Best Exchange Rate for UK?

Dec 13th, 2001, 07:52 AM
  #1  
Jess
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Best Exchange Rate for UK?

Hello again! I'm almost ready for my trip in two weeks! (excuse me...*small happy dance*) But I have one big hurdle to get through.

I just contacted the American Express travellers cheque, checque, check (whatever) people and their fees and exchange rate was pretty extreme. I've been watching the exchange rate for a while and they're charging $.05 over what the average of many websites are reporting, in addition to a 2% fee to making the checks.

I was wondering if anyone has done anything else to ease the charges (or, as I call it, ease the ulcer-acids in my stomach), for overseas exchanges?

I looked at Visa Travellers cards but I think I may be too late. Any advice? Should I not exchange money and risk big fees on my ATM card? Or what about waiting and doing the exchange at a bank?

I think I'm going to take a rolaids and wait for y'all's advice...
 
Dec 13th, 2001, 08:20 AM
  #2  
Julie
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Hello Jess,
How exciting...I love the UK. I spent a semester in London years ago and I didn't bring a pence with me! I have gone back many times since and I have never had any problems with showing up with no travelers checks or pounds and just hitting the first ATM machine I find in the Airport. The fees are not bad at all. Check with your bank to see their policy.
Things to avoid are those booths at the airport that say currancy exchange...they usually have an ugly fee. Don't hesitate to use ATMs and your credit cards when you can. If you really want to exchange dollars for pounds then go to any major bank in the city, they will have the best rates and won't rip you off but will charge a fee.
But my main advice is don't stress about money...its really quite easy. I always just use ATMs when I get there.
And remember to be smart...use a money belt...there are pick-pockets in major cities (ever see the musical "Oliver"?)
Good luck! Have a great time.
Julie
 
Dec 13th, 2001, 08:54 AM
  #3  
kang
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Try to always settle your bills with your credit cards, they are accepted in almost all occasions, hotels, dinners, museum entrance fees, touring companies, transportations; you get the best exchange rates by using the cards. London is an expensive place to do almost anything compare with the States.

You need some cash but not too much, just for tips and some small expenses. Using ATM card is certainly a good way to get cash.

Inform your credit card issuers that you're going abroad before your leaving the US. Otherwise, your transactions might be denied after a few usages.
 
Dec 13th, 2001, 09:40 AM
  #4  
greg
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Jess,
First, the difference between the best way and the worst way is perhaps about 10%, so it is usually not a fatal problem. But nevertheless, you do not want to use the worst way if you can avoid it.

Here are all the fees I have observed.

ATM:
1. Front end fee: This is less of problem is Europe than in US. This is the fee that the owner of ATM charges for its use. I can seem to avoid this by using ATM located at Bank, airpot.

2. Exchange fee: 1%. This cannot be avoided. You do not see this separated in your bank statement, so many people think there isn't any. But if you very closely study the "official" exchange rate vs what your statement says, there is always this 1%. This pays for those invovled in currency exchange.

3. Bank imposed additional fee: about 2% by enterprising banks. You avoid this by using a bank that does not do this.

4. Network charge: This is same deal as if you were to use other bank's ATM in USA. About $1.50. I think this pays PLUS or CIRRUS folks.

5. Charge by your bank: If your bank slaps on additional charge if you do not use their ATM.

CC:
You know that you shouln't get cash using the credit-card... In case of purchases:
1. Exchange fee: unavoidable 1%, just like ATM card. Again buried in your statement so it seems there isn't any.

2. Bank imposed additional exchange fee: about 2%. You can avoid by using CC from the bank that does not do this.

I have notice a subtle difference in exactly when the exchange takes place between ATM and CC. ATM exchange seems to be instataneous, you get the exchange rate at the time the cash is withdrawn. The CC exchange takes place much later, when it is posted. So exchange rate used seem to be half a day to a day after the actual transaction.

Cash exchange should be minimized but difficult to avoid entirely.

Cash-Cash exchange is best at target country's bank, then their money exchange. Cash-Cash exchange in US is quite expensive, but I do exchange a day's worth of spending cash beforehand in case the ATM is not working.
 
Dec 13th, 2001, 10:34 AM
  #5  
Jess
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Thanks guys...I'm trying not to sweat it too much now.

I'm actually going to use my bank card while overseas. I talked to my bank and the charges weren't that extreme. And they have a program of ordering currency for no additional cost, which is nice. But I have to say the exchange rate threw me. On all the websites I visited, the rate was 1GBP = $1.44, at least this morning it was. My bank has it at $1.55! That's pretty annoying.

Oh well, just looks like banks are doing what they normally do to customers...screwing them over.

Thanks again y'all for the great advice!
 
Dec 13th, 2001, 10:42 AM
  #6  
jpm
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Go with an ATM card from a CREDIT UNION!!!

I've used my ATM card all over and never have been charged when using it overseas.

Why give your money to a bank?

jpm
 
Dec 13th, 2001, 11:13 AM
  #7  
Brian in Atlanta
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Banks are in business to make a profit. They are providing you with a service by getting you currency. This costs them money. They have to cover their costs and should also make a profit from the transaction. You wouldn't expect your grocery store to sell you its goods at cost would you?

But as you've smartly determined, there is a cheaper way for you to access pounds - by using your ATM card. Have fun.
 
Dec 13th, 2001, 12:20 PM
  #8  
bettyk
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If you want to take travelers checks in US $, you can get them free at any AAA (American Automobile Assoc.) office if you are a member.
 
Dec 14th, 2001, 06:51 AM
  #9  
Ann
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The exchange rates you see on the websites are not consumer rates--those are the rates for large commercial transactions. This is why people are encouraging you to use your credit card. The bank that holds your credit card will get that preferred rate you found quoted on websites.

Typically, you'll be able to exchange money for cash for 5-10 cents above the rates you saw. You're not getting ripped off, and if AMEX is only 5 cents higher, you're getting a good rate.
 
Dec 14th, 2001, 07:32 AM
  #10  
kang
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I compared again ALL my expenses charged to my credit card during my 10 day stay in UK between 11/27 and 12/6 with my credit card bill I just received. The exchange rates, all of them, had been between 1.44 to 1.46, regardless of the nature and place of the transactions. I exchanged 300USD cash on the day of my arrival, 11/27, to UK pounds at the airport and the rate were 1.53 with 3.5USD service charge. I sticked with my credit card throughout all my stay and 10 days later before my departure, I still have a few pounds in my wallet.

Trust me, you get the best deal for using credit card and you can use them in any occasions.
 
Dec 14th, 2001, 07:38 AM
  #11  
Jess
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Thanks tojpm, Brian, Betty, Ann, and kang! I think I have a plan now as to how to approach the situation. I'm going to get as much cash as I need for the first leg of my trip (Edinburgh) before I go overseas. My bank has a good program to order foreign currency and get it delivered to the nearest bank the next day. Then I'm just going to use my bank card and hope I don't completely blow my budget in the end.

Thanks again for y'all's responses!

Cheers,
Jess
 

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