Hi OzBargainer's,
In between this and my last post, I have moved to the UK (arrived Thursday) and am working here for 2 years. At this stage I am trying to avoid using my Credit Cards here and had brought some cash with me to get by. I am in the process of looking at lodging with people that I work with, who have said that it is OK for me to transfer funds from my Bank Account as a Direct Deposit to pay for my accomodation (and food). I want to minimise the fees / charges that I would incur in doing this. I currently have 2 bank accounts, one with ME Bank and the other with Bendigo Bank. They are very basic accounts, so the % fees are normal. I am in the process of organising a HSBC or a Lloyds Bank account, but this may take a while. Can any one suggest the best approach to do this?
Hopefully an Aussie in the UK is still recognised as an OzBargainer!
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I would suggest opening a Citibank Plus or ING account. Citibank gets good exchange rate, no international purchase fee to card payments and free international ATM withdrawals in some ATMs. ING is good for no international purchase fee and free international ATM withdrawal (as long as you made 5 contactless transactions per month and deposit $1000 per month), so you can withdraw money from an ATM in UK and pay people cash.
I'll say direct deposit from an international bank (e.g. AUS bank) to UK bank can be the worst idea. You may get charged an international transfer fee, depending on what bank you're with (say ME bank may charge one fee, then the transiting bank charges another fee, and then your local UK bank may charge another fee). The bank fee can be about ~AUD$60 in total per transfer, that may be charged by different banks. This can be the more expensive option than credit card purchases. However, at this moment, it really depends on the amount you're gonna spend when you compare between international bank transfer and credit card purchases. Say if the amount is like $10,000, then a fixed fee for international bank transfer may be cheaper. If the amount is small, a few % of international purchase fee may be much lower than the fixed fee for international bank transfer.
In the mean time, I also suggest withdrawing some cash using an Australian debit card (if you have any) from ATMs in UK. You may get charged a fixed fee for international ATM withdrawal fee (~ less than AUD$5). Then the rest goes to the currency exchange rate. If your card provides good exchange rate (e.g. if they apply the currency exchange rate adopted by MasterCard or Visa, rather than the bank's own rate), it should be the best option.