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Banks and card companies will drop some currency fees

TheIslander
Grafter
Posts: 95
Registered: 13-11-2011

Banks and card companies will drop some currency fees

http://www.bbc.co.uk/news/business-16259123
Banks and credit card companies have agreed to scrap some charges they levy on holidaymakers buying foreign currency.
The move comes after pressure from the Office of Fair Trading (OFT).
The firms are also promising to display other costs more clearly in their monthly statements.
The OFT has been investigating a complaint from the watchdog Consumer Focus which claims the companies make £1bn a year from travel money charges.
The watchdog's complaint said that converting £500 into euros could cost between £10 and £30, even though the service provided was essentially the same.
Five companies - including Lloyds, Barclays and RBS - impose charges of between 1.5 and 2% if customers use their debit cards before leaving the UK to buy foreign currency.
They have agreed to scrap this charge.
Banks and card companies will also show separately on statements those charges which are incurred overseas, including the typical "loading fee" of nearly 3%, rather than hiding them in the cost of the items travellers have bought.
The OFT is also forcing currency businesses to review 0% commission offers and reveal what the costs actually are.
Consumer Focus said charges for using debit or credit cards overseas were unnecessarily complex and confusing, adding that phrases such as "0% commission" and "competitive exchange rates" were misleading.
It says that exchange rates already include mark-ups levied by suppliers and so are not fee-free as the 0% commission might imply
A spokeswoman for the OFT, which will issue its response to the original Consumer Focus complaint on Tuesday, said there had been a substantial reaction to its request for information.
Consumer Focus points out that it costs banks and credit card providers an average of 9p and 37p respectively to process debit and credit card payments.
6 REPLIES
Community Veteran
Posts: 18,545
Thanks: 191
Registered: 12-08-2007

Re: Banks and card companies will drop some currency fees

It's a good move to make the matter clearer. I can't understand anyone using a bank to purchase currencies. There are much better places to buy.
itsme
Grafter
Posts: 5,924
Thanks: 1
Registered: 07-04-2007

Re: Banks and card companies will drop some currency fees

Just been making some Swiss Franc transactions for my holiday starting in a couple of days and I use a Halifax credit card as they do not add fees or load the exchange rate.
Currently the Bank Exchange rate is 1.456 and for the online purchase when it hit my account I got a rate of 1.46 and the tourist Rate at the Post Office is 1.407.
A friend said to me on Saturday was it worth worrying about as I been recommending the Halifax card and a Currency card and I said it was as by the time I finish paying for Skipasses and Ski hire it will be £20 to £40 saving compare with paying with another credit card or paying cash.
Community Veteran
Posts: 7,911
Thanks: 592
Fixes: 8
Registered: 02-08-2007

Re: Banks and card companies will drop some currency fees

However where the banks lose one source of income they quickly make it up by increasing or introducing fees in some other area or decreasing interest paid on some accounts.
Community Veteran
Posts: 5,316
Thanks: 465
Fixes: 1
Registered: 21-03-2011

Re: Banks and card companies will drop some currency fees

Wink peace for a week or two...
Now Zen, but a +Net residue.
TheIslander
Grafter
Posts: 95
Registered: 13-11-2011

Re: Banks and card companies will drop some currency fees

But I bet they will find a way to charge for something else instead. Got to pay for those bonuses you know. Wink
Community Veteran
Posts: 18,545
Thanks: 191
Registered: 12-08-2007

Re: Banks and card companies will drop some currency fees

A good site for checking the best rates is:
Currency Rates