Exchange Rates

[cosworth211]

Hi all,

I leave for EFT on their intergrated APP program in 8 weeks. My proffessional studies loan gets paid into my regular HSBC account, I then have to convert it into dollars myself. My bank will send funds to EFT in dollars, but at approximately 4 cents less then the current exchange rate. Whenever I pass travelex or any other exchange bureau they also offer an exchange rate up to 10 cents worse then the actual exchange rate.

How have other people changed their money when training in the US, from two perspectives -

1/ transferring funds direct to the flying schools account
2/ changing money into dollars for living expenses.

To get the best deal?

Thanks :ok:

[willby]

Hi Cosworth,
When my son was training in the USA on two different occasions he used his credit to keep his flying a/c in credit etc. he also used it to withdraw funds from ATM's for living expenses etc.
This way you get the full exchange rate in force on the day of any transaction.
You avoid any interest payments by ensuring that that your credit card a/c is always in credit.
Regards
Willby

[simkin]

Cosworth,

A couple of points that may be of interest:

i)

In order to get good value from using a credit card abroad you need to make sure that the card issuer does not levy a percentage commission and/or a handling commission. If your card does they will screw you on every transaction you make from a $10 meal to a $500 headset and you may end up being worse off than paying cash that has been exchanged at a tourist rate.

You want to use a card that does not charge a percentage commission or minimum handling commission. This will mean that you will be spending at exactly the Visa or Mastercard wholesale rate at the time of the transaction, which will be shed loads better than the tourist rate. Two UK cards that do not levy such charges are the Nationwide credit card and the Lombard Direct credit card. Granted they are not flash plastic but are the best value to use abroad. However they will screw you if you withdraw cash from an ATM using a credit card. You can use a credit card as a debit card if you ‘pre-load’ it – as in paying money to the credit card account to bring you in to credit rather than running up an owed balance.

All of this said your FTO may insist on whacking you with a ‘handling fee’ if you want to pay them with a credit card – see next point.

ii)

If you transfer from a UK account to a US $ account I recommend using an exchange broker to do the transfer, not the bank themselves. In effect you will be paying the broker who will then transfer the money to your nominated foreign account. Two I have used are HIFX PLC ( www.hifx.co.uk ) and Currencies 4 Less ( www.currencies4less.com )

All this seems like a hell of a lot of hassle but once it is all set up it will be easy and since you will be in the US for a while your savings will soon add up!

All the best and have fun!

Sim

[Julian]

I opened a US bank account (Bank Of America), got much better exchange rate through them by just paying my £ into my US account than I would have by changing into $ in the UK

Julian.