Foreign Exchange Industry Blog: An Insider’s View
The travel money and currency exchange industry is changing all the time. We want to provide the industry with our thoughts and views on what’s going on in the industry. So keep up to date with what’s going on in the Currency Exchange and Travel Money Industry with our insider’s blog.
We would welcome feedback and views on what we have to say, so please feel free to email us.
Our latest blogs are below, if you would like to read our older posts please visit our archive page
Nationwide’s introduces overseas charges on the use of its FlexAccount card abroad
August 3rd 2010, The Currency Exchange Site Analyst
Nationwide Building Society, providers of ‘free to use abroad’ cards, have announced new charges on overseas transactions with their FlexAccount debit cards which will come into effect from 1st November 2010. The society has decided to levy a 2% foreign exchange charge plus a £1 flat fee on cash withdrawals abroad in replacement of 1% currency-conversion charge levied at present. In exchange, nationwide is now offering FlexAccount customers free travel insurance of an estimated value of £80.
These changes in charges levied mean that from 1st November, foreign spending of £100 on FlexAccount debit card will actually cost you £102 and every ATM withdrawal will attract a £1 fee plus the foreign exchange fee. These fees are still lower than the debit card norm, where a 2.75% foreign exchange fee is levied, and ATM withdrawal fees are 2% of the withdrawal amount (usually constrained to between £1.50 - £4.50). For example, Nationwide claims that holidaymakers who make four £50 card purchases and eight £100 cash withdrawals will, after the introduction of the new charges, be billed £28, compared with £43.52 by Barclays and HSBC, £48.52 by NatWest/RBS and £49.92 by Lloyds TSB.
The Nationwide FlexAccount will still offer consumers good value for money compared to debit cards, but there are now other cards which can provide a cheaper alternative; currency cards.
These cards are typically available in Pounds, Euros and US Dollars and operate slightly differently in that they are prepaid. However, FairFX and my Travel Cash’s Pound currency cards offer a foreign exchange fee of 1.5% (lower than Nationwide’s planned 2%). ATM withdrawal fees for my Travel Cash are capped at £1, and £0 for FairFX. Nationwide’s example of four £50 card purchases and eight £100 ATM withdrawals would cost £23 with a my Travel Cash GBP card or £25 with a CaxtonFX Global Travellers Card, cheaper than Nationwide’s £28.
These cards are all powered by MasterCard, so can be used worldwide anywhere the MasterCard Acceptance mark is displayed just like a MasterCard debit or credit card. For travellers looking to get the best deal on their travel money, currency cards now offer a more attractive package than Nationwide’s FlexAccount. To find out more visit our currency card comparison pages
What do you do when stranded abroad?
July 26th 2010, The Currency Exchange Site Analyst
The recent bankruptcy of Goldtrail and the volcanic ash cloud disruption in May has resulted in many UK travellers losing money after being stranded abroad or involved in a long wait for refund. Others who had already paid for their holiday with Goldtrail and were yet to jet off face are paying more for re-booking their trip.
In case you do get caught up in these situations, there are a few things you should know..
1) Make sure your agent is part of the Air Travel Organisers’ Licensing (Atol) Scheme.
This is a scheme set up by Civil Aviation Authority specifically for tour operators. As per this scheme, a holiday booked with a tour operator registered under this scheme is eligible for full compensation from CAA in case the operator goes bust when you are on holiday.
2) Pay by credit card to be protected by Section 75 – Consumer Credit Act
If you have paid for your holiday on your credit card, then you can claim between £100 and £30,000 under this section, which ensures that customers are able to claim a refund for good, & services that don’t arrive or those bought through suppliers that go out of business.
3) Book with an ABTA agent
This is an organisation representing 5000 travel agencies and 900 tour operators. They aim to maintain high standards of trading practice. You are eligible for refund from this agency if your tour operator is a registered member of this agency.
So the next time you plan for your holiday, checking the company registrations will make it easier for you to get a refund in case you are stranded abroad.
The Post Office helps you save money on your travel cash
June 17th 2010, The Currency Exchange Site Analyst
Anybody in possession of a Post Office credit card will be eligible for a waiver of the standard 2.5% cash advance fee when purchasing foreign currency from the Post Office with the Post Office Credit Card. This waiver is in addition to the already existing 0% commission on all overseas purchases and 0% interest for the first 12 months on balance transfers and first three months of purchases. Many other credit card providers charge up to 3% for buying foreign currency, so this exemption can save you money this summer.
This announcement follows a recent news release by the Post Office which highlights the disadvantages in leaving your money to the last minute. A Post Office survey indicated that by changing travel money at the last moment, at airport bureaux de change or using your UK credit or debit cards to withdraw money overseas, could cost you significantly more due to poor exchange rates, commission fees or cash withdrawal fees. In addition they found that many high street bureau de change and banks did not stock all currencies, even the 12 most common currencies. Euros and Dollar were easily available but 75% of the ten remaining currencies required pre-ordering for collection forcing last minute travelers to use cards abroad or pay over the odds at the airport.
For more information on the fees associated with using your UK credit and debit cards abroad, take a look at our blog cost to use your UK cards abroad
With fluctuating currency exchange rates how can you make sure you save money?
May 27th 2010, The Currency Exchange Site analyst
Europe’s troubles have continued this week as the Greece’s debt crisis spreads to Spain and Portugal. Although this has allowed Britons to take advantage of an improvement in the GBP:Euro exchange rate this week, an improvement on the lows of mid-May while we were waiting to see the final form of the new British government. Meanwhile the pound has continued its long term trend of losing strength against the dollar, a trend visible since November 2009 despite minor peaks and troughs.
