Friday, October 21, 2011

Foreign exchange - what happened next

To continue the story I started in the post below .... I noticed that the foreign exchange at Marks and Spencers also did a very good rate - in fact, over the counter, within two tenths of a cent of the same rate that I could get online at the post office. So I went there.

They didn't charge commission. However ... they said that if I withdrew money using a Barclays debit card (debit card!!) then Barclays would charge commission. I have to say that this baffled me - since when have a bank charged for using a debit card for making a cash withdrawal?!

However, I went to a cashpoint, withdrew (free) £300, went back to Marks and Spencers, and exchanged it for dollars.

Had I bought dollars at the airport, £300 would have bought me around $425. A week or so later, at Marks and Spencers, about £299 bought me $455. The exchange rate had changed in that time, and this accounts for around half the difference.

It's also worth noting that if you order money in advance to collect from the airport, the exchange rates are far less punitive.

Tuesday, October 11, 2011

Currency exchange - what is good value?

I'd always assumed that the cost of buying and selling currency was "much of a muchness" for your average person (ie. someone who is trying to get money for a holiday, rather than someone who is trading currency as a means of making a profit). Specifically, I thought that since I work at the airport and the exchange bureaux there did "a little bit more" for people who work there, I was getting a fairly good deal.

I was intending to buy some US dollars for a holiday. It's some way ahead, but the exchange rate is quite good, so I thought I'd do it now. There was a little queue for the first office, and whilst I was standing there, I clocked their exchange rate. The published rate in the newspaper was around $1.55 to the pound; I'd been watching it. But they offered to sell dollars at $1.40ish to the pound and buy at $1.74.

That was a pretty huge margin, I thought - almost 10%. So I thought I'd wait, and investigate other possibilities. The same day, the bank were offering $1.45 and the Post Office $1.49! To get some idea of how much difference this makes, if you are buying £500 worth of dollars for a holiday, you would get an extra $45 if you went to the Post Office. It's not the case that commission eats this difference up; in each case, the transaction would have been commission-free. I didn't look on that day at the rate I could get from a travel agent.

I then looked back at what we had paid for expenditure on credit cards. Payments made on credit cards last February, when the exchange rate had been around $1.61, had included a commission charge of around 2.7%. That meant that the equivalent exchange rate for purchases with a credit card had been at around $1.56 - comparable to the rate from the Post Office. I also looked at a transaction where I had drawn money out on a credit card abroad. The same commission charge is applied - about 2.7% - and there is an additional £2.50 charge for withdrawing money, but if you take a significant amount of money out in one go, this would be very cost effective. Bear in mind that the balance for cash transactions on credit cards may incur a higher interest rate, if you don't repay the whole amount every month. The commission rate for a debit card looked as though it was slightly higher, but the handling charge was lower.

So in conclusion ...

The best place to buy foreign money to take abroad with you seems to be the Post Office. But paying for things on credit cards when you're there or even withdrawing cash from an ATM using a credit card (in as large dollops as you can) will also get you a very competitive exchange rate.

Tuesday, October 04, 2011


... developed the concept of the 'context of situation', that is, that language is only really comprehensible if we take into account the whole context in which it occurs; the interlinking between the language that is used and the setting in which it is used.
Which about wraps it up for deconstruction.