Foreign Exchange Rate When Using An Atm Card

[Daffy D]

The first ATM was with Siam Commercial where the exchange rate was 62.05 to the UKP

The second bank was Siam City where the exchange rate was 62.18.

Either way, you're getting screwed by HSBC -- big time!

Whether or not your transaction was effective on 9 Aug -- or 11 Aug, when it was first reported -- makes no difference for the following observation, as I use 65 GBP, the lowest exchange rate found amongst these dates and forex reporters.

So, using your winner -- Siam City at 62.18........

divided by 65....

you get.....the fact that you're paying a 4.34% fee!!!...of which only the 1% foreign transaction fee is explainable. HSBC -- as JFC also reports -- ain't doing you any favors.

The SCB 20 baht caper pales next to these crooks....

Time to move on.

Jim I agree unfortunately I don't have a UK address anymore so am stuck with HSBC. They were the only ones that let me open an account for my UK government pension payments from here in Thailand.

As you can imagine their transfer charges and monthly fee, because I don't have the required balance take a chunk out of the meager UK pension - but what can I do?

[jfchandler]

I don't know the rules re the UK.... But I do know for the U.S.

There are plenty of people here in LOS who no longer have a traditional physical address in their home country. But they do maintain, exactly for the reason mentioned above, a physical mailing address (via mail forwarding services) in their home country, even if they are living full-time in Thailand. By doing so, you preserve all your options and flexibility re opening/maintaining banking and a range of other transactions.

[Chaimai]

Jim I agree unfortunately I don't have a UK address anymore so am stuck with HSBC. They were the only ones that let me open an account for my UK government pension payments from here in Thailand.

As you can imagine their transfer charges and monthly fee, because I don't have the required balance take a chunk out of the meager UK pension - but what can I do?

Daffy - get a UK address (use a relative and then have your HSBC post redirected there for at least a month).

Then you can apply for a Nationwide Flex account, have your pension paid in, get a good rate of exchange and no fees (avoid SCB!).

Happy to debate (and help find an address solution) - you may prefer PM rather than open forum.

[bendejo]

I’m glad I found this thread, as I was planning on starting one addressing the same issues. Thanks to the folks who posted all the helpful details.

Aside from my own quandary, I’ll post comments on maintaining a US address (see wamu episode below) and pulling maximum withdrawals.

I’ve had a Citibank account for years, and my situation is called “Everything Counts,” which means if I keep a combined total above $10k in my various accounts I won’t have to pay a monthly fee. This used to mean free ATM usage, everywhere. Then it inched up through a few conditions and is now a flat 3% for me, even at their own ATMs in foreign countries (in Thailand there is only one branch anyway). Me no happy, this comes to $500+ per year. I think it not for that $10k in savings I'd be paying $1.50 per withdrawal as well.

In a city in Brazil with lots of Citi branches/ATMs I did a little experimenting like the same-day withdrawals mentioned above, and learned that I got a better deal withdrawing from a Cirrus/Plus machine at another bank than I did from a Citi ATM. Go figure. (This was in 2005)

Maximums: one day (again in Brazil) I went to withdraw my daily maximum (I think it was 500 reals) from an HSBC ATM. The machine sputtered and hummed, then spit out a receipt that said no can do. So I go to the next one. I get a message that I already withdrew my daily limit. Okay, I still had a few bucks in my pocket, and Citi had a toll-free number from Brazil, so I was able to sort it out the next day. But if I was in a more immediate situation, well, consider the possibilities. And that is why I don’t like to pull the max in one shot, and why I don’t like a per-withdrawal fee.

The best deals I’ve found for foreign withdrawals on an ATM cash account, according to the fine print and getting people’s recommendations, were Charles Schwab and Washington Mutual (wamu, or as I’ve come to call them, wham-u!). I’ve had professional (read not as a customer) dealings with Schwab over years, and I cannot bring myself to use them, strictly personal reasons – just hearing the name can still give me the yips. So I decided to try wamu.

I couldn’t sign up online, kept getting reject messages, so I called in. This was in mid-July. I got a young fellow, obviously a salesman. I use a mailing service in the US to maintain a resident address (Earth Class Mail), and he told me the computer system rejected this address as it is a known mail service. This happened with my previous mailing address a few months before, somewhere else. I gave the address of a friend who I knew would receive it for me, and off we went, he told me my account number. He said it wouldn’t be official until I signed a certain form and mailed it back in, which would get sent out in a few days, then I would get checks ATM card etc. Well, we’re going on two months now and still no have. They immediately sent a welcome letter saying the form was on the way, so I know they got the address right. I’m even able to access the account online. A month later I called them and after a bit of a runaround someone it would be sent out in five days. That was nearly a month ago. Well, if you’ve been watching the US stock market this past week you know they’re putting the wham in wham-u! The way things are they are either going to fold or sell out cheap, or at least change their rates. All things considered I’m grateful for their screw-up. Now to just get my $50 deposit out of there.

So now I’m back to looking. I’ll follow up on some of the banks mentioned above. Thing is you never really know who is going to skin you on the exchange rate, and asking someone in telephone support is futile (“that was the exchange rate that day, sir”), so you don't know what you're getting until you've got it.

[jfchandler]

Here is one good example of a very stable smaller U.S. bank that provides a very useful checking account with ATM card that has no foreign currency transaction fees at all. No monthly account fees and they even pay decent interest on your deposits. Just one example of the kind of account that makes sense for those living abroad. I believe you would need some kind of a U.S. address to open an account.

http://www.salemfivedirect.com/

PS - Having a WAMU account is absolutely nonsense for anyone living abroad. Same with BofA and others...

[bendejo]

Just one example of the kind of account that makes sense for those living abroad. I believe you would need some kind of a U.S. address to open an account.

http://www.salemfivedirect.com/

Have you had personal experience with these guys?

Wondering about their exchange rates.

[jfchandler]

Yes, I've had an account with them for more than a year... no problem at all... good experience every time I've dealt with their customer service... Easy to reach via telephone or e-mail. Online banking and bill pay and a decent interest rate for a free checking account.

Only downside is they don't have their own ACH transfer system. However, you can use other accounts with ACH to pull money out of the SalemFive account or to push money into it.

Re the exchange rate, the rate you get in Thailand will be the rate from the Thai bank you use to make the ATM withdrawal. Since SalemFive doesn't charge any fees, you'd be getting the full exchange rate.

Their account comes with a MasterCard/Cirrus ATM/debit card.

[jfchandler]

Here's some third-party background information, and comments by people with their accounts....

http://bankdeals.blogspot.com/2007/05/sale...e-checking.html

[vagabond48]

Here is one good example of a very stable smaller U.S. bank that provides a very useful checking account with ATM card that has no foreign currency transaction fees at all. No monthly account fees and they even pay decent interest on your deposits. Just one example of the kind of account that makes sense for those living abroad. I believe you would need some kind of a U.S. address to open an account.

I have been meaning to ask, who here has a debit card that reimburses the VISA or MC foreign currency exchange fee. I wouldn't mind saving another 1%. I think some people here use the "foreign exchange" fee loosely.

I use Fidelity and Schwab and both charge NO fees and reimburses all external ATM machine fees (like SCB which I no longer use) but not the VISA 1% foreign currency exchange fee.

Are you sure the foreign currency exchange fee MC adds is deducted by SalemFiveDirect. I thought this was VISA/MC internal fee that reduces the exchange rate and is not transmitted as a separate transaction to the bank issuing the ATM card. As it stands now, VISA in SEA doesn't even transmit a separate transaction, for ATM fees, to my banks. I have to call my banks to let them know if I see a fee charged by the ATM machine (real pain). I have to do this when I travel to the neighboring countries but not Thailand except for past SCB withdrawals.

Btw jf, does Salem accept a foreign mailing address?

Just checked their site, very competitive rate, certainly better than my brokerage accounts.

Oops, the 3.5% is for 100K to 1000K. Why on earth would anyone put such large amounts unless they were taking advantage of FDIC insurance.

Another oops. They only reimburse upto $15/month while my cards are unlimited.

edit: added more content

Edited September 16, 2008 by vagabond48

[bendejo]

Yes, I've had an account with them for more than a year...

Thanks for this, I'll check them out.

If anyone is interested: I checked with eTrade for a checking account (called Max-Rate Checking). I have my IRA with them so I thought to leverage that against being charged a maintenance fee. I found this:

Please note that ATM fees assessed at international locations, and Point of Sales (POS) transaction fees, will not be refunded. E*TRADE Bank does impose a charge equal to 1% of the transaction amount (including credits and reversals) for non-U.S. currency ATM transactions. For additional information and important details about how the ATM fee refund will be applied, please visit: http://www.etrade.com/atmrefundpolicy

(Note that at the link location there is no mention of international transactions.)

I guess one of the 'luxuries' of my %3 flat-out Citi rate is I no longer have the option scheming to get an optimal transaction fee (and being a cheap bastard, I know I'd be scheming), and I know (at least at this point) that it will not be more. I have to admit they've improved their exchange rate since this new fee system was put into place, so it may turn out that I'm not getting clipped of much more than I was before.

note: this is not a recommendation

[jfchandler]

Btw jf, does Salem accept a foreign mailing address?

