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Payment by British Pounds, American Dollars or Credit Card

Payment by British Pounds, American Dollars or Credit Card

Old Sep 8th, 2004, 09:38 AM
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Payment by British Pounds, American Dollars or Credit Card

I am about to pay for apartment rental in London part in advance now, then balance in a month or so.
I checked on OANDA currency sheets for travelers and I got todays interbank rate, the add 2 1/2 credit card rate, and the 4% cash exchange margin (?).
Anyone have experience on how to get the best arrangement? Do I go to my bank, do I get all GBP and mail that? The London flat people are suggesting a rate of $1=1.88 GBP.
Do I wire the money to London?
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Old Sep 8th, 2004, 09:42 AM
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I forgot to add the rates $1=1.77GBP,.
$1=1.81GBP, and $1=1.84GBP and the London apartment people are quoting $1=1.88GBP as payment. Not too confusing I hope.
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Old Sep 8th, 2004, 10:00 AM
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Are you saying that they will accept dollars? But at an exchange rate that you find too high? If you send a check in dollars, they will pay a fee to cash it so it is not unreasonable for them to ask a higher exchange rate.

You can send the deposit in GBP by going to your bank and having it issue an international draft. The exchange rate will be closer to the official rate and you will pay a service fee of about $20.
Setting up a wire transfer would be a bit more complicated, but banks do it every day. Call your bank and ask what it can do for you, and at what fees it charges.
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Old Sep 8th, 2004, 11:21 AM
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A number of my US clients have taken to sending ordinary US cheques for really irritatingly small sums - like $250.

To my utter astonishment, Lloyds TSB in the UK give me what looks like the Oanda rate of the day, less £8. This is almost certainly less than most US banks would charge for a wire transfer.

Few people know about this: even the bank staff tell me everyone else is equally astonised to discover how cheap it is (it must cost them the £8 in management time, given the amount of forms that have to be filled in).

You might try suggesting this to the rental company. Though, since I'm met with universal disbelief when people hear about the service, you might not get very far.

Incidentally, the ordinary 18 year-old staff in the small, relatively remote, market town where I deposit my cheques know the procedure for this without even checking. We spend so much time bad-mouthing banks, it's worth noticing when they do something right.
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Old Sep 8th, 2004, 11:30 AM
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Hi Thomas,

See if the landlord will accept your sending a check for the full amount in dollars and not cash it.

You can then pay cash when you get to London and get GBP.

Then you get your check back.
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Old Sep 9th, 2004, 04:07 AM
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What a trusting person you are to send a check for a service you have not yet received and to someone in another county who is unknown to you. I would pay be credit card, if you have a problem with the rental, you will have the credit card company behind you. I find that the exchange rates which the credit card companies use are very good. (Some people are charged by their credit card company for inccuring expenses in foreign currency; I don't undertand this as I have a regular green Amex US Dollar card and haved lived overseas for 15 years and charge all sorts of foreign currencies to it with no service charge. There is a tread on this, do a search,it may be Visa or Mastercard which does this. If you will incur a charge for using the card, it might not be as attractive, but the security of being able to challenge payment outweighs any charge, IMO>)

If the stay goes well, you could offer to pay in cash at the end and the landlord tears up the credit card receipt. In that cast, get money from an ATM for the best exhange rate.
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Old Sep 9th, 2004, 04:38 AM
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Cicerone...

Unfortunately you do not read the fine print.

American Express absolutely imposes a service charge for foreign currency charges. It is 2% above the interbank rate. They simply don't list it separately.

MC/Visa charges 1% above interbank for foreign currency charges. The problem here is that many near criminal MC/Visa banks such as Citibank, Chase, First USA, Bank of America now impose an additional 2% charge for a total of 3%.

However there are many MC/Visa banks which impose no additional charge abovfe the 1%. These fair banks include MBNA, Capital One, USAA and many credit union banks.
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Old Sep 9th, 2004, 04:56 AM
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Well that's funny, because when I get my statement and work out the exchange rate which Amex used, it is ALWASY better than any bank rate, ATM rate or money changer rate. I will read the fine print again as I haven't read it since 1981 when I got my first card, but it seems to work out that even with their charge, the rate they get means that the cost of buying with the card is cheaper than if I had gone and exchanged the money myself and paid in cash. Another reason to use the card (plus those Amex points. . . )
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Old Sep 9th, 2004, 04:59 AM
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Also remember that the interbank rates are lower than retail rates; that rate is just for banks exchanging cash in volume, not individuals, so you would never get the good interbank rate exchanging cash on your own. That is why even with the service charge you will get a better rate than exchanging money yourself.
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Old Sep 9th, 2004, 05:11 AM
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Just to clarify for everybody..

