stokebailey

What's the best way to handle everyday money for 4 months' stay in London? Start local account? Use ATM's?

janisj

For just one semester -- they usually keep their current bank/account back home and use their ATM card to get cash when needed.

For longer term stays there are other options but there are hoops to jump through to get a UK account and for just 3 or 4 months that wouldn't be necessary.

stokebailey

Thanks, Janis!

alanRow

Depends on if you are going to be doing paid work or not whilst in the UK.

If you are then you'll have little choice but to open a UK account - you should be able to do it via the UK education establishment.

If you aren't then look for an account that has low fees for overseas withdrawals - and allow your parents access to it to feed money as needed

janisj

I don't think the OP is the student

stokebailey

That makes sense, alanRow. Thank you.

dulciusexasperis

The answer is to use an American credit card for purchases and a debit card to withdraw cash.

Here is a good explanation in simple terms of why it matters WHICH cards the personn uses. As you will see, it is out of date but the explanation is still quite relevant.

You'll see that using Wells Fargo credit cards for example will cost you 4% more than using a card with no exchange fees. Which cards are best varies from year to year and you need to find which are best this year.

http://usatoday30.usatoday.com/trave...dit-card_N.htm

colonna

Your bank may have a relationship with one in the UK. For example, Bank of America customers can withdraw money from a Barclay's ATM without fees, saves a lot.

Alec

But you will still be hit with exchange rate charge, which can be up to 3%. So find an account that charges no withdrawal fee and no exchange fee/loading.

stokebailey

Thanks, dulcius, and I like your name.

And good tips, colonna and Alec. Our bank kept wanting to tell me to be afraid of what the UK ATM might charge, was harder to pin down on what the home bank does.

fmpden

Another thing that you may not have thought about is who is on the account being used by the debit card. When our son did a semester abroad program he used the university's credit union. An account that he had opened by himself. While in Spain a problem developed with his accounting being frozen. He had limited telephone access (15 years ago)so I tried to intervene and, of course, because of security they would not give me the time of day even as his father. Finally with the help a high credit union officer I finally was able to resolve his problem. The response from the officer, "I really should not be doing this but ...." It worked out. When the next son went abroad I made sure I was on the account. He had no problems.

Using a debit card at a bank owned ATM solved all of his cash needs. Now with on-line access for second son, we could watch his account carefully.

dulciusexasperis

Stokebailey, when you write, "Our bank kept wanting to tell me to be afraid of what the UK ATM might charge, was harder to pin down on what the home bank does.", that is a common comment to read and oh so very wrong.

Visa and MC do NOT allow a UK bank to charge you a fee for using their ATM if you are a 'foreigner'. It is only YOUR bank that charges you for withdrawing at a UK atm.

The only exception is private ATMs such as those found in gas stations etc. But an ATM outside a bank in the UK cannot charge a fee against a US debit card. End of story.

So in fact, your bank is LYING to you when they suggest otherwise. Any 'transaction fee' (fee for using an ATM, typically $5 per transaction) or 'exchange loading' (typically up to 3% plus Visa/MC's 1%) is done by YOUR bank.

Colonna's comment highlights another misconception. Alec's comment corrects that misconception. The 'withdrawal fee' has nothing to do with the 'exchange rate' used by your bank. An 'exchange loading' of 3% is not at all uncommon and that goes on top of the 1% that Visa/MC charge for use of their system.

Fmpden also makes a good point.

So find a bank with no 'transaction fee' and no 'exchange loading' and put both your name and your son/daughter's name on the account.

Someone going on a 2 week vacation in the sun where they have already pre-paid the air and hotel from home and so have only expenses to cover while there, may not feel it is worthwhile to find the best cards to use. They will only exchange a limited amount of money.

However, someone who is going to be away for several months or more or who will travel numerous times per year, should be making sure they have the best cards they can find for a traveller to use.

If you exchange $10k a year every year for 10 years at a cost of 4%, that is $4000 you will GIVE to your bank for next to no work on their part. If your son/daughter only exchanges $4k in 4 months, then it is only $160 but it is $160 of YOUR money that you could have avoided paying your bank.

KTtravel

Very good point about a parent also being listed on your son's account. When our daughter was away, her credit card account number was changed by the bank (her account had possibly been compromised.) It was difficult for me to deal with this issue with the bank as I was not named on her account but, fortunately, I had been a long time customer so they "made an exception."

PalenQ

So folks above are saying that I cannot just go to England like I did a few decades ago when I was running tours in the U K and open a bank account - at that time I just went in showed my ID (passport) and there was no problems - even with opening an off-shore Jersey account.

