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PayPal make a killing on foreign currency conversion rate
jt88
Posts: 2,832 ✭✭✭✭✭
I purchased a coin from Great Britain on eBay which is about 950 GBP, so when I tried to pay. PayPal showed total USD is about $1383 if I let PayPal do the conversion, then I did a little research on the subject. It showed it is much better to pay with foreign currency and let your card to convert to USD. So I paid GBP with my card. It saved me $52. Just wanted to share this with the board.
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One thing I forgot to mention is that you need to make sure your card will not charge foreign transaction fee otherwise it might end up more expensive for you.
This is only one of the reasons I have ceased using PP unless absolutely necessary.
I now use "Transferwise", soon changing name to simply "Wise". I am able to have an IBAN account as well as simply transfer funds directly from my bank debit card to all available IBAN or SWIFTaccounts. For instance, last week I sent $1320 dollars to India with immediate transfer and tracking and it cost me $8.00. Exchange rates are honest conversion rates for the day and fees are minimal. The sender (me) pays the minimal transfer fees which makes the receiver happy. It boils down to having an international on-line banking account. Based in London, it's a solid, easy alternative to the usury practices of PayPal.
One other thing, you can have multiple currency accounts whereby your money can be collected from world buyers and you can buy from world sellers without needing to access your US account if you don't want to. Over $10k transferred in 2019 without a hitch.
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Learned it the hard way last year. I purchased some chips and snacks exclusive from Taiwan and Japan for my two daughters. Two packages costed more than $1383 if I included the $300-400 shipping fee. lol
you do not have to use PP!! there are choices!
This is the way. Paypal is an awful option for international purchases. It gives a poorer exchange rate plus tacks on a 5% fee.
IG: DeCourcyCoinsEbay: neilrobertson
"Numismatic categorizations, if left unconstrained, will increase spontaneously over time." -me
This is the same scam that the banks are using when you use a foreign ATM. They ask something like if you want the transaction in dollars, always decline and go direct with the other currency.
Transferwise is good but it did not go to every country, such as China. I did use it for Hong Kong. The rate is good. I sold a 43K coin to China. Paypal can only allow 10K payment and charge for 5% so the fee is very high, plus the exchange rate is so high that the buyer did not want to pay . I asked the buyer to use transferwise but he said he can't find it there.
my credit cards charge an extra ($20?) for foreign conversion, so PAYPAL balance is worse on a $100 item?
It seems very difficult to get money out of China in general.
IG: DeCourcyCoinsEbay: neilrobertson
"Numismatic categorizations, if left unconstrained, will increase spontaneously over time." -me
thanks for this thread - had recently been trying to find a wire service outside of my bank, as I recently paid a $45 wire fee to france - thank goodness I won't have to do that again 😅
Several months ago I bought something from Mint of Paris. The US credit card won't work with their 3rd party charging system, since they need some other verification method, they need some passcode kind of thing which we do not have.
So I used Paypal, and without a problem.
Even in US, some dealers do not accept credit cards, besides check, PP is the only choice.
Not a big fan of hidden fees but Paypal is a necessary evil sometimes.
Not defending it, but it is still better than credit cards at most times when purchase amounts are smaller.
All my credit cards have always charged a foreign currency transaction fee right from 2001 onwards. Then there was a class action lawsuit some time in 2006-07 or something and I got back 25$. Thereafter it has been a given (it is in the fine print of contract terms) and they even started to lock the cards in the name of security if I do not call them in advance and give them my travel details while visiting outide of the US.
Just my opinion.
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vulcanize
do you honestly think that giving a CC company your travel details will give you a better rate? or better security?
If their system flags you while you do a out of your regular spending habit transaction, they might ask you to verify that it is legit and that it is U. But u certainly do not get a better rate.
it is firstly for their own protection.
I don't know how it is now as I haven't been out of the country in more than a decade. When I was travelling overseas it was SOP to contact your credit card companies to let them know you might be using your card out of the country. If you did not give them a heads up they are likely to deny an purchases you attempt to make. The old adage it's better safe than sorry comes to mind.
All this depends on the type of card you have and your usage and payment history.
My worst case is actually interesting and happened years ago when not everyone had a gold or platinum AX CC.
I used to do an average 5-8 overseas flights around 4 continents a month.
Once my TA used my CC for a $ 2800 ticket the day I had to leave. I arrive in HKG, out for a stroll with business friends there, and got to know a HKG based IATA Travel agent...she showed me how to cut 700 $ off a legal ticket by buying from her, based on exchange differences and published ticket prices and still use the airline of my choice, all legit and accepted and exchangeable by ALL airlines..So I did and AX called me to the phone, just to verify its ME. their system flagged the ticket duplication and my "out of the norm" purchase. But there were never better exchange rates offered by the CC company etc... maybe other benