FX Rates when Cashing GBP Cheques

[rebeluser]

I'm sure others have had the same issues but I am working in the UK and from time to time lodge Sterling cheques into my Irish Bank account for expenses/expenditure while home. Where are the best deals available for FX rates as at the moment I'm just getting highstreet Bank FX Rates - I'm sure there is a cleverer way of doing this - any suggestions?

Thanks in advance for any replies/advice.

 

[WizardDr]

If its for expenses, the best way would be to have a UK domiciled credit card assuming that a fair proportion is in sterling. This would eliminate the rate problem on that part. The next piece is if you have Euro expenses, firstly the rates that credit cards companies use are slightly better than you will get in a bank. You also avoid transaction costs on (i) the cheque; (ii) converting back and forward from that account and (iii) if there is surplus in the credit card, take it out by ATM either in sterling or euro depending on where you are; (iv) no time delay.

 

[RainyDay]

firstly the rates that credit cards companies use are slightly better than you will get in a bank.

Are you sure of this? Most credit card companies quote FX commissions of 1.75% to 2.5%, which I understood to be on top of the normal bank fx rates.

 

[CCOVICH]

I think the rate I get on my credit card is slightly better than the high street rate.
On Oanda.com, the fx convertor (http://www.oanda.com/convert/classic) shows the credit card rate as interbank +2% and the cash rate as +4% (I know this might be just a US thing?)

 

[WizardDr]

There may be charges on the cash extraction depending but this is not universal, I was also assuming that the ole credit card was in credit. Still beats all the coming and going and avoids all the other charges on the bank account operation.

The 'extra' you mention does not arise on the straight debits for normal spending. Commission might apply to cash extraction, but this varies form NIL upwards.

 

[RainyDay]

The 'extra' you mention does not arise on the straight debits for normal spending. Commission might apply to cash extraction, but this varies form NIL upwards.

That's not my understanding - From [broken link removed]

Any amount (other than a euro amount) charged to the account in respect of the use of the Credit Card in Ireland and abroad will be converted to euro at an exchange rate determined by the Bank on the date such amount is debited to the account.

A cross-border handling fee of up to 1.75% may apply to such transactions and to euro transactions undertaken outside the European Union.

 

[WizardDr]

Hold on..
- the premise was that the guy could get a 'sterling' denominated card;
- that he was getting sterling cheques that he could therefore lodge as payment;
- and that euro debits for purchases could also be debited;
- as to outside EU ..in practice all the bank is doing is reserving a positon for non mainstream currencies.

He could of course stay the way he is and suffer all the transaction charges on the operation of a euro account in ireland with the time delay to clear the account.

 

[RainyDay]

- and that euro debits for purchases could also be debited;

With the additional FX commission that applies to every euro debit on his GBP credit card (assuming UK card issues have similar charges to Ireland).

 

[WizardDr]

Hold on.. when purchases are debited to a credit card account, there is a rate on the posting. This is usually more attractive than any over the counter rate. I dont see where the 'additional commission' is coming from. If the rate is poor, then potentially that is a different matter.
Maybe I am missing something? Cash advances may be different, but if your account is in credit, there still may be a fee for ATM use but not in all cases.