It is always cheaper to use a cc rather than cash when dealing with foreign currency. No currency exchange company gives you anything near the interbank rate. For the most part, the interbank rate is the one listed in the newspapers or on CNBC.

So it might say the interbank rate for the GBP to the USD is 1.78....nowhere will you be able to get £1 for $1.78. Most banks in the US with these exchange promises of no service fees stick it to you by charging $1.95 for £1. Cash exchange bureaus in London would probably charge you $1.90 for £1 plus there are service charges on top of this.

MC/Visa add 1% to the interbank rate, Amex adds 2%. Some MC/Visa banks add an additional 2% all to the interbank rate.

So even if you're dumb enough to use a MC/Visa card from one of the near criminal banks noted above, you still do much better than using cash (although ATM withdrawals are pretty much interbank + 1% as MC/Visa control the shared teller networks; but even here there are near criminal banks adding their own fees).
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Old Sep 9th, 2004, 05:53 AM
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xyz123, your above post really makes no sense. First you say that you will always get a better rate by using CC than cash, then you proceed to explain that it is possible to get cash from an ATM for only 1% (assuming your bank doesn't also add charges which many don't). Then you explain that all credit cards add the 1% so now we're even. But that many credit cards add up to 2% more, so all those refute your own statement.

I know as a fact that if I use cash from a European ATM on my BofA ATM card, I'm doing better than any charges I make on my Citibank credit cards. "Always cheaper" is an awfully big statement to make.
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Old Sep 9th, 2004, 06:05 AM
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I wasn't clear and I do apologize....ATM withdrawals are pretty much equal to cc's when the cc doesn't charge the additional 2%. You're right...if you withdraw from an ATM with say a Citibank ATM or debit card, you only get nicked for the 1%. If you use a Citibank cc, you get nicked for 3%. The solution, of course, is not to ever use a Citibank cc for foreign purchases. My point has always been that this rip off charge, i.e. the additional 2% and it is a rip off as the banks have nothing to do with the currency conversion, would have been still born if stupid people didn't continue to use the cc's of those bank perpetrating this near fraud. Remember when banks had annual fees for cc's? With the exception of the major airline cc's, few if any banks charge annual fees for their cc's. Why? Because people migrated to banks offering cc's not pulling this garbage.

If nobody used the cc's of any of the banks pulling the 2% garbage, and the banks saw they were losing business, this fee would go bye bye in a New York minute.

What I was comparing was exchanging actual cash at anything other than an ATM with use of a cc.

Finally, if the two ways of doing business are the same, it still makes much more sense to use a cc as you have the leverage of the cc bank behind you in case of shoddy goods etc. Try getting your cash back if something goes wrong with a purchase.
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Old Sep 9th, 2004, 08:16 AM
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Did any of you read Thomas's post? He cannot pay by credit card.

You have a variety of options: get a check in GBP through your bank or a foreign currency dealer (in the yellow pages); get travelers' checks in GBP and send those; and the post office even does drafts in some foreign currencies.
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Old Sep 9th, 2004, 09:15 AM
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OK, xyz123, that's more clear.
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Old Sep 9th, 2004, 09:24 AM
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Actually, I was going to say that what the apt. agency wants isn't that unreasonable (4 pct over interbank) and I might go for that to save the trouble, time, expense whatever of getting a bank draft, wiring or other options. Except Thomas' post really isn't clear to me what the owner is proposing with their rate--for him to just send a personal check in USD for that amount, or what?

Actually, Thomas doesn't say that he can't use a credit card, he suggests a credit card right in his heading. That's why I wasn't sure what his options really are.

For example, if these apt. people mean they will accept a cashier's check in USD figured at that approximate rate, you'd have to go to the bank, get it, then pay for some postal delivery service and go to the post office for that (like Global Priority), etc. I get cashier's checks free at my bank due to my status, but some others don't.

It is trusting, but it is not at all unusual for apt. agenciees to require payment in advance, they all do that I've seen. And many will not accept credit cards. However, I think an agency would be nuts to take a check if the writer said "here's my check but don't cash it" as Ira suggests. That's essentially no payment at all. I wouldn't accept that from a customer as I'd suspect they either had no funds, or that they were going to cancel payment on it, which you could easily do. I've had hotels do that sometimes, hold a deposit check and not cash it, but they did that of their own volition and it was for a much smaller amount of money.
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