Exchanging USD to GBP

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Goblue10
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Joined: Sun Dec 30, 2012 12:39 am

Exchanging USD to GBP

Post by Goblue10 »

Once in London, can anyone recommend the most cost efficient way to exchange USD to GBP. I do not have a Capital One credit card nor will I get one before I leave. My AMEX charges 2.75% I have heard Post Offices there give good rates? What about a particular bank other than BofA?
WHL
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Re: Exchanging USD to GBP

Post by WHL »

Why wouldn't you exchange before you leave the US? I always head to my local Chase branch and order my euros before I head to Germany. Takes 1-3 days, no hassle, no wondering if I'm getting the best rate.

If you don't want to do that, for some reason, I'd head to a local UK bank: Barclays, Lloyds, Santander, etc.
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Methedras
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Re: Exchanging USD to GBP

Post by Methedras »

Is there any chance you bank with a credit union in the US? I am an American living in London, and I have found that by far the cheapest way to transfer money to the UK is by simply using an ATM to withdraw cash. At the ATM, I refuse the conversion of the UK bank, and allow the debit to be sent to my credit union for conversion. This yields an incredibly good exchange rate, as the spread is quite low.

Beyond that, I concur that you should exchange some cash at your local bank in advance, as there you will pay a spread, but you won't incur any foreign ATM charges. The truth is that there is no really good way, somebody is going to make a buck off of you.
obgraham
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Re: Exchanging USD to GBP

Post by obgraham »

I see this topic repeatedly in fora such as this.
I can't understand the problem. When I go abroad, I simply stop at the nearest ATM and get some cash, be it Sterling, Euros, Quetzales, Soles, or whatever. Sure, there's always a buy/sell spread. There is when you do it at home, too. That amount is not worth monkeying around for days at a bank.

But then, I don't know how you go into a bank -- haven't been in one in years! Do they still have a door?
partner
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Re: Exchanging USD to GBP

Post by partner »

Methedras wrote: At the ATM, I refuse the conversion of the UK bank, and allow the debit to be sent to my credit union for conversion. This yields an incredibly good exchange rate, as the spread is quite low.
Could you explain the process of how you go about doing this.
Topic Author
Goblue10
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Re: Exchanging USD to GBP

Post by Goblue10 »

I have heard the exchange rate premium is lower when exchanging in the UK, that is why I am waiting. I have enough GBP spending cash for the first couple days. The rate charged at the ATM is excessive since my bank has no affiliates in the UK.
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Methedras
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Re: Exchanging USD to GBP

Post by Methedras »

Not all ATMs permit this, for example, a Lloyds TSB ATM will simply exhange without prompting for a conversion. However, HSBC does allow you to choose, but they do it really sneaky like. When you try to withdraw cash from the HSBC ATM, it specifically asks you before you get your money if you would like to convert the money to pounds. It seems obvious, of course you want pounds! But, the fine print says that it is asking if you want HSBC to do the conversion, where they give you a standard conversion spread PLUS and additional 3.15% charge.

It appears on the ATM prompt (if you don't look closely) that rejecting this will cancel the ATM withdrawal. This is not the case. By rejecting this conversion, it instead sends the charge to my credit union, in pounds. Then my credit union does the conversion (which may or may not be a better spread), but they only charge me a fixed $0.75 conversion fee, regardless of amount. Obviously this is better for nearly any amount of cash withdrawn, and serves as my primary method of transferring $ to £.
partner
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Re: Exchanging USD to GBP

Post by partner »

Methedras wrote:Not all ATMs permit this, for example, a Lloyds TSB ATM will simply exhange without prompting for a conversion. However, HSBC does allow you to choose, but they do it really sneaky like. When you try to withdraw cash from the HSBC ATM, it specifically asks you before you get your money if you would like to convert the money to pounds. It seems obvious, of course you want pounds! But, the fine print says that it is asking if you want HSBC to do the conversion, where they give you a standard conversion spread PLUS and additional 3.15% charge.

It appears on the ATM prompt (if you don't look closely) that rejecting this will cancel the ATM withdrawal. This is not the case. By rejecting this conversion, it instead sends the charge to my credit union, in pounds. Then my credit union does the conversion (which may or may not be a better spread), but they only charge me a fixed $0.75 conversion fee, regardless of amount. Obviously this is better for nearly any amount of cash withdrawn, and serves as my primary method of transferring $ to £.
The quote below is from a travel advise web site, I have seen the same in many others. Is it agreeing with what you say. I can't tell.