Just checked their site, very competitive rate, certainly better than my brokerage accounts.

Oops, the 3.5% is for 100K to 1000K. Why on earth would anyone put such large amounts unless they were taking advantage of FDIC insurance.

Another oops. They only reimburse upto $15/month while my cards are unlimited.

Vagabond, I don't know if I can answer all of your questions, but I will try....

Re Salem5, I'm pretty sure you need some kind of U.S. address to at least open an account.

Re their interest rates, they always have had 4-5 tiers depending on the amount you have on deposit. But they have OK rates even for the lowest tiers, especially compared to other banks. Their rates, along with most everyone else's, have gone down as the Fed has lowered rates. Right now, I'd say their overall rates are about average, but much better than most large U.S. commercial banks.

I don't use my account with them as a place for large-scale investing to earn interest. I use my account with them as a place to deposit and then access my day-to-day cash needs via their ATM/debit card.

Re ATMs, foreign exchange and reimbursement, I believe their $15 per month reimbursement relates to third-party ATM-usage fees whether charged in the U.S. or abroad. I've never done an SCB withdrawal since them since SCB began their 20 baht charges, so I can't say how that gets handled or tallied. SalemFive doesn't add on any of their own extra foreign currency fees, but at the same time, I don't believe they reimburse the 1% fees Visa and MC take via lower exchange rates.

But in general, when I use my SalemFive MC debit card here in LOS to make a withdrawal from a Thai bank, I get just one withdrawal entry listed in my SalemFive account. And the exchange rate applied seems to track pretty closely to the rates listed in the local exchange booths here.

As an example, on Sept. 15 U.S. time, my real exchange rate for an ATM withdrawal out of my SalemFive account was 34.42. The official rate that day was 34.7 something. So I believe MC is getting their 1% cut somewhere (amounting to one-third of a baht) but it's not being reported separately -- the same as Visa I believe. MC is simply applying a lower exchange rate that reflects their 1% cut.

That's a very different situation, for example, from Bank of America -- where, if you use a BofA debit card here, you get three different debits to your account: 1) the basic amount you withdraw, 2) a separately charged 3% foreign currency fee, and 3) a couple bucks additional BofA charges for using a non-BofA ATM machine. In the end, of course, people who use BofA and similar outfits are getting reamed.

I don't know of any way to make ATM withdrawals here where you're not somehow getting hit with the 1% fee from Visa or MC via the slightly lower exchange rate.... If there's a way to avoid that, please do tell...

Edited September 16, 2008 by jfchandler

[jfchandler]

I guess one of the 'luxuries' of my %3 flat-out Citi rate is I no longer have the option scheming to get an optimal transaction fee (and being a cheap bastard, I know I'd be scheming), and I know (at least at this point) that it will not be more. I have to admit they've improved their exchange rate since this new fee system was put into place, so it may turn out that I'm not getting clipped of much more than I was before.

note: this is not a recommendation

I'd argue, if Citi is hitting you for 3% every time you withdraw ATM funds in Thailand, you ARE getting clipped.

I'd be very doubtful they are giving you any kind of better real exchange rate to offset the 3% fee. Banks just don't do that. They're probably giving you a normal exchange rate and then taking their 3% off the time...leaving you with less.

Check you account and statements... take the total amount of your withdrawal and any related fees in U.S. dollars, then divide that into the amount of baht you received, and you'll get your real net exchange rate. Then you can see how it compares to what's out there in the marketplace for that day.

[hyperdimension]

I don't know of any way to make ATM withdrawals here where you're not somehow getting hit with the 1% fee from Visa or MC via the slightly lower exchange rate.... If there's a way to avoid that, please do tell...

I withdraw from an NAB home mortgage account, and I found that the net rates I got were the same (or even better) than the TT rates. I pay no fees at all!

But looking at it a different way, what I save is probably lost by the interest I pay to the bank for the loan!

It's hard to win out in the end, but you can try to minimize what you pay to the banks.

[bendejo]

I'd argue, if Citi is hitting you for 3% every time you withdraw ATM funds in Thailand, you ARE getting clipped.

No doubt, but my point was that before they started this flat 3% and I was officially paying 0% I was pretty sure they were skimming something on the rate, and now they give a rate that is pretty concurrent with the one I get when I look it up on Oanda. Of course, I never got anyone to admit they were skimming, simply "well, that was the rate at the time of transaction." Yeah, right.

