Going abroad this summer? What I've found to maximise exchange rates
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Going abroad this summer? What I've found to maximise exchange rates

18
Found 25th Apr 2014
Prompted by the Travelex deal posted earlier today.

I just signed up for an Amex Gold Card and had it delivered today as I'm off on a long trip and thought I'd find benefit in the included cancellation insurance and free airport lounge access twice per year (£15 for additional).

The card is normally £125 per year but its free at the moment. I'll cancel it down before it renews. Already put an alarm in my phone.

I have a Halifax Clarity card that offers $1.68 to the pound with no fees per transaction that's heavily promoted by moneysavingexpert.

I'm planning on buying a £1,000 MacBook during my trip.

I called today to ask about using my Amex abroad and was quoted a rate of 1.708 USD to the GBP. According to the CSA on the phone this included 1.5%. Buying abroad carries a 2.99% fee so he told me the $25 for the 1.5% cold be doubled to $50 (for commission). Resulting in approx. $1,683. Pretty much the same as Halifax.

However the Amex has the bonus of double points for every £1 I spend abroad so I'd get 2,000 points (5,000 qualify for a £25 of M&S vouchers so roughly £10 I've earned in points).

Also if I spend £2,000 within 3 months of opening my account I get 20,000 Avios points (enough for 2 short BA return trips to Europe).

I found that I'll use my Amex when able for anything abroad, if I need cash I'll use the Halifax Clarity card as there are no fees for using an ATM other than the local fee charged and approx. £1 interest per £100 lifted from an ATM. The clarity is a better option than carrying a lot of cash until you can access a room safe.

18 Comments

Original Poster

A post (now deleted) suggested that 1.708 was maybe incorrect. It what I was quoted at 17:00 when I called them.

However this website does make me roll my eyes at times. All those voting negatively back up why you are doing so or demonstrate a better deal.
Edited by: "scameron77" 25th Apr 2014

Hot from me :). but probably not relevant to everyone hence why cold?

Original Poster

Relevance has nothing to do with it, I've witnessed a £10,000 Nikon lens get to 2,000 degrees. Too many people on here are one sandwich short of a picnic.

If you use your Amex card abroad, you are charged the standard loading fee (2.75%) PLUS any non US dollar trasnactions are first converted to dollars before being converted into pounds sterling. There are many cards that charge no loading fee at all.

There's some confusion over exchange rates here. Both Halifax and Amex will use roughly the same rate - the interbank exchange rate. It's currently sitting around 1.683. So, £1000 is $1683.

Halifax don't charge you a forex fee so $1683 translates directly into £1000.

Now, the confusion comes because the rate you've been quoted is the rate for converting GBP into USD. If you were to put £1000 on a USD card, you'd be charged $1683 and then another 1.5% ($25) on top giving a total charge of $1708 and an effective exchange rate of 1.708. What you want is the reverse ... if you put $1683 on a GBP card you'll get charged £1000 + 1.5% (£15) giving you a total of £1015 and an effective exchange rate of $1683/£1015 = 1.658 USD to the GBP. At 2.99% you get an effective exchange rate of $1683/£1029.99 = 1.63 USD to the GBP.

Nice to hear someone sensible doing their homework so hot methinks. Side point, have you checked you won't have to pay duty/VAT this end for bringing back to UK? Not sure of rules, but if you use it in the US and it shows signs of genuine use and you are bringing it as a used item that you happen to had to buy when you were out there, not fresh in the box with receipts etc would you be ok? ie arent there limits of a few hundred pounds of shopping gifts etc. I'm sure you're on the case, just random late night thought in case not thought of if it helps

the Macbook purchase I'm on about...

Clarity card you also get £5 cashback spending when spending £300 a month (if you hold a reward account with them). Also the difference in rate is likely due to the different times you got quoted for the rates.

It's also worth remembering that, although you'll be paying £30 more for using the Amex over the Halifax card, the Avios are worth much more than that. If you're not going to hit the £2k spend without the MacBook purchase (and without getting 'creative') then it's probably a fee worth paying.

Just to make sure you know, the cancellation insurance is only valid on holidays purchased on the gold card.

Original Poster

pcf

Nice to hear someone sensible doing their homework so hot methinks. … Nice to hear someone sensible doing their homework so hot methinks. Side point, have you checked you won't have to pay duty/VAT this end for bringing back to UK? Not sure of rules, but if you use it in the US and it shows signs of genuine use and you are bringing it as a used item that you happen to had to buy when you were out there, not fresh in the box with receipts etc would you be ok? ie arent there limits of a few hundred pounds of shopping gifts etc. I'm sure you're on the case, just random late night thought in case not thought of if it helps



I don't know exactly, I think I could justify need based on the fact a bit of my trip is business/education related. I'd appreciate it if anyone could clarify further. I certainly hope customs wouldn't got so far as to check a serial number for country of origin.

The phone call to Halifax and Amex was 30 minutes apart, as marble kindly pointed out, the %'s applied make the difference. Upon reflection the CSA didn't appear to know the how to apply things, I was relying on their advice, not ideal.

Not exactly a deal is it? More like advice for a very obscure idea. Each to his own, but not hot for me.

it's a hornets nest when dealing with exchange rates/commission/fees,

holiday firms are the worst, claiming no fees bet their rate is way below quoted.

personally I don't care, usually take GBP if going abroad as a few hundred will not make much difference on the grand scale of things.

however if I had a load of money to change then there could be profit to be made.

as usual, it's the public that take the hit!

I get this card for the Airport lounge pass alone. When you cancel you can reapply after 6 months. We go away next month so have just got another one for me and one for the husband too. 4 free passes into the VIP lounge makes the start of the holiday a bit more exiting for the family!

You also get cashback through TCB for this card. I've just been paid £20.20 for the two cards.

ripoffh8er

I get this card for the Airport lounge pass alone. When you cancel you … I get this card for the Airport lounge pass alone. When you cancel you can reapply after 6 months. We go away next month so have just got another one for me and one for the husband too. 4 free passes into the VIP lounge makes the start of the holiday a bit more exiting for the family!




Check the impact on your credit score...

I load cash on a FairFX card before going abroad. I then get it out in largish chunks ( because of the £1.50 a time charge) from ATM. I use a clarity card for all purchases.
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