UKC

I thought this year for my Alpine trip, I would use a 'Cashcard': which is a preloaded Visa / Mastercard style product. It is designed to make more transparent the hidden fees normally associated with Debit and Credit cards.

So far, so good: the 'pre-load' fees were clearly stated @ 2% of whatever Sterling I chose to pre-load onto card. I thought this was expensive but I rationalised this as the costs for the firm to run a Pre-load card scheme. I had been told my fees, so it was my choice.

(On a side-track & to use the 'real time' approach favoured by some of the on-line financial advisory services - for a two week holiday the cost of pre-loading the card was equivalent to 52% APR!)

I thought I had read the small print sufficiently and although the Sales Advisor couldn't tell me what the likely Exchange rate would be for me to use the card in Switzerland, she advised me that the current retail currency rate was around £1 / 1.31 Swiss Franc (CHF)

However, the story, now I have used the card, becomes gruesome: remember that I had already paid a 2% charge simply to put my cash onto my card.

Having returned from Switzerland, I now find that the promotional statement advertising an absence of fees is offset by the extortionate Currency Exchange rate. The rate shown on my statement is £1 = 1CHF when the UK High Street rate (29.07.13 @ 1144hrs) is, at worst, £1 = 1.3CHF! (The current buisness rate is 1.43CHF)

So, a 50CHF purchase was £50 instead of something nearing £38.46 at the retail Currency Exchange rate - the difference being an equivalent fee of 23.08% or at the current Credit card Business rate the purchase would have been £34.96 / 30.08% fee!

You've probably done the maths already but to put it in writing, the additional cost of that one purchase was equivalent to 25.08% - made up of a Pre-load charge of 2% and a loss of 23.08% (£11.54) on the Exchange rate for a 50CHF purchase. Giving a total, as already written, of a 25.08% equivalent fee!

No Credit Card charges come anywhere near this; so I would seriously advise folk to avoid using these pre-loaded cards at all costs...unless you know different?

In reply to Andy Cloquet:
Woo did you use?Is you card preloaded with sterling?
We have preloaded caxton cards with euros on them at a very good rate and had no problems(obviously wont work in switzerland).

In reply to Mike_Watson_99:

You may well have hit the nub of this by asking about pre-loading in Sterling. The card I have used wouldn't accept pre-loading in CHF, probably because the Currency Exchange rate is very favourable for Sterling; as it is for the Turkish Lira which also can not be pre-loaded onto my card.

In other words, the cards are not designed to enable the Sterling customer to benefit from the favourable rate but actually penalises us and enables the card issuer to make exceptioanl profit at our expense!

In reply to Andy Cloquet: Yes, tested this with a £20 load for an overseas visitor. Lesson learned....

In reply to Andy Cloquet: I have found the Caxton Euro card works well and is cheaper for most purchases than credit/debit cards. However, using it in other currencies (including CHF) would be costly. They do however do USD and "worldwide" cards which I think would give good rates.

In reply to Andy Cloquet:

That's just like "commission free" exchange. Personally I think that should be banned, and all transactions should be carried out on the Bank rate (same both ways) but with a separately itemised sum (%, fixed or both) for commission/fees.

Neil

In reply to Andy Cloquet:
For purchases I just use my credit card, that's the visa base rate (which is very very good) with no extra charges at all as long as I have made equal purchases in the UK (which I have and I get an additional 0.5% back from too).

For withdrawing money I just use my debit card also the visa base rate but I loose about 3% in total doing that (small charges for withdrawing and commission), but no biggy as most the money spent is on the credit card!

This method has the benefit of working well wherever I travel in the wider EU area. I'm with one of the major building societies.

In reply to Andy Cloquet:
I have a Paypal cash card, linked to my Paypal account, costs nothing for the money to go in (well, in theory, items I sell on my website lose about 2%, but then again Paypal allows people to use their credit cards to buy from me over the internet). As far as I know I can load it form my bank account for free as well, but I haven't done this for over a year.
Cash withdrawal fees are pretty much the same as for my debit card.
However like so much in life big business has tried to make things as confusing as possible. What we need is a system where currency & cash card businesses have to all use the same fixed (daily) exchange rate, then put a single clear commission percentage on top, so that us consumers can compare like with like.

In reply to Andy Cloquet: All points made, folks, are succinct and excellent. The additional point I was rather ponderously trying to make was that my 'Cashcard' was advertised in a way that tries to sell its advantages over supposedly fee-based Credit cards. The Sales advisor clearly didn't really know the product she was selling and by quoting verbatim the statements on the advertising leaflet she didn't expose her employer to any charges of mis-selling. Mind you, she was probably paid a pittance for her labour and given skeletal training - the Gerald Ratner approach 'pay shi*e get sh*te'

Certainly the single currency exchange rate would level the field to equality and make the various companies fight through Service - ie: low fees and additional benefits. As it stands at the moment, the loaded dice will always fall against the consumer who is increasingly bamboozled by deliberately elusive and complicated charges and commissions. Clearly currencies which currently give the Sterling user an advantage are seen as ripe pickings for the currency sharks who simply wipe out any beneficial rates through very hidden and despicably penalising charges wrapped-up in extremely poor Currency exchange rates.

In reply to Andy Cloquet:

I've never seen a good reason to faff over just using my own credit/debit cards. There are fees, but they are not excessive when compared with all the other massive costs of going on holiday.

I wonder, on the subject of this cash card, if you could get around it by selecting DCC?

Neil

In reply to Andy Cloquet:

Cash is king matey! Forget anything else