credit/debit cards

[Brian Kirby]

The thing to watch is that the various card issuers all have differing rates. Some examples, based on today's (15/07/2012) exchange rates using Nationwide Debit card (linked to Flex Account) and Nationwide Select credit card (both Visa) and Post Office online.

 

Visa rate of exchange = 1.273141. Same rate for cash or goods, debit or credit.

 

Credit card: 2.5% handling fee subject to minimum of £3.00. Interest from date of withdrawal until balance cleared: 27.9% APR. Maximum 56 days interest, minimum 25 days, assuming balance is cleared monthly.

 

So, for €500 you would pay £392.73 + £9.82 commission + from £16.81 interest over 56 days = £419.36, to + £7.50 interest over 25 days = £410.05.

 

Debit card: 2.0% commission + £1 per transaction handling charge.

 

So, for €500 you would pay £392.73 + £7.85 commission + £1 = £401.58.

 

On the other hand, if you went to buy the same amount online from the UK Post Office (min £400), you would get 1.2310 exchange rate, money delivered free to your house, total cost: £406.17.

 

So, Nationwide debit cheapest, hotly followed by Post Office online, followed by credit card.

 

The best credit card deal (25 days interest) requires your transaction to hit Visa's system on the last day of the accounting period. My guess is that if you buy on a non-banking day, they won't debit your account until the next banking day, meaning you could instead incur 55 days interest at an APR of 27.9%!

 

However, even better is to buy goods direct with the credit card wherever possible, as a purchase to the same value would cost you just £392.73.

 

This should be borne in mind when dealing with the likes of Aldi, who don't take credit cards. Yes their prices may be lower, but you incur the commission and handling costs to be able to pay cash, so they may not be any cheaper overall than buying at a place that will take cards and paying more for the same items, but getting a better exchange rate.

 

Even so, if you were to spend €4,000 on a trip, the difference between the best (buying on credit card) and the worst (drawing cash on a credit card consistently at the worst time) way of buying currency, based on the above rates, would only be £213, and you have to be pretty daft or unlucky to always get the timing wrong.

 

Since the credit card means you don't have to carry much cash, and is cheapest overall, I'm inclined to pay with the card, put up with the odd grocery or restaurant bill consequently being higher, stop worrying over smallish sums of money, and get on with enjoying the trip. To compensate, I always buy fuel at French supermarkets, because that is invariably where it is cheapest! :-D

[Guest JudgeMental]

I nearly managed to read all that Brian...but need to go lie doen for a bit. Will try again later! :D

[Mel B]

Brian ... if you used a Caxton card you wouldn't be paying any interest or transaction charges at all!!! :D

[Brian Kirby]

Mel B - 2012-07-15 6:07 PM

 

Brian ... if you used a Caxton card you wouldn't be paying any interest or transaction charges at all!!! :D

And the exchange rate is?

[Brian Kirby]

JudgeMental - 2012-07-15 4:52 PM

 

I nearly managed to read all that Brian...but need to go lie doen for a bit. Will try again later! :D

Silly boy! :-)

[Bulletguy]

I use Nationwide Credit and Debit.

 

Credit card for purchases such as fuel etc, Debit for cash withdrawal but draw the max allowance as they now charge a fee for each withdrawal unfortunately.

 

Credit card doesn't incur any interest charge if total monthly figure is paid, if you go over....they will charge. I set up DD payments to my credit card for more than I will spend to avoid any interest charge. The remaining surplus will get transferred back to my current account.

 

To avoid carrying too much cash I now use a pre-loaded Cash Passport card.

 

http://www.cashpassport.com/

[Mel B]

Brian Kirby - 2012-07-15 7:53 PM

 

Mel B - 2012-07-15 6:07 PM

 

Brian ... if you used a Caxton card you wouldn't be paying any interest or transaction charges at all!!! :D

And the exchange rate is?

 

As of this minute it is €1.2425, the beauty is though that you can load it whenever you like so when the rate is good you can get your dosh then and you know EXACTLY what you have to pay for it there and then, not wondering what it will have cost you when you get back.

 

It may not be as high as some of the other rates (although sometimes the difference is less than 1c) but the same €500 would cost £402.45. You really need to be spending a heck of a lot of money to have a massive difference between all the forms of getting cash, at the end of the day it's up to each individual to choose which method to use.

[Brian Kirby]

So between Nationwide debit, which is slightly cheaper, and Post Office online, which is a bit more expensive. When to buy is a gamble: buy up front and the exchange rate may improve, buy as you go, and it may fall while you are away. In essence, that is why I largely can't be bothered, other than to find a reasonably cheap provider.