Euros or Dollars? Do not let merchants in Ireland charge your card in dollars. Since the merchants take a cut you will generally get a very unfavorable rate. When handing over your card instruct them to charge in euros only (or pounds sterling in Northern Ireland). This is called dynamic currency conversion.
wriggly
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Re: Exchanging USD to GBP

Post by wriggly »

partner wrote: Euros or Dollars? Do not let merchants in Ireland charge your card in dollars. Since the merchants take a cut you will generally get a very unfavorable rate. When handing over your card instruct them to charge in euros only (or pounds sterling in Northern Ireland). This is called dynamic currency conversion.
Some places will go to extraordinary lengths to perform the conversion themselves. I stayed at a hotel in Amsterdam where the card terminal displayed euros, and the receipt stapled to the invoice showed euros, but was actually folded over, and the hidden part indicated that the hotel had performed a currency conversion.

If this happens, complain to your bank. This scam is common enough that the credit card companies have a separate error code for Unauthorized Conversion. They will revoke the transaction and redo it at the exchange rate that would have applied if done correctly.

Back on-topic, the Post Office is usually one of the better places to convert, but banks and some bureaus de change are often not too far behind. Keep an eye on places with rates displayed in the window - they are competing on price, so will usually have the best rate. Check whether they have a minimum to get the advertised rate, and whether there are any additional fees for paying with an overseas card.
Carpe
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Re: Exchanging USD to GBP

Post by Carpe »

Goblue10 wrote:Once in London, can anyone recommend the most cost efficient way to exchange USD to GBP. I do not have a Capital One credit card nor will I get one before I leave. My AMEX charges 2.75% I have heard Post Offices there give good rates? What about a particular bank other than BofA?
My preferred approach is using an ATM card. On my last trip to Germany I checked the transaction against the closing (trade) rate for that day and was impressed that the rates were almost identical.

Having said that, I generally try to limit my exchanges to one direction. Exchanging back and forth between currencies is bad practice (i.e. bigger losses), when travelling or investing. Exchange rates at the kiosks at airports are just horrible (I saw spreads in the 20% to 30% range at Heathrow recently, and that was just between the pound and USD. Amazing! If you have any paper money left at the airport on your return trip, assuming it is not too excessive, get some decent food before boarding your flight, treat yourself to something or buy a gift for a friend or family member in duty free.
Carpe: pick, pluck, pluck off, gather
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Steelersfan
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Re: Exchanging USD to GBP

Post by Steelersfan »

ATM's accessed using your debit operated by major banks when you arrive in Europe, either in the airport, train station or at bank premises.

I've done it dozens of times on many trips.
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kramer
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Re: Exchanging USD to GBP

Post by kramer »

obgraham wrote:I see this topic repeatedly in fora such as this.
I can't understand the problem. When I go abroad, I simply stop at the nearest ATM and get some cash, be it Sterling, Euros, Quetzales, Soles, or whatever. Sure, there's always a buy/sell spread. There is when you do it at home, too. That amount is not worth monkeying around for days at a bank.

But then, I don't know how you go into a bank -- haven't been in one in years! Do they still have a door?
I basically agree with this. However, I always try to have a backup plan and always have at least 2 ATM cards. So I will carry enough dollars (including a few small bills) to exchange for that first day or so, in a pinch, in case the ATM cards don't work or the network is out or the machine eats my card or . . . Once, when I landed very late in a small airport in Colombia, flying from the USA, I forgot about the ATM machine and then I was out front and couldn't easily get back in the airport (many countries allow no entry into an airport without a departing ticket). Other times I have landed late at a smaller airport and all the currency exchange are closed. In the Philippines, many ATMs go off-line for much of the time, especially at night, there will even be an off-line sign . . . so I just try to do a little initial planning for that 1% case when first entering a country.
Bmac
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Re: Exchanging USD to GBP

Post by Bmac »

1. I usually get some of whatever currency I need from my local Wells Fargo before leaving just to be sure I have some currency upon arrival.
2. I agree that the ATM machines are the best way to get additional currency once in the particular country. Note, that you must have a 4 digit PIN in order to use the foreign ATMs.
killjoy2012
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Re: Exchanging USD to GBP

Post by killjoy2012 »

I've traveled to at least a dozen countries in the last 5 years, and I've always just used an ATM at the destination to get local currency. Never an issue, conversion rate has been the bank's daily rate, etc. I have a couple travel friends who don't feel comfortable flying out of the US without some foreign currency in their pocket, and I always laugh at the raping they take either at the airport, bank or "discount" currency exchange place. Take an ATM card that is well accepted (I'm a member of small CU and I've never had a single issue), and a couple cc's that have NFT fees... all you need. Especially for the UK. And just watch how much cash you have on hand towards the end of your trip... try to get it close to 0 by the time you fly home. I too normally just keep whatever I have left... not worth the fees to change it back to USD.
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