With every new day brining news which shifts the currency exchange markets, how do you make sure you get the best deal on foreign currency?
If you need to send money abroad, then make sure you use a money transfer specialist rather than a bank as you will be able to take advantage of much better exchange rates. If you are flexible about when the money is transferred use a currency option so that you can avoid being a victim to any sudden declines in the pounds strength vs. your chosen currency. Given the current market fluctuations, this could be key to getting the best transfer exchange rate.
For your travel money needs then look online and compare the foreign exchange rates and delivery fees for a range of providers to make sure you find the best deal. Remember to take a look at currency cards as well as cash, as these cards give you competitive exchange rates, keep your money safe and with much lower fees for using your card abroad you can easily save pounds without even noticing!
Uncertainty in UK government, uncertainty in the pound
May 11th 2010, The Currency Exchange Site analyst
The pound is still down against most major currencies, as uncertainty over the UK government continued. However, despite a brief decline versus the euro the pound is still up against the euro, with a current exchange rate of €1.164. This is despite gains in the Euro after the EU and IMF made clear moves towards addressing the debt crisis with the Eurozone. The EU and IMF have agreed to offer up to € 750bn in loans and guarantees to fiscally troubled Eurozone countries.
Since the general election the pound has been fluctuating against other currencies as negotiations between Labour, Liberal Democrats, and the Conservatives continue. The Liberal Democrats recent announcement that a deal is likely to be made within the next 24 hours is likely to bring an end to this fluctuation. The markets response to this announcement is expected to be a weakening of the pound if a Labour – Lib Dem union is reached. However, it will be how this new coalition plays out in government and tackles the UK budget deficit that will dictate the pounds strength over the coming months.
The Pound Declines
April 29th 2010, The Currency Exchange Site analyst
With an election date one week away on 6th May and pre-election polls and surveys indicating the growing likelihood of a hung parliament, the pounds strength has declined. TorFX reported that the pound weakened against 15 out of 16 of the most actively traded currencies yesterday.
Recent surveys indicate the conservatives hold a small lead, followed by the liberal democrats and then Labour. Although the government have tried to comfort investors with reassurance that a hung parliament will not impact on decision making, fears that the government will lack sufficient support to push through policies to tackle the current budget deficit continues to impact the Pound.
One saving grace for the pound’s strength vs the euro has been the downgrading of Greece’s debt to ‘junk’ by Standard and Poor, as well as a downgrading of Portugal. Although the pound has declined against the euro to €1.149 to the pound, the pound is still in a relative position of strength compared to the parity that was almost reached during 2009.
What does this mean for the average Joe? If you are going away in the next couple of weeks, the pound is likely to remain unstable until the outcome of the elections is known. So search around for the best exchange rate and lowest commission fees. If there is a hung parliament, we expect the pound to at least suffer a short decline. However, we will have to watch and wait to see how this pans out over the next few months and weeks.
Newsflash: Now you can get your travel money delivered faster!
April 8th 2010, The Currency Exchange Site analyst
my Travel Cash has started to offer express delivery for their USD and Euro currency cards, the first of the prepaid currency card companies to do this.
Currency cards are an increasingly popular way to take travel money away with you. The plastic savvy British population have started to see the benefits of great exchange rates, low ATM fees and no fees on transactions with the currency card. Especially in contrast to the foreign exchange loading fees and commission fees on ATM withdrawals and purchases experienced with most UK bank cards and credit cards.
However, the long delivery time of up to 10 days for some of these cards has prevented many people using them. This express delivery, introduced several weeks ago, is a huge advantage for the my Travel Cash card, and will allow many more people to take advantage of the great exchange rates offered by these cards.
According to a source at my Travel Cash express delivery and the card will be free when $600 / €500 or more is loaded on to the card, and the card will be delivered within 1-2 days. An offer you can’t refuse? We think so!
Need to transfer large amounts of money abroad?
March 25th 2010, The Currency Exchange Site analyst
Moving abroad? Buying a house overseas, or already paying the mortgage?
Anyone who has made significant financial investment abroad, whether personal or business related, has to deal with the issues of transferring money. But, how do you do this?
Specialist foreign exchange providers are able to beat the rate a bank can give you due to lower overheads and a specialisation in foreign exchange transfers. However, the amount you need to transfer, how often you need to do this transfer, and what currencies you are transferring between will usually be the key factors influencing your selection process.
Watch this space for more information, comparison and advice on foreign exchange transfers….coming soon to The Currency Exchange Site.
Exchange rates continue to suffer
March 19th 2010, The Currency Exchange Site analyst
Concerns over a hung parliament and the UK’s ability to deal with it’s debt issues are continuing to affect the pounds strength in the global market. The pound has seen declines against all major currencies since entering 2010, including USD, AUD, CAD, JPY, CHF and Euro.
The pounds decline against the dollar is heading towards the lows of early 2009, when the pound declined from USD 2: £1 to c. USD 1.4 : £1 within six months. Hopes of returning to the highs of 2007 and early 2008 where the exchange rate was c. 1.95-2 USD : £1 now seem distant dreams.
The recent respite does not appear to be due to any renewed faith in the pound but rather the result of the Feb’s announcement that interest rates will stay low in America and risk-averse investors steering clear of the Euro.
The pound’s overall weakness is bad news for travellers, but with no date set for the general elections the pound is likely to continue to struggle as speculation over the outcome of the next general election continues.
Click here for more industry blogs
Subscribe
Our top rated consumer blogs:
- Make your gap year travel money go further
- Younger Brits prioritise holidays in 2010
- Travel insurance costs for the baby boomer generation rise
Quick links
- Latest FX News
- Top Travel Money Tips
- Currency Exchange Tools
- Glossary
- Detailed Product Reviews: