Protecting Against Currency Swings

A snowHead

Prompted by a Martin Lewis MSE article, link below.
It mentions 3 travel currency providers who allow a 7-14 day gap between ordering and collecting. Then also the facility to cancel the order, with very small penalties, should the deal turn out not to be so good after a currency swing.

With a General Election there’s a risk of such a swing. The euro:GBP exchange rate is best it’s been for a while. Ordering today but covering against a swing seems a good idea.

Martin Lewis mentioned Travelex, Moneycorp and Sainsbury’s as good for this.

I reckon snowHeads might know better options.

https://www.moneysavingexpert.com/travel/cheap-travel-money/#need-6

A snowHead

revoult, starling, etc. give a much better rate than anything over the counter.
if your happy with the spot price, then load up & work out your average.
If the currency does dive, you can always sell & make a profit.

Well, the person's real but it's just a made up name, see?

@Mr.Egg, thanks, but have no real interest in becoming a very small time currency dealer.

Looking more at getting an order in at a decent rate, which I can just cancel the other side of the General Election, if it’s no longer a good deal.
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revoult app is currently showing 1.1843

best online exchange I can find is 1.172
Travelex from your link is a shocking 1.152
Money corp from your link is 1.1699

unless you are changing thousands, you are gambling on small margins of a few % points. It's hardly a holiday deal breaker + you will already be near 3 cents for every £ better off by using revoult instead of travelex.
If it dives the other side of election, then you have got yourself a very good rate.
If it gets better, then you simply average up Laughing

Anyway, snowHeads is much more fun if you do.

With Revolut as well you can fund it with GBP then setup automatic conversion rate triggers to batch convert between GBP and Euro accounts (+ more now), and back again. If you are nifty you can ladder your funds up without any work, and in any event you can catch any short term increases. I've been using this for ages now and recommend it.

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@Mr.Egg, @orange,
Thanks, I’ll take a look at revolut.
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Then you can post your own questions or snow reports...

Agreed on the Revolut auto-exchange facility, which I've used to lock in improvements in rates. But do ask yourself how much this matters - if you are ordering currency for collection, then you are taking spending money for a holiday. Let's assume you take out £1000 in euros as the maths is easier - in the last month, the rate has been as low as 1.16 and as high as 1.19, so you would get between €1160 and €1190 if you got the interbank rate. Congratulations, you can make €30 out of it! However, with the dire rates offered by consumer FX companies (with the emphasis on con), you'll lose all of that to their dire rates, and then some even have the cheek to charge 1.5% commission on top...

If the rate drops to 1.05 on Friday, what will you do? Cancel the currency transaction and spend nothing on your holiday? Or go ahead anyway while grumbling? The only real answer is to do it now while the rate is at a yearly high, and if it improves again then at least you haven't lost out. Or do half now and half later - that way, you half your gain or loss. And even then, is it worth the hassle for €15?

After all it is free

One caveat with Revolut though is the cash withdrawal limit, normally £200 per month on the standard plan (£400 on the premium plan), after which you pay a 2% fee for cash withdrawals. Some ATMs will also hit you with a 1.5% credit card fee as well from experience, even though Revolut is basically a debit card. For Austria in particular where cash is still the norm this can quickly mount up - I now pay for all the big stuff up front where I can so I can use a card, or for accommodation I typically send the deposit direct to their bank account, and then also send the balance while I am there rather than settling up in cash on the last day as used to be standard.

Agree with the comments on cards like Revolut ...... we have one in place mostly for this.

If you're old school and want a reasonable rate, where you can actually take cash along and pick up your foreign currency, possibly more of a last minute thing, no1currency aren't the worst choice.

Reserve online for best rates and rock up usually couple of hours later to collect, assuming it's a popular currency in a reasonable amount.

I guess you can trawl the internet and pick up a fraction here and there, but they've lots of local pick ups and there's little risk exchanging folding for folding ....... no I've no affiliation.

[Two threads running similar at moment, I'm kinda cross referencing this as well]

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@ousekjarr, I know hat you mean...but if lucky enough to do several weeks in euro zone, every bit helps.

Might also discourage those that give lousy exchange rates to either give more or pack it in, if more people ignored them.
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@ousekjarr I wasn't saying this was a way to get rich quick, but its 30Euro for free by doing about 3 things on the App so every little bit helps !

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@orange, agreed - but people will still walk into a post office and accept 1.13 or their bank with 1.12 or even a kiosk at a supermarket at 1.10, but the reality is that unless you are buying property it is small change. As tempting as it is to watch the exchange rate on Revolut and decide that 1.1842 is not good enough and you'll wait until it gets to 1.1850 before pressing the button, on a £1000 exchange that's 80p of difference wink

and the same person will probably then get €200 of it out of an ATM as cash and accept the 1.50 charge for doing so...

For my Dec/Jan trips, I bought some cash last week at 1.16 something and will use my Clarity card whilst away if the exchange rate stays good to spread the cash out for more trips. I always find some cash helpful). If the rate drops if there is a post election mess then will use more cash for the Dec trip and hope once the mess resolves rates improve again so I can get more cash/use the card!

You know it makes sense.

or have a Euro bank account somewhere so everytime the rate gets to where you want it you move some money over!

Otherwise you'll just go on seeing the one name:

@DrNo, yes I have a Clarity card and that’s a good rate. Good advice on the cash.

@marcellus, thanks....might even move to Outer Mongolia after tomorrow

A snowHead

A snowHead

Another benefit to the Clarity card is that if you debit your account before using it to take cash out in a foreign currency you get the MasterCard rates and you pay no interest. Their T&Cs state that you pay daily interest on cash withdrawals until the balance is paid — so if there’s no balance, there’s no interest!

Well, the person's real but it's just a made up name, see?

The Clarity card changed its terms end of 2018 .

You will pay interest on cash withdrawals even if the card is put in credit now no matter what ...... where previously you didnt if you loaded the card with cash .
By previously loading it you stopped the cash advance interest clock ticking ..thats over finished now unfortunately .

I used too load the clarity every season for about a decade it was a very good card as paid it £60 a year cashback/profit at one time and received excellent rates of exchange

The way to use it now is too have no direct debit and load it but then pay it off in time if its in debit ..... so its just not as simple .
Most people couldnt understand the previous loading method as the bank stated you couldnt do it .
Bankers say alot of things all of which suit themselves and not the customer .

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Sorry ,Yes I was making two seperate points and credit cards are not easy to understand so I should have kept it simple .

The main point is the cash advance loophole is now closed and you will pay interest on cash advances even if your Clarity is in credit or if you pay it off early before the direct debit .

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Then you can post your own questions or snow reports...

Not anymore unfortunately I wish I was wrong !
If you withdraw cash you will pay from day of withdrawal until the direct debit pays it off ....even if you put the card in credit via any method ie, counter or online when away .
In a nutshell you cannot stop the cash advance clock ticking anymore the terms have changed last year .

At one time if used correctly and you didnt listen too the numptys or bankers rubbish or manipulation it was the best card on planet earth worldwide .
Its order of payments were not like other cards either.

After all it is free

You certainly "could" put the Clarity card in credit with a over the counter cash payment which I did every year since was it released in 2008 or was it 2009 ?
Many others reported doing the same in practise ie. they did it in practise, they didnt sit reading T and C,s and pronounce how naughty you are so the bank could profit further .
I dont follow rules because a banker wants too profit from my use...... if I can real world test and manipulate the use of a card for my benefit .
Just because terms an conds say this or that so the bank profits from your use .....does not mean you have to play that game.... if a loophole exists .

As Spyderjon says you could in the past also stop the cash advance clock ticking with payments to the card online from a current account for example .

That will not happen now you will pay interest on a cash advance on your clarity card until the direct debit pays it off .

Sadly none of the past cash advance tricks matter now .....the terms have changed last year .
Also Sadlly the very good overseas spending barclaycard offer has gone for new customers .

The banks are tightening up and moving the goal posts in alot of areas as the app based cards an accounts take a market share .
Overdraft rules for banks have just come into effect in the customers favour ...so the banks are moving the goalposts again with overdraft charges .
Although nothing to do with the clarity its how they play ball .

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@spyderjon, it still works for me too, and I have a direct debit set up. I'm not surprised it works, as it's what the T&Cs say will happen.
If you put the money in first, it won't work, as the deposit will be used to pay off a different balance (assuming you have one, or they can send the money back).

@sugarmoma666, I am making the point that the Clarity will not work like it used too since sept 18 changes .
If you were not actively using the available workaround on the clarity to its full extent worldwide over months not paying a penny in interest then you wont know it .

Of course its doing what it says on the tin as of sept 18 up till now..... it took about 10 years for them to wake up as more and more paid no interest .
How do you expect the bankers are going to pay the St Moritz trips ?

Spyderjon you are 100% correct but this no DD method is not for me long stay I tried it last season far too much work for me personally .
By all means test it as I did but for long stays the card is just a backup tool in the box for purchases now .

PS the card changed in sept 18 I dont remember the exact date but the big picture is that doesnt matter ..you pay cash advance interest with a DD.

The only work around is as you suggest by stopping the DD but its convoluted and has risk long stay .
Road closures ,no power ,car wont start ,people get hurt and internet goes down this is when you need sharp easy to use no cost overseas spend tools and backups .

You know it makes sense.

@Tirol 164, as above, no need to stop the DD. I've used the card extensively overseas since September 2018, and you can still pay off the balance of non sterling currency advances as soon as they settle on the account, the same as you always could.

Otherwise you'll just go on seeing the one name:

In the OP context of travel currency: How much is an annual week's skiing holiday in the Alps for two? If I buy my foreign currency ahead of time, not at the airport or at an ATM in resort, how much will I generally save against any of the alternatives? When I do that calculation, then for me, the effort really isn't worth it.

When I was young, there were no credit cards (for 'ordinary' people) - at best, you could buy and take travellers cheques. Some European countries wouldn't even let you take their money out of the country. You had to register your foreign exchange transaction with a UK central government agency, because there were currency controls in the UK. When my wife and I took our first camping trip abroad we took a card with us, but using it would have involved a likely international telephone call to the UK to confirm the transaction (if the retailer/hotel agreed to making the call in the first place - no mobile 'phones then).

We've moved on so far since those days that simply being able to use a card abroad, even with a charge of some sort, represents so much of an advance that I can't be bothered with eking-out another few % saving on the transaction.

A snowHead

“After 21st September 2018, if you have a Direct Debit set up to make payments towards your balance and you make an additional payment before your Direct Debit is due, your Direct Debit will not be reduced....This change means that any additional payments to your account will no longer affect your direct debit payments, helping you pay off your balance more quickly.”

The cards use has changed if it doesnt effect or matter to the individual then its not important

If it does make a difference then you need to rethink your travel cards that suit ones personal use .

A snowHead

@Tirol 164, OK, but that change isn't relevant to whether you pay interest on cash withdrawals if you pay that part of the balance as soon as it settles on the account, so what I've (and others) have said above still stands.

Well, the person's real but it's just a made up name, see?

Isn’t it just saying that if you make an additional (early) payment before the DD date, they will no longer reduce the calculated DD by the same amount - ie you end up overpaying that month, and being in credit?

You would still avoid being charged interest doing though - but (as its always been), you have to pay off any purchases first, so you’re trading off the interest free period on those.

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On Election night I watched the £:€ jump as soon as the exit poll was announced. On the Revolut app I watched it fluctuate to over €1.21 to £1 but it then began to fall back. I secured a lump at €1.203 which was much better than the €1.08 I got in June for my summer holiday. I've booked my hotel in Bormio direct so I'll use the Revolut card to pay for it and the list passes.

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Protecting Against Currency Swings

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