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Is it just me that finds exchange rates, bewildering.
Having problems recently I was directed to a web site from the help room to download a program, forget which one.
No I havn't just found it in my e-mail folder, it was Registry Mechanic. However the registration fee was $19.95 this worked out at todays rate about 1.70 I thought £11.73 so got the Gold Plastic out and proceeded with the purchase, Total Cost £16.44 That's nearer $28 even allowing for tax which on all my visits to the states have been never more than 6% it still seem a little high. M
I just bought $45 worth of goods via my paypal account and I will was be debited £25.88 on my credit card. This converts to nearly $1.74 USD > £1. As GANDALF says, the $ > £ rate is based on how the money markets are performing at the time the conversion takes place.
Did you get the cost of £16.44 from your bank statement or at the time of purcahse? If the bank statement then it is quite likely they have charged you some kind of handling fee.
I use click here for my conversions and today it says $19.95 is £11.24. As others have said your bank may charge a handling fee, fortunately, my bank doesn't.
they probably do. The Post Office states that it does not charge commission (under competition) but they make it up with with a lower exchange rate. No bank does anything for nothing.
Further, there are two rates, one is the standard rate (used in business transactions and published in the daily papers) the other other the traveller's rate which all banks use for credit card purchases. This rate is lower, again allowing the banks to cream off a percentage.
Southernboy. I downloaded a programme listed at $19.95 which converted to £11.73 at the time. I have just checked my statement (online banking) and it says $19.95 @ 1.7 = £11.74 which is all they charged. I used a Debit card not a Credit card. Maybe it is different for Credit cards?
I use my Barclaycard fairly often in France. The statement always says, "including a commission charge of £X.XX, (which appears to be a % of the total).
However, when I work out the effective rate of exchange, (i.e. what I actually am paying), I get about the normal tourist rate. The same applies when I have used it in Spain. I guess they start with the commercial exchange rate, then add a commission charge, which gives more or less the tourist rate.
One thought, have they added VAT?. I read somewhere that this loophole was to be plugged.
Being an accountant I do not want to sound derogatory but I do know about exchange rates.
I bought the item last weekend (rates at 1.70 ish.) anyone can look at the site it is $19.95. I paid with Credit Card, and only use debit cards when necessary, such as Nochex, The charge was £16.44, the cost is immaterial to me I needed the program so just proceeded through the checkouts. I was informed of the cost before hitting the submit button, and had no need continue without accepting the costs. The annoying thing is $19.95 equating to £16.44 for a download. You can call it what you want I call it misleading for want of a better word
"Is it just me that finds exchange rates, bewildering."
"Being an accountant I do not want to sound derogatory but I do know about exchange rates."
there ARE different rules for Debit and Credit cards. However, I find that Thomas Cook charge a premium for purchasing currency with a Debit card but not if a cheque is used! What's the difference? According to Thomas Cook, both cards go through the Visa system and all purchases are regarded as a Cash Advance alhtough it clearly is not with a Debit Card.
I cannot comment on all banks, but the fact is that banks generally charge for a service in one way or another. Perhaps it is the case that they get the exchange at the commercial rate and only allow the tourist rate? You can bet that they have made something out of the transaction. To do something for nothing is simply outside their ethos. How do you think they make their millions?
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