So now I could not just go into say Barclays and boom open an account like I have done several times before but long ago?

historytraveler

Pal you couldn't even do that 15 years ago when I lived there.

Ackislander

No, PalenQ, you can't. You also can't carry more than $10,000, into or out of the US without declaring it. Things change.

What worked for us -- repetitive, but I hope succinct -- when our daughter and son were studying abroad:

a joint account with their mother at Bank of America. No fees at correspondent bank, and Mom could deposit money in the UK which they could get without fees in Scotland and France respectively.

I would ask the bank for an ATM card rather than a debit card. Banks don't advertise them because they don't make any money on them, but they are safer than debit cards.

janisj

Was likely more than a 'few' decades ago. Time speeds by as one ages

Stokebailey: Probably having/opening a joint account at BofA would be easiest/best. Simply because they are partners w/ Barclays and don't charge the pre-transaction ATM fees.

dulciusexasperis

Be careful when using terminology that may be familiar to yourself but not universal. Not all readers will realize there are differences.

For example, 'ATM card' vs. 'Debit Card'. In many countries, there is only a 'debit card'. In some countries a 'cash card' can be used at ATMs but cannot be used in a store to make a purchase, unlike a debit card.

A major terminology difference that some banks use to confuse their customers is 'transaction fee'. In some countries an 'ATM transaction fee' refers ONLY to the fee per withdrawal that your bank may charge. Typically, a fixed amount of a few dollars per transaction. It's an ATM 'usage fee'.

In other places a 'transaction fee' may refer to a percentage that your bank adds on to the amount you exchange either when making a purchase or using an ATM. Typically, from 2-4% in addition to the 1% that Visa/MC charges. It's an 'exchange loading' charge.

Some banks will advertise, 'no foreign transaction fees' when they are in fact ONLY referring to the ATM 'usage fee'. They get away with this because legally, a 'usage fee' is a fee while 'exchange loading' is not a fee as such in legal terms, it is about the exchange rate they use.

In many bank card agreements you will find in the fine print that it says they will use the 'exchange rate they determine at the time of the transaction', while others may say they will use the 'visa rate at the time of the transaction'. One is telling you they can/will/may add a percentage on and the other is telling you they will use the rate Visa gives them (including Visa's 1% on top of the Interbank Rate).

So for those who may read this thread and have a different understanding of a word, it is important to clarify just what the terminolgy you use actually means.

I have no idea for example if Bank Of America charges a "pre-transaction ATM fee" (should that be 'per'?) or not but what I would want to know is if they add 'exchange loading' and if they charge an 'ATM usage fee'. Two different things, both often referred to by one term, 'transaction fee'.

Christina

yes, it should be "per transaction"
<<Some banks will advertise, 'no foreign transaction fees' when they are in fact ONLY referring to the ATM 'usage fee'.>>

Can you refer to any bank advertisement that says this and that is what they mean? to be honest, I've never seen any bank advertise that in the US, and even the ones that don't have that don't seem to advertise it. But the ones I know of actually do not have any foreign transaction fee at all.

dulciusexasperis

PalenQ, it has become more difficult to open a bank account in many countries in the last couple of decades. Primarily due to the concerns about money laundering.

About 15 years ago I walked into a bank in the UK and attempted to open an account and deposit a bank draft (certified cheque) of 6 figures in GB Pounds.

The bank clerk asked me for ID and proof of residence in the form of a utility bill (electric bill, cable tv, etc.) or property tax bill, rent receipts, etc.

I told her I had arrived in the UK that day, was staying in a local hotel for the present and so had no such receipts to provide. She told me she could not open an account. I was annoyed and asked her if she knew what business she was in. I always thought banks were in the business of borrowing money (your deposit) and then lending it out at a higher interest rate than they paid you. I then said to her that I wanted to deposit a 6 figure sum and she was refusing to take my money, did that make sense to her? All I got was a look of incomprehension.

So I walked to another bank a few steps away and instead of talking to the bank clerk, asked to speak to the manager. I showed the manager the bank draft, told her I planned to stay for a while but did not yet have a 'permanent residence' since I had just arrived and asked her if she would like to have my money in her bank. She went and made a phone call (presumably to her head office) and came back and told me she would be happy to open an account. The only stipulation was that it would take 5 working days for the money to be available in the account for withdrawal.

So the point is, there are rules and sometimes they are followed and sometimes they are not. Like most things, money talks.