Should I buy the dip?
September 28, 2022 4:36 AM Subscribe
I (an American) need to buy Eurostar tickets for a trip a few months away. Is there any reason I shouldn't take advantage of the weak pound and buy the tickets in GBP instead of USD? My credit card has no foreign transaction fees, so it seems like this will save us ~20% compared to the dollar. Are there any pitfalls I'm not considering?
Response by poster: Make sure you check what exchange rate your credit card card uses for foreign transactions in GBP. It’s probably a bit worse than the “true” exchange rate.
Sorry, I should have mentioned that it does seem to be pretty close to the true rate (within a couple of cents) based on recent purchases. So even if we get $1.10 to the pound instead of $1.06 or whatever, it's still close to 20% savings compared to paying in dollars.
It seems like a no-brainer to me (assuming Eurostar will let me pay in GBP with my US credit card), but maybe there are gotchas I'm not considering.
posted by uncleozzy at 5:21 AM on September 28, 2022
Sorry, I should have mentioned that it does seem to be pretty close to the true rate (within a couple of cents) based on recent purchases. So even if we get $1.10 to the pound instead of $1.06 or whatever, it's still close to 20% savings compared to paying in dollars.
It seems like a no-brainer to me (assuming Eurostar will let me pay in GBP with my US credit card), but maybe there are gotchas I'm not considering.
posted by uncleozzy at 5:21 AM on September 28, 2022
I just did a quick comparison on a sample fare and, wow, they're really charging you 26% to pay in USD? If you can pay in pounds go for it, because no credit card will spread you that much in foreign exchange fees.
Is it possible that the difference in prices is because Eurostar offers a discounted rate to UK residents? The website may block you on the cheaper rate because of that but there's no harm in trying.
posted by JoeZydeco at 5:23 AM on September 28, 2022
Is it possible that the difference in prices is because Eurostar offers a discounted rate to UK residents? The website may block you on the cheaper rate because of that but there's no harm in trying.
posted by JoeZydeco at 5:23 AM on September 28, 2022
Best answer: I’ve done exactly this (bought Eurostar tickets in non-USD with a USD-denominated credit card, in order to save money) — as long as you are sure about what your credit card company is charging for foreign currency purchases, you can do absolutely what you plan to do.
Is it possible that the difference in prices is because Eurostar offers a discounted rate to UK residents? The website may block you on the cheaper rate because of that but there's no harm in trying.
I doubt this is the case — Eurostar prices its tickets in US$, £ and € but as long as I have been buying tickets, the fares in the three currencies have never been “live” conversions of one another. That is, they are in the right proportion and there are the same general price brackets/categories, but if the foreign exchange rate moves, the prices don’t automatically move along with it.
In other words, Eurostar will set a €75 ticket at £68 and US$85 (for example), but if any of the exchange rates move they don’t automatically adjust on a day-to-day basis.
This works fine (for Eurostar) when the foreign exchange rate is generally stable, and has the benefit of providing price stability for the customer, but when it changes rapidly (as has been the case recently for nearly all major world currencies, including pound sterling and the euro, versus the US dollar), opportunities like this (for the customer) arise. I don’t know how often Eurostar adjusts the price brackets, but it’s definitely not live and based on your question it’s not that often either.
TLDR: know what fees your card charges, and if it still makes sense, then do it
posted by andrewesque at 5:38 AM on September 28, 2022 [3 favorites]
Is it possible that the difference in prices is because Eurostar offers a discounted rate to UK residents? The website may block you on the cheaper rate because of that but there's no harm in trying.
I doubt this is the case — Eurostar prices its tickets in US$, £ and € but as long as I have been buying tickets, the fares in the three currencies have never been “live” conversions of one another. That is, they are in the right proportion and there are the same general price brackets/categories, but if the foreign exchange rate moves, the prices don’t automatically move along with it.
In other words, Eurostar will set a €75 ticket at £68 and US$85 (for example), but if any of the exchange rates move they don’t automatically adjust on a day-to-day basis.
This works fine (for Eurostar) when the foreign exchange rate is generally stable, and has the benefit of providing price stability for the customer, but when it changes rapidly (as has been the case recently for nearly all major world currencies, including pound sterling and the euro, versus the US dollar), opportunities like this (for the customer) arise. I don’t know how often Eurostar adjusts the price brackets, but it’s definitely not live and based on your question it’s not that often either.
TLDR: know what fees your card charges, and if it still makes sense, then do it
posted by andrewesque at 5:38 AM on September 28, 2022 [3 favorites]
My experience is that it's always better to pay in any store's local currency: the exchange rate and foreign transaction fee from my credit card are pretty much guaranteed to be better than the exchange rate offered by the store for the "convenience" of paying in my own currency. I'd go for it if I were you.
I'm not aware of any Eurostar discount for UK residents, and if they had one, I should think they'd want to tell us about it.
posted by ManyLeggedCreature at 5:44 AM on September 28, 2022 [2 favorites]
I'm not aware of any Eurostar discount for UK residents, and if they had one, I should think they'd want to tell us about it.
posted by ManyLeggedCreature at 5:44 AM on September 28, 2022 [2 favorites]
Response by poster: TLDR: know what fees your card charges, and if it still makes sense, then do it
Yep, I went ahead and bought the tickets in GBP and the transaction amount on my credit card indicates about $1.08 to the pound sterling, which is just the regular Visa markup.
(Now what else can I pre-pay in pounds?)
posted by uncleozzy at 6:25 AM on September 28, 2022
Yep, I went ahead and bought the tickets in GBP and the transaction amount on my credit card indicates about $1.08 to the pound sterling, which is just the regular Visa markup.
(Now what else can I pre-pay in pounds?)
posted by uncleozzy at 6:25 AM on September 28, 2022
Now what else can I pre-pay in pounds?
You might be able to buy some actual pounds from your bank. For example, Wells Fargo lets you order them (they'll mail it to you) and today's rate is $1.1220. I have walked into one of their larger banks and purchased both Pounds and Euros.
posted by soelo at 6:32 AM on September 28, 2022 [3 favorites]
You might be able to buy some actual pounds from your bank. For example, Wells Fargo lets you order them (they'll mail it to you) and today's rate is $1.1220. I have walked into one of their larger banks and purchased both Pounds and Euros.
posted by soelo at 6:32 AM on September 28, 2022 [3 favorites]
If you are certain enough about your itinerary, you can make non cancellable hotel reservations that typically require payment up front.
If you are certain enough about your plans and activities you can buy tickets for any events/sights/UK domestic travel.
Clearly, this varies a lot by country but I would not plan to bring a lot of cash for the UK part of this trip. I was in the UK twice this year and the vast majority of things that people used to pay for in cash people now use contactless payment for in the UK. It was so pervasive on my last trip that I ended up handing my left over cash from the last few trips to my aunt. She lives in the UK, she is retired and she doesn't mind holding up queues by using cash. Whereas I feel life is too short and tap my card.
YMAPMV (your mileage and preferences may vary)
posted by koahiatamadl at 7:23 AM on September 28, 2022 [1 favorite]
If you are certain enough about your plans and activities you can buy tickets for any events/sights/UK domestic travel.
Clearly, this varies a lot by country but I would not plan to bring a lot of cash for the UK part of this trip. I was in the UK twice this year and the vast majority of things that people used to pay for in cash people now use contactless payment for in the UK. It was so pervasive on my last trip that I ended up handing my left over cash from the last few trips to my aunt. She lives in the UK, she is retired and she doesn't mind holding up queues by using cash. Whereas I feel life is too short and tap my card.
YMAPMV (your mileage and preferences may vary)
posted by koahiatamadl at 7:23 AM on September 28, 2022 [1 favorite]
I'd set up an account with Wise (formerly TransferWise) and get their cash card. This lets you fund an account in USD and move money back and forth to GBP at their rates, which are pretty good and much better than the teller window at a bank (They're currently 1.07 USD to the GBP)
If you decided to jaunt over to Paris for the weekend you could easily shift money into Euro and back to USD when you're done.
posted by JoeZydeco at 7:36 AM on September 28, 2022 [3 favorites]
If you decided to jaunt over to Paris for the weekend you could easily shift money into Euro and back to USD when you're done.
posted by JoeZydeco at 7:36 AM on September 28, 2022 [3 favorites]
I would add that there isn't a lot of confidence in the government at the moment, so you might well save even more by delaying a bit longer.
posted by Just this guy, y'know at 8:06 AM on September 28, 2022 [4 favorites]
posted by Just this guy, y'know at 8:06 AM on September 28, 2022 [4 favorites]
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posted by mekily at 5:06 AM on September 28, 2022