My conclusion is that there probably isn't much difference between what I'm getting clipped out of now, as opposed to when the phantom rate was applied. My guess is now I pay about 1% more. So overall, the amount I'm out hasn't gone from 0% to 3%, but more like from 2% to 3%. Don't suspect for a moment that I find this acceptable.

Edited September 16, 2008 by bendejo

[jfchandler]

At the suggestion of Vagabond, I recently had the opportunity to test how SalemFive Bank in the U.S. handled the 20 baht ATM use fee now charged by Siam Commercial Bank, in terms of fee reimbursement.

With SalemFive's free E-One Checking account, you are eligible to be reimbursed up to $15 per month in other banks' ATM fees. Normally in the U.S. this happens automatically. But I'd never tested that in Thailand, because I never use Thai ATMs that charge separate fees. But now that SCB has started charging ATM fees, I decided to give it a test.

The bottom line result: while the 20 baht ATM fee charged by SCB showed up on my paper ATM receipt, the ATM fee did not list separately when the withdrawal surfaced in my SalemFive acount. The 20 baht fee was just included as part of the overall single dollar amount withdrawal.

So, I ended up emailing SalemFive and just got the following answer: If the foreign bank ATM fee is listed/sent along separately, then their fee reimbursement should happen automatically. However, in a case like SCB where the fee amount is not listed/sent along separately, the customer needs to make a request in writing to SalemFive along with a copy of the ATM receipt.

In this instance, based on my bank email to SalemFive, they went ahead and credited my account for the 20 baht (58 cents). But clearly, it would be a hassle to have to request and send in ATM receipts and reimbursement requests every time you use a SCB ATM.

So, the bottom line is: SalemFive does live up to their fee reimbursement policy. But, since the SCB fee is not transmitted separately, it would be troublesome to pursue it that way every time. So, as I've already stated above.... this is another good reason NOT to use SCB ATMs when they are so many other no fee choices available here.

-------------Original Message---------------

From:BANK

Subject:RE: Re: Transaction History

Date:09/XX/2008

Message:

Thank you for contacting Salem Five. The fee assessed by the outside ATM

was not presented separately for deduction at Salem Five. I will credit

your account .58 for the transaction of $XXX.XX on X/XX/2008. In the

future please submit the request in writing with copies of the transaction

receipt for reimbursement. Submit to :

Salem Five

210 Essex St

Salem MA 01970

If you have any additional questions in regards to your account, please

feel free to contact our customer service team on (978) 745-5555 or (800)

322-2265. We are available for assistance Monday through Thursday 8:15am to

7:00pm, Friday 8:15am to 6:00pm, Saturday 9:00am to 3:00pm and Sunday

11:00am to 3:00pm.

Sincerely,

Debra V Walters

Banking with you in mind

---------------Original Message---------------

Subject: RE: Re: Transaction History

Created on: 09/XX/08

To: BANK

Thank you David... But...I think my real question was..... Does your

system see and recognize that an ATM fee has been charged by another

bank....even when it does not show up as a separate item in my SalemFive

account transaction history I know I got charged because I see the

charge on my ATM slip from the other bank. But I don't know if SalemFive

knows I got charged.... Please answer that. Thank you.

[vagabond48]

At the suggestion of Vagabond, I recently had the opportunity to test how SalemFive Bank in the U.S. handled the 20 baht ATM use fee now charged by Siam Commercial Bank, in terms of fee reimbursement.

So, the bottom line is: SalemFive does live up to their fee reimbursement policy. But, since the SCB fee is not transmitted separately, it would be troublesome to pursue it that way every time. So, as I've already stated above.... this is another good reason NOT to use SCB ATMs when they are so many other no fee choices available here.

I just got back from my Laos border run trip.

Luckily, both Fidelity (with some trouble) and Schwab have taken my word regarding reimbursing ATM fees I got charged. I agree that we need to stay away from SCB and hope the other banks don't follow SCB's new fee policy. If you travel to other countries, you may be charged fees. I was, in Cambodia and Vietnam. If the other Thai banks started charging a fee, I would make a reimbursement request once a month. It would be a pain and an additional cost for me to have to copy the receipts, and mail a reimbursement request.

Thanks for the heads up.

[swain]

I don't use my master card debt card as a ATM card anymore because the exchange rate is so bad when doing this. But strangely enough using it like a credit card I am getting very good exchange rates. As long as you don't let them charge you in US dollars when processing the card. When they do this the rate is amazingly bad, rip off rates. But when billed in baht the exchange rate was better than if I went into the bank and changed hard currency.

I have a Visa and a Master card but the good rate I found only on the master card but to be clear they are from different banks.