fiestas around moriara

Hi Angela

If you are worried about using your spanish credit card there's nothing stopping you from using your english credit card.
Just an idea.

Hi Angela,

I would suggest that if you have the Euro's you are best to pay directly in Euro's.  If you use sterling and then transfer the Euro's back, you may be getting a better rate than you paid, but chances are that the rate you get on your purchase will be worse than that you get when you change the Euro's back to sterling, so you will lose out.

eg:  You have (say) 1000 Euros - it really doesn't matter what the rate was when you bought them, as you have them now.

You spend 1000 Euros on your credit card at 1.25, which costs you £800

You convert the 1000 Euro's back to GBP at 1.28 - £780 - it has cost you net £20

Obviously the amount depends on the various rates, but basically to make it worthwhile you need a better rate for buying GBP with the Euros you have, than the rate you are getting for buying Euro's on your credit card - that is unlikely.

Obviously the financial side needs to be balanced against the convenience of using the respective cards, and any charges.

Ted

Hi Angela

Firstly I am not aware that Spain has anything similar to section 75 of the consumer credit act? 
Reading the blog from the Lawyer Maria, she is definitely talking about English Law as she makes reference to the British pound and the House of Lords.

In this climate I would only make forward payment in a way that is protected by British credit card law preferably one like Nationwide, as you don’t pay commission on conversions and exchange rate very good. Or I would see if the payments could be held by a Lawyer or see if the shop can provide a bank guarantee?

Ted’s comments on conversion back from Euro to Sterling I thing he has accidentally got it the wrong way round.

Say you had exchanged 1000 pounds Sterling last September the rate was about 1.45,

Being 1000 GBP would have given you 1450 Euros

Changing that same money back at today’s rate being about 1.25 you would get about £1165 pounds making a profit of £165 pound sterling.

The true calculation at today’s rate at the moment is:

1450 euros @ 0.8040 = £1164.80

So even if you paid a fee to covert back you would do OK, before making any decision ask whomever you would use about fees and exchange rates.

Hope this helps but I probably have just added to your confusion.

I am sure Shampers could explain this far better than me.

Regards

Phil

Get yourself a credit card that gives 12months zero interest on purchases.

Open a high interest account (whereever) and every month put your money needed to pay the credit card bill into it.

After 9 or 12 months when the interest free period is about to end, empty the high interest account and clear the credit card.

You've just made a return of (high interest rate x 69%/59% / %of year invested) which easily covers any commission charges and gives you the s75 protection.......... buy all your furniture and white goods this way is my view.

Hi Phil,

The point I was making was that if you already had the Euros the rate you got them for is really irrelevent - You have already made your "profit" on the Euros ie. The difference between the rate you bought them and the current rate.  If you then pay with your credit card and transfer the Euros back then the cost in doing so is the difference between what you get on your credit card and what you reconvert the Euros at.

So in your example - bought £1000 of Euros at 1.45 gets you €1450 euros.  If today the standard rate is 1.25 then you have benefitted to the tune of £165 whatever you do.

If you are now spending €1450 Euros and you use your card and get 1.24 you pay £1170.  If you reconvert your Euro cash to GBP @1.28 (no idea what the actual spread would be but 3-4% seems reasonable) you get £1130.

So yes you made £165 from your original purchase of Euros - but then lost £40 by using the UK credit card and reconverting your currency.

That probably doesn't clarify much - I also work in finance.  My only comment was if you do get the protection and already have the Euros, little point in converting them back and letting the banks win on both sides.  If there is no protection then as Shampers says, if you can get an interest free offer on a new UK credit card and invest the cash you can cover the costs.

Ted

HI Ted

I don’t work in finance, so my view is personal not professional. however the point of the question on the thread was protecting forward payments and the possibility of the company going bust with the money. Along with other suggestions I made I was just suggesting by using a UK Credit Card the money should be protected and they shouldn’t be out of pocked by doing this and that would be better than losing the money if the worst happened. As they say, you pays your money!

Regards

Phil

Hi Ted

I will say SORRY

I like you, was just giving an opinion to the question that was asked, I didn’t understand your original post and assumed you to be saying that by changing the euros back to sterling this would lose them money, and was suggesting it wouldn’t and by doing this they would protect their money.

I am sorry if in doing this I have upset you by wrongly suggesting you may have made a miscalculation, but unfortunately I didn’t understand you post and your subsequent explanations of it, and for this I am also sorry. The main issue is giving the person that has asked the question our honest opinion which I thing we both have done, and they are helped by it. Our getting upset with each other due to misunderstanding one and other is pointless so I will just say again I am sorry for misunderstanding you. I will now take myself back to the naughty step and see if Shampers is still there.

Phil

You have gone to far now, I am not taking off the Lycra!