Foreign Perspectives

Archive for the ‘Business’ Category

When you look around in a new country you generally bring all your preconceptions as to what a bank is with you.

Typically, the assumption is that a financial organisation is a bank if it issues credit cards, debit cards and cheque books whereas it’s a building society if it largely confines itself to savings accounts and mortgages. Of course, in many countries such distinctions don’t exist 100% of the time and there’s usually something of a graduated scale between building society and bank in most countries these days.

In fact, a more realistic distinction these days is probably based on size (however that might be measured) and perhaps the extent of international activities. So, for example, although most people would call the likes of the Halifax in the UK a building society in fact in both legal and practical terms it has been a bank for many years. For example, it has been issuing cheque books since the 1970s if not before and has had international activities for a substantial time too.

On the other hand, the various Credit Agricoles in France are clearly in the building society camp. Yes, they issue cheque books but their debit cards aren’t run by themselves and their international activities are nil, at least as far as the regional Credit Agricoles go.

Spain by contrast has the fairly substantial La Caixa which is a savings bank in name only although with few international activities up to now.

Not so long ago there were all kinds of restrictions on transferring money abroad due to currency controls that lots of countries had in place. They’re almost all gone now and it has become more of a natural thing for “ordinary people” to need to transfer money abroad.

Most of the time it’s due to holidays, of course, but an increasing number of us are becoming small scale international jet setters with homes in more than one country and with both of those come a need to transfer money abroad.

Holidays usually involve a different category of currency conversion in that you are on the spot when you need the money, the amounts involved are smaller and you probably don’t have a local bank account. However, whilst the amounts may be smaller individually, added up over the years they will come to quite a hefty sum. Also, many of those who holiday in the same country each year may be considering the purchase of a property there and so have that local account too.

Most people ignore the costs of all those international transactions to their detriment. One friend of mine found that almost 10% of his entire salary was going in such bank charges simply because he was living abroad and using his “home” account in exactly the same way that he always had ie lifting small amounts frequently.

Saving money on those transactions is usually fairly easy. If you don’t want to change your bank, check out exactly how they charge for use of credit, debit and cash cards abroad. You will usually find that debit and cash cards are more economic ways of getting cash than credit cards are in that you won’t be paying interest on the money. However, that’s not to say that they are cheap. Typically a withdrawal of £100 in the local currency will cost you £4 to £5 but note that this includes a fixed transaction charge so withdrawing £20 will cost you around £2 ie 10% whereas £200 would be about £7 ie 3.5%. You can eliminate these charges altogether if you use the UKs Nationwide Flexaccount as it has neither transaction fees nor foreign exchange charges.

It’s slightly better if you buy things, usually. Using a typical Mastercard or Visa card will only incur the foreign exchange charge ie buying £100 of goods will cost you £2.75 and that £20 item would be 70p. Therefore you should buy things with the card directly rather than lifting the cash to pay for them.

What about larger amounts ie if you’re living abroad or have a holiday home abroad? Well, if you follow our advice and get the Nationwide Flexaccount you can lift £500 per day which means that it’s quite viable to use that card in conjunction with a local bank account to transfer amounts equivalent to several thousand pounds. You certainly couldn’t buy a house in that way but it’s enough to fund the payments for electicity bills and the like.

If you are talking thousands, then the usual way is to ask your bank to do a SWIFT transfer. This will cost around £25 plus there’s a currency exchange charge (which isn’t widely available). However, that too can be eliminated in some circumstances. For example, if you bank with HSBC then you can do free transfers to an HSBC account elsewhere in the world but the HSBC Premier account that you need to avail of this costs £20/month (unless you have £50,000 or more on deposit with them) so it’s not as useful as it first appears. However, if you are buying in Spain, the Halifax run to a free account which offers free transfers from Halifax UK accounts to Halifax Spain ones. What’s less obvious is that this route gives you a pretty much free way from pounds sterling to euros anywhere in Europe as banks are required to transfer euros at the same level of charges in other European countries as they do domestically ie to get euros in an account in France, you could transfer from the Halifax UK to Halifax Spain and from there to a French bank.

Other options include the use of the specialised money transfer services such as HiFX (there are lots of similar services around.

I was a bit taken aback by the very high takeup from our e-mail to Scottish B&Bs and self-catering places a couple of weeks ago. So many took it up in fact that I’m going to have to implement a redesign of the site for Scotland that I’d not planned on doing ’til next year at the earliest.

So, I figured that the takeup would be broadly similar in Northern Ireland. Yet, although I’ve mailed a similar number of places (allowing for NI being smaller), the takeup is only about 10% of that for Scotland. Less than that actually as I’m still getting new entries for Scotland from the e-mail of a few weeks ago.

The wording is identical too so I’ve no idea why the takeup should be so abysmally low: lower even than the notional 1% that I should have received.

I’ve been “hit” yet again by StumbleUpon for a post in the same subject area ie on The France Show.

As before, there are the usual hundreds of hits and diddly in terms of adsense income from them as, on the whole, StumbleUpon people tend to be looking for something fairly specific (which is pretty ironic given the nature of it, of course).

What I keep meaning to do is to use StumbleUpon in some way as I feel sure that there must be some way to keep the arrivals on the site in some way. So far though I’ve not sat down and done more than think a little about it.

Ideas welcome!

Between one thing another we didn’t get around to seeing the rally at all yesterday.

The morning went in a bit of a rush to get the rooms sorted out for all the race officials who were staying with us last night. Since they generally book the whole building, we were using a few rooms that hadn’t been used for quite a while which usually turns up a few minor problems that have arisen since their last use. That in turn meant a rush out for a few bits & pieces which took up the afternoon and then we’d to sort out the couple of things that turned up.

They weren’t using our neighbours as a pitstop this year so we didn’t even see the cars there!

Anyway, we’re hoping to get away this morning to see them on the next leg which is just up the road from us.