 

Halifax Clarity does look good, especially as getting the cash on a credit card limits your potential risks vis a vis debit cards, you pay the same rate for cash as for purchases, and the exchange rate with Mastercard is within a gnats of the Visa rate. In fact, at a guess, it may be marginally better, even after interest, than your Caxton card when the difference is exchange rate is factored in, but still hardly worth getting excited about.

 

However, I rather think Maggy will be unhappy when she sees what her cash on NW credit card has cost her. Oh dear! :-)

[Tracker]

Has anyone with experience of these things any comment to make on this selection of cashcards please?

 

http://www.moneysupermarket.com/prepaidcards/

 

 

[maggyd]

jonsea - 2012-07-13 12:53 PM

 

Hi we use Nationwide credit card and it is paid of every month no charge.

 

 

We were talked in to getting the Nationwide Credit card :-S No charges we were told !! rubbish we had set up a direct debit so it was cleared every month, as I was using it for cash withdrawals we were charged and I reckon it was more than we were charged for the debit card last year!! incidentally it was refused in many places we shopped >:-( we had to buy a new TomTom and had to pay cash both cards were refused.

 

Both our credit cards are now shredded.

[maggyd]

Brian Kirby - 2012-07-16 1:03 PM

 

So between Nationwide debit, which is slightly cheaper, and Post Office online, which is a bit more expensive. When to buy is a gamble: buy up front and the exchange rate may improve, buy as you go, and it may fall while you are away. In essence, that is why I largely can't be bothered, other than to find a reasonably cheap provider.

 

Halifax Clarity does look good, especially as getting the cash on a credit card limits your potential risks vis a vis debit cards, you pay the same rate for cash as for purchases, and the exchange rate with Mastercard is within a gnats of the Visa rate. In fact, at a guess, it may be marginally better, even after interest, than your Caxton card when the difference is exchange rate is factored in, but still hardly worth getting excited about.

 

However, I rather think Maggy will be unhappy when she sees what her cash on NW credit card has cost her. Oh dear! :-)

 

 

YOU ARE SO RIGHT BRIAN. :-D never believe what the cashier tells you is my motto from now on!!!

[Tracker]

http://www.saga.co.uk/money/saga-credit-card.aspx?tab=exploreDetails&subtab=save%20money%20abroad

 

Saga Platinum Card has 0% charges for all UK and foreign purchases which seems pretty reasonable to me.

 

The exchange rate is calculated by Visa so is likely to be the same as every other card using Visa.

 

The charges for using the credit card to withdraw cash - both GBP in the UK and Euros in the Eurozone - proved impossible to find in print but in a phone call to Saga I was advised that it is 1.6% with no minimum and again the exchange rate set on the day by Visa.

 

This contradicts the Saga terms booklet which states 2% for cash withdrawals and again does not appear to differentiate between UK and abroad, but the guy I spoke to was adamant that 1.6% was correct?.

 

Some cards not only charge a fee for purchases abroad, plus an even bigger fee for drawing cash in the UK, plus an even bigger fee for cash abroad, but they also charge you interest on any cash drawn right up to the day it is repaid in full and in this respect Saga appear to be more generous than most?

 

Sounds too good to be true - and we all know what that usually means?

[maggyd]

We paid £6.09 on every 300Eur we withdrew and £5 interest even though we set up a standing order to pay the account off in full every month . :-S nothing on purchases although as I previously said not everywhere will accept payment by credit card only lidl in France and SuperU allowed it.

[Tracker]

We always carry cash and use it mainly when card purchases fail.

 

As we start heading home, I try and keep enough Euros in hand to buy enough diesel to at least get us back to the ferry port - that way I know I don't have to worry.

 

We also make a point of filling up at just below half tank then if the cards fail we still have enough diesel to find another filling station, or a cash machine or a bank, where one or other of the cards will work.

[lennyhb]

Brian Kirby - 2012-07-16 1:03 PM

 

So between Nationwide debit, which is slightly cheaper, and Post Office online, which is a bit more expensive. When to buy is a gamble: buy up front and the exchange rate may improve, buy as you go, and it may fall while you are away. In essence, that is why I largely can't be bothered, other than to find a reasonably cheap provider.

 

 

My thoughts exactly, that's why we stay with Nationwide, their Credit Card give excellent exchange rate without loaded charges. Although they now charge for drawing cash on the debit card an extra five to ten quid on a 3 week holiday not exactly going to worry most Motorhome owners. Last year 3 weeks in France we spent less than 200€ in cash.

 

Another point most of the banks that do not charge for foreign transactions require you to pay regular amounts into the account or keep a substantial balance at some paltry interest rate. Our Lloyd's current account pays 3.5% so we prefer to leave our money there.