barclays or HSBC currently. By switching their account to Metro Bank in London for a debit card and get a Halifax Clarity credit card, they can save signifigant amounts over time.
Let's say the average UK couple spends 3,000 GBP on a holiday. Times 10 years that's 30k. If they are currently losing 4.5% to Barclays et al, that totals 135 GBP per year and a whopping 1350 in 10 years. Even the loss on their 2 week vacation is enough for a very nice dinner or a few lunches.
While it will not have as much advantage to an infrequent traveller, the numbers for say a Gap Yearer who is going to spend that 30k in one year become very signifigant.
Re: "(still not entirely convinced- your link shows that in the UK nationwide no longer does it" Read here:
http://www.moneysavingexpert.com/travel/cheap-travel-money You will see several 'perfect exchange' cards both in the Credit cards and debit cards.
Jun 21, 2012 1:06 AM
22travelinstyle46 asks: "What is your home country hobittr? Given your situation, finding the best card to use certainly makes sense. If you are paying ATM useage fees and exchange fees you could certainly benefit from an account somewhere like the Metrobank in London who charge no fees whatsover including any loading on the exchange."
I carry a United States passport with a long term residence permit in Turkey. No other citizenship or legal affiliations. Out of curiosity I contacted Metrobank. Just as I expected, they made it very clear that I had to be a citizen of the UK and prove that I was living there in order to open an account.
I have an account with HSBC in the States to receive my retirement direct deposits. I was able to open that account through our HSBC branc in Istanbul a few years ago. HSBC charges me a fee $2.50 USD for every ATM transaction. Therefore I take out a maximum amount each month to avoid the transaction fee.
Our local Turkish banker at Yapı Kredi (no HSBC in Kaş) said that HSBC determines the rates when I do an ATM transaction. Perhaps one of you money experts can tell me if I am getting an OK deal or not?
Jun 21, 2012 8:30 AM
23I am pretty sure you could do better as HSBC does not give you the Interbank Rate on exchange as well as charging you the ATM useage fee hobbittr.
The two names that crop up for the USA are Charles Schwab and Capitol one. Here is an article (but out of date) that gives more info. http://medicaltravelsite.com/blog/2007/05/29/money-matters-foreign-money-fees/
However, which is best today is a moving target to some degree. Banks do change their terms from time to time and so it is always prudent to do your own research to find which has the best offer today.
If you do a search here (top right of this page) for 'Charles Schwab' and 'Capitol One' you will get lots of threads that purport to explain what both offer (or did in the past). There are claims that both charge no exchange loading and no ATM useage fees. Also do a search for 'US travel money' and see what you find. You will see there is a lot of misconceptions and also mis-information posted about this subject.
Bottom line, it appears that a US citizen does have the possibility of finding a totally fee free account. As you are in effect exchanging your entire year's income every year now, it certainly would seem to make sense for you to invest a bit of time in finding the best deal. Even a 1% better exchange rate would save you $100 on every $10k you exchange. That's dinner and a show anywhere hobbittr. HSBC doesn't appear to be the worst to use but they don't appear to be the best either.
By the way, one of my 2 sons is an Associate VP with HSBC here in Canada and doesn't attempt to tell me who to use for travel money. He knows his bank is not my best bet.
But I will warn you that often it is very hard to find the actual exchange loading for any given bank. It is almost always well hidden in the fine print so you have to persevere and dig. Nor does phoning and asking necessarily get you the answer. For example, often people post here saying they phoned and were told something like, 'the exchange rate is dependent on the Interbank Rate on the day of your transaction'. Note that does not say you GET the Interbank Rate. Or they get told, 'We charge no fees on International ATM withdrawals'. But that actually refers only to the ATM usuage fee. Often the person you talk tp really doesn't know any more than the average Joe about exchange rates. Often, people hear what they want to hear.
Jun 21, 2012 12:34 PM
24It's CapitAl One, TiS. For somebody who likes to correct people on the correct pronunciation of the name of the city known as 'Nice', this slip is disappointing.
I looked at some of the links. On the Schwab site I could only find that their visa card charges no ATM fees, it doesn't say anything about the exchange rate load. I see loads of article and blogs that talk about these cards but no links that actually link to a bank's description of the card and list the 'no exchange rate load' as one of its benefits. The MoneyMatters post is 5 years old....
So far it's like finding the Yeti; it may exist, many people claim sightings, but so far no single living Yeti has been captured...
Jun 22, 2012 8:18 AM
25MTL, are you still not accepting that totally fee free and exchange loading free cards exist?
I noted the 'money matters' article was out of date and that it is a moving target which means you need to do your research today to find the best deals. The moneysavingexpert link (response #21) is current and clearly shows you several providers who offer what he calls the 'perfect exchange' cards. Why would you comment on one link but not the other?
The question of whether it exists is NOT like the Yeti. The existence of such cards is not in question at all. Finding them is simple in some cases such as for UK residents since the information is readily available on sites such as moneysavingexpert. Finding them in other countries may also be simple or may not be. As I also noted, in the last paragraph of #23, it can be very difficult to find the information.
Here is a thread from 'flyer talk' which I find has a lot of well-informed frequent flyers who post regularly. The thread is just one of many you can find there on the subject of cards and exchange. It is a useful forum on which to look for primarily USA related information. http://www.flyertalk.com/forum/travelbuzz/1236765-exchange-rates-foreign-atm-question.html
Jun 22, 2012 12:08 PM
My original answer was aimed at the average person who posts an query here about how to exchange money. Given the amount of research required to find a card like that, it seems that it is not probable, although it may be possible (a distinction I know you love to make) that such a person would end up paying the interbank rate.
And in any case, it doesn't change the basic premise of my OP- that debit cards are the best option. So as is often the case, you are splitting hairs about something that has little relevance to the majority of readers out there.
Jun 22, 2012 1:41 PM
27The average poster does not realize these differences exist and if you are going to post suggesting a 'best way - ulimate answer' then it is incumbent on you to provide just that. The best, not the easiest or what is acceptable to most people but is not the 'best'. Let them decide if they want to bother doing the research to find the best in their home country but let them know what is possible. Do not make a statement that they will not get the Interbank Rate when in fact that may not be true. The correct statement is you MAY or MAY NOTget the Interbank rate, you need to do the research to find out.
I don't see why you want to dwell on this. You didn't know, therefore you left it out. Now you know better and can include it. It's simple and not really debateable. I think you are now attempting to 'hair split' by saying, 'no I'm not questioning it exists but I want to see a link for it. Either you accept it or you don't.
Jun 22, 2012 2:36 PM
Jun 23, 2012 9:56 AM
29I'm not about to spend my time digging through Terms and Conditions to satisfy you MTL. On this link http://www.moneysavingexpert.com/travel/cheap-travel-money a well respected travel journalist has stated what is available in the UK. You can believe him or not, it's up to you. I know I have one of the cards and get 'perfect exchange'.
A link provided by someone to an Australian equivalent is http://www.28degreescard.com.au/?gemid1=May11-28deg-SEM That site states on the home page:
Enjoy the freedom of the only Australian credit card¹ with no annual fees, no currency conversion fees and no international transaction fees. Travel smarter, anywhere, everyday using 28 Degrees MasterCard.
They aren't that hard to find MTL, just accept it and move on.
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