View Full Version : UK Credit card "Foreign Exchange Charge"

30th Mar 2004, 22:12
I notice on my UK credit card charges, a 2.75% levy for foreign transactions. This means that for each and every foreign purchase, a 2.75% fee is levied for all my non-UK transactions.

Now to be fair, my credit card company have notified me of the levy. My questions are: should I be better off using a banker's draft or purchasing foreign cash? Or does this depend on the sum involved? Is there another means of executing foreign transactions without losing such a proportion?


30th Mar 2004, 22:24
I disliked that too, and I now have a Nationwide card that does not make this charge, and also gives me 0.5 percent cashback on my annual spend.

31st Mar 2004, 01:21
Credit card, debit card. Whishever method you use you get mugged. Travel agencies now seem to levy a charge for CC transactions and a lot of UK retailers are now charging for using a debit card, which I always understood was as good as cash. Even a modest B&B establishment in Yorkshire wanted 2 for accepting payment by debit card.

31st Mar 2004, 01:57
I've found travellers Cheques the way to go. You know what you're up for before you travel.

Credit/debit cards are carried as a back-up.

31st Mar 2004, 02:07
In NZ cash and EFTPOS (debit) card are regarded as the same thing. The retailer still has to pay for the machine, but they have the advantage of the money going straight to their account instantly (though it probably takes a week or so for UK banks).
You guys really like being ripped off, eh.............;)
I use my debit card when travelling - even in small towns in Thailand. Just withdraw enough cash to make the $5 bank charge worthwhile... either way, charges or exchange rate, someone will be making money out of you....

31st Mar 2004, 02:29
When travelling I use my debit charge to withdraw local cash. I find the exchange rate to be the best that way and the credit union only charges $2.00 for a foreign transaction.

31st Mar 2004, 07:50
There are two issues being discussed: convenience and cost.
I'll just talk about cost: what you are paying to make a financial transaction in a foreign currency. One way or another there is always a charge, when you change cash or travellers cheques at a bank or foreign exchange bureau, when you use a credit or debit card denominated in a foreign currency or when you make a bank transfer.

The way to calculate the percentage cost is to divide the foreign currency taken by the total cost (including all fees) in your home currency. Then you compare this with the market exchange rate. Today's market exchange rates can be found on the
Financial Times (http://www.ft.com) website. To compare credit card bills, you will need to use a database of past exchange rates, which you can find here (http://www.oanda.com/site/centralbanks/).

A good credit card will only charge about 1.2%; for large amounts, bank transfers should be slightly better. Everything else is more expensive - if you're paying 10%, you're paying as much as changing in most hotels. Bureaux de change are usually about 3% but in some Asian countries, they are very competitive.