Cash while cruising

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Abraxas33

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We cruise 6/7 months per year in the Med and like most folks use the 'hole in the wall' to get cash. Last year using my Barclays Debit Card I was charged a single fee for using a cash machine but not charged anything on purchases. This year I've been charged both a handling fee and a separate commission fee when using cash machines and a commission fee for straight purchases - these charges have totalled over £500 this year! Is there a cheaper way to get cash?

Garry
 
I understand Natwest have the 'best' deal on card transactions abroad, though we haven't tried them yet. A post on the PBO forum will get you deluged with (sometimes contradicting) advice!!
 
The generally accepted 'best' way of getting cash abroad is to get a Nationwide Flexaccount with a visa debit card. No commission and reasonable exchange rates. If away for a while, set up an internet savings account (with NW or anyone else) and transfer cash in as required. The card works almost everywhere except in a few French banks.
 
Ah, thanks Snowleopard, I couldn't remember the name of the Natwest account. If we actually do manage to get away again next Spring, that's the one we'll be going for.
 
Thanks to all - I'll nip into Nationwide and open an account. BTW It's interesting to note that while away cruising and using the Barclays Internet System the charges are not identified, you only get to know you've been charged when you get home and see it on your paper statements - others be warned!
 
Second the Nationwide credit card set up,saves us about £300 a year on our European travels,you do have to pay for "cash advances"-"hole in the wall", but the better exchange rate they give you offsets this,but AFAIAA the Nationwide debit card does not have this charge.
It seems to be universally accepted in France,and you can manage it on the net.
 
Correct, there are no charges on the debit card BUT there are some french bank machines that don't accept it, or didn't in 2002.
 
When you take cash out of an ATM abroad there are four factors that can affect how much is debited from your UK account for a given amount of foreign cash in your wallet:

1. The exchange rate used on the day by Visa, MasterCard, Cirrus or which ever other credit exchange company is used by your card issuer.
2. The ‘exchange rate loading’ added to the above by your card issuer.
3. The ‘handling charge’ made for using the ATM machine.
4. If you are using a Credit Card, the interest charged – both how much and from when.

It is extremely hard to find out some of this information as many banks keep it hidden away in the small print and few show a full breakdown of the charges they have made on your statement. The most illusive is the ‘exchange rate loading’. According to Which? Magazine all banks charge it, but it is often hidden within the exchange rate quoted and not shown as a separate charge. This practice is unsatisfactory at best and downright dishonest at worst.

To give an example: Let us suppose that you and I queue up at the same ATM in France and that, within minutes of one another, we both take out 200 Euros in cash. Let us also suppose that we both use a Visa Debit Card, but issued by different banks. Will we both have the same amount deducted from our account? Almost certainly not. The exchange rate used by Visa will be the same for both of us and it will be the ‘commercial inter-bank rate’ for the day, not the much less favourable ‘tourist rate’ quoted in the Newspapers. However, the ‘exchange rate loading’ applied by our respective banks could be very different. Most of the ‘High Street’ banks apply a loading of around 2.7% whereas more competitive banks can charge as little as 1.25%. Nationwide charge 0%. On top of this will come the ‘ATM handling charge’, which is fairly typically 1.5% with a minimum of £1.50 but can be as much as 2%. Thus, the total charge could be as little as 2.75% or as much as 4.7%. On a typical two-week holiday this may not matter, but for those of us living abroad for much of the year it is very significant.

If we were using Credit Cards we would also have to worry about interest. Some issuers charge interest from the day you take the cash out, others from the date of your next statement. Some charge interest whether or not you pay your account in full, others only if you don’t. The best advice here is never, never take cash out with a credit card – it is much too expensive.

So what about buying goods directly with a Credit or Debit card? There is no ‘ATM handling charge’, of course, but the other three factors still apply in exactly the same way. Once again, the most illusive charge is the ‘exchange rate loading’ that, as with cash withdrawals, is often hidden within the exchange rate quoted and not shown as a separate charge.

So, to answer your question, and in support of what others have said: Nationwide is the Debit ( not Credit) Card to go for.
 
U K Banks and foreign exchange

As you can't expect anything for nothing all you can do is to mitigate your losses.

As Medman has explained the charges (which were there before but not explicit) are to be found in four forms. (I am excluding the interest charged by drawing on credit cards which has always been an imprudent thing to do)

The first is the bid/offer spread, charged by the credit card network - this is between 1.5 & 2.7%, and there is no hope of avoiding this if you use plastic.

The second is the commission charged by the bank/s, this is what you have commented on and has been added to credit card transactions since February this year. The only organisation I know of who do not make this charge are the mutual Building Society Nationwide.

Third is an honest commission - which has fallen out of favour and been replaced by
larger, hidden charges.

I used a € account in a French bank, whilst in France. They converted my £cheque into € at interbank rate, charging me a flat fee of €5 and 0.5% commission. On any £ figure over £300, this meant I was saving over using any of the two card companies. Unfortunately transfer of € over any euroland national boundary still incurs a charge, though it's supposed to be being rationalised and reduced by the end of this year.

