The other day, after paying a deposit on my long-awaited trip to Croatia, I received a shocking text.
Recent HRK currency conversion rates [Croatian kuna] The transaction includes a 3.30pc price increase that exceeds the European Central Bank’s interest rate, “he said.” Sorry, we are a valuable customer. “
Absolute cheeks! It’s more of a concern than my mortgage.
Of course, in my case, it’s not surprising that Ulster Bank does what all banks do, that is, they charge for services.
They are certainly not alone, but for many years, fees were hidden in small print in dense “contract terms” rather than being publicly and transparently notified as they are today. Normally, I didn’t time it until I received my bank statement.
Currency trading can come as an unpleasant kicker to your well-earned break, as we haven’t been able to travel for a long time.
But whether you’re visiting a family in the UK, traveling to the United States, or taking a vacation outside the euro area, doing business abroad can be costly.
I decided to take a deeper look at it, especially as Ulster Bank finished the hilarious text with the advice to “learn more on our website”. A website that will soon disappear, that is.
banking fee
Even if you have access to your cash, there is no such thing as “free” money when it comes to foreign currencies.
ForEx fees are a valuable source of income for banks. In particular, most customers don’t know what or how much they are being charged. There are exchange rates themselves (which change daily), fees for actually trading, and regular fees such as cash withdrawals and tip-and-pin purchases.
Cash withdrawal
With the advent of Visa, Mastercard, and the worldwide spread of cards, the need for cash has disappeared. However, there are always taxi fares, tips, market browsing, and so on. The need grows as you move further away from the countries of the first world.
You might think that just putting your card in a local ATM and taking out your money wouldn’t cost you extra, but it does.
You can pay anything from 1pc (EBS) to 3.5pc (AIB, BOI, PTSB) for non-euro cash withdrawals at ATMs. There is usually a built-in minimum charge. For example, Ulster Bank charges 2 pc, but the minimum charge is 3 euros – the maximum is 12 euros, so either method will be a hit.
By the way, if you withdraw cash at the UK parent bank RBS / NatWest, you will not be charged. Similarly, the UK branch of the Bank of Ireland is well worth looking for if you have customers here.
The postal service charges an additional 90c to the current account card in addition to the 3pc of transactions.
Credit unions will not run away. 3.5pc (up to € 12) will be added.
According to MoneyGuide (moneyguideireland.com), it costs € 1.75 for an N26 to withdraw € 100 (about £ 85) at an ATM in the UK. As long as you withdraw less than € 200 last month, Revolut will not cost you anything. Then 2pc), EBS, PTSB, KBC, BOI from 3.50 euros, AIB and Ulster Bank 4.50 euros.
Online bank
Revolut, a “free” forex cheerleader, is certainly free as long as you follow the rules. Withdrawing more than 200 euros a month from an ATM anywhere costs 2 pc (minimum 1 euro).
With the German-based N26, premium accounts are free, but standard accounts withdraw cash abroad at 1.7 pc. However, it is free to use the card in foreign currency and there are no restrictions. So it’s a good idea if you want to load your account and make a lot of trips to use it.
Wise is a UK-based card, but you can get it online for € 7. You can withdraw up to 200 euros per month for free overseas. Any more will be charged at 1.75pc plus 50c each time. Forex conversion fees are cheaper than banks for purchase. Currently from € 1,000 GBP or USD will be charged at € 4.65.
Post
The Humble Post Office offers currency cards preloaded from MasterCard for use abroad.
Depending on your country, there is a fixed fee for ATM withdrawals. The euro area is 2.50 euros, the UK is £ 1.50 and the US is $ 2.50.
However, you can use your debit card to pre-load up to 10,000 euros on your card at the post office. This is the currency you use (16 is available), so there is no additional charge for overseas purchases. ..
kiosk
The absolute most expensive way to buy foreign currency is at the street kiosk in the city you visit. Ignore all these “no fees” signs. Who needs a fee if the exchange rate is three times the amount paid at the bank? What’s more, who needs cash?
If you run into problems for any reason, always ask for the price you are charged and then look it up in an app such as XE or My Currency. This is obviously a pre-download. Whatever you exceed a few percentage points, you are torn.
Travel tips for your finances
Eight of the 27 EU countries are not in the euro area. Bulgaria, Denmark, Hungary, Poland, Croatia, Czech Republic, Romania, Sweden. Fees and fees apply to your money when you are planning a trip to them, or a country that is not actually in the euro area. Here’s how to manage your holiday spending:
- Always use a debit card to withdraw cash, not a credit card. This is true domestically, but even more overseas. You will be charged a fortune for privilege, but not so much if it is your own money. Credit card interest will be applied from the date of withdrawal or purchase of cash.
- Banks of Ireland are not allowed to charge ATM fees, but different rules apply elsewhere, even in the euro area. It’s not uncommon to be hit for more than € 3 per withdrawal, so always check.
- Cashback is the cheapest way to make money where the shop offers. This is because it is cheaper to get back 100 euros when you buy it at the store than withdraw it at an ATM.
- Always reject the “Currency Conversion” option when withdrawing cash abroad. It offers a terrible exchange rate because it incorporates a buffer of currency fluctuations that can be as high as 5pc. Always choose direct conversion in local currency and let your bank calculate at daily interbank rates.
- Avoid overseas street exchange kiosks. “No fees” does not mean free.