Some of the Channel Island branches allow € accounts and make no conversion charge but have high service charges and, of course take an enormous rake-off any £ you change.

The fourth is the charge made by the bank running the ATMS. This is almost non-existent in UK and France, becomes occasional in W Mediterranean countries and is frequent in the East.

Unless you are moving large amounts of cash, your best bet is to do the homework and avoid those banks charging for the use of their ATMS and to use the Nationwide Flex debit card. For credit card purchases use their Visa.

Leave all your other cards in the UK.
 
Acceptance of Nationwide Flex card

You'll find that it's accepted in all bank ATMS, but NOT in automated fuel machines (all of which have to have a national debit or credit card).

You may however run into the banks local upper limit on cash they'll allow a "foreign" card to draw - in some cases as low as €150.
 
Re: U K Banks and foreign exchange

Nice to have a unanimous verdict! Nationwide debit card it is then. The application of charges from February this year (I think Medman mentioned this) also explains why our charges were considerably more this year than last. Our first season (2003) we used credit cards which were more expensive than last year (debit cards) but this year has been the most expensive yet! I’ll get a Nationwide debit card but the moral is keep reviewing what’s happening as who knows what Nationwide may do in the future.

Thanks again to all
 
There is some hope

That Nationwide will continue with their policy.

a) They're a mutual, which gives them an excuse for breaking the cartel rules.

b) As this forum proves it is doing more to get new customers than any other form of marketing.

a) Could be threatened by the Visa organisation, which means we would have to start a campaign with the European Commissioner for Competition policy - we'd get a receptive hearing because the Commission is pretty pissed off with the restrictive practices of European banks.
a) Could also be threatened by a vote being forced by carpetbaggers, for the organisation to demutualise and for them to make a windfall profit as happened with a number of other building societies - counter that by using your vote against such a move.

b) is already causing the UK banks grief, and some pressure is being put on Visa to disallow the practice - difficult to see how they can "persuade" Nationwide managers to give back to their customer/owners their part of the transaction fee.

The price of maintaining reasonable foreign exchange fees is eternal vigilance.
 
Re: There is some hope

I am a dutchman, living in Spain and with bank accounts in The Netherlands (ABNAMRO) and in Spain. ABNAMRO does not charge me any costs to use an ATM in any of the Euro-countries, but I do pay a quarterly fee of 7.50 euro . I wonder what the costs would be if one opened an Euro-account in one of the euro-countries, transferred money from the UK to that account and use a euro debit-card of the euro-bank to get cash in the euro-countries. Transfering money from one bank-account to another usually has the lowest rates and it would therefore be the cheapest way to get euros. If the bank(in one of the euro-countries) would allow you a debit-card it is most likely the cheapest way to get cash.
 
Re: U K Banks and foreign exchange

I just want to add a correction here: The Nationwide Credit card offers a 0% buy/sell spread so if you want the benefits of using credit then this will cost you nothing to use when used in the shops (It does have a "cash advancement fee" however, if you use it in an atm). I actually managed to make money once with my NW CC by using it to put a deposit on a rental vehicle in the USA. At the end of the rental they credited my account with what they had taken off but as the pound had weakened slightly I was quids in.

Edit: Charles, I just re-read your post, which I initially misread. I now think my post agrees with rather than corrects you. Still, it always seems as though my NW card even avoids the spread imposed by Visa but I guess that cannot be the case.
 
Re: There is some hope

Unfortunately there are still charges, notably from Italian banks, when you use their ATMS.
In fact, though under notice from the Commission to make a forced change, most €banks make a charge for transferring money across national boundaries.
This will reduce as banks such as ABN Amro manage to get an Europe-wide network together (I notice Fabio has at last resigned after his unprincipled actions in the Antonveneta affair).
Meanwhile expect nothing but underhand, barely legal, money-gougeing ploys from banks. All are equally amoral and good at hiding their depredations.
 
Allow me to enlighten you

Whilst the Nationwide cards (of which I have both the credit and Flex debit cards) re-imburse the Visa charge which other cards impose, they are totally subject to the current exchange rates that Visa are giving. If you care to track the Visa (or Mastercard) rates against interbank rates you'll find a hidden charge of between 1.8 and 5.6% between what they're paying and you're being charged.
On the whole Mastercard tend to take a smaller slice.

I used to transfer by UK £sterling denominated cheque to Credit Agricole on a regular basis money from my UK bank - they used to charge me a flat rate of €16 + 0.5% of the value. To my knowledge this was the cheapest way of getting money into the € area. Coupled with a Maestro card, there were no charges for withdrawals in France or purchases in other € countries. However cross-border cash withdrawals attracted a charge from some ATMS providers.

Having been involved with drawing down UK cash in the €block for about 8/12 months a year since introduction of the €, I've come to the weary acceptance that all the European banks are going to make you pay through the nose for the priviledge of spending your own money outside your home country.

If anyone is interested I'll let them have a link to the daily interbank rates, though the realisation of how much a rake-off they're paying will be a bitter pill to swallow. Just send me a PM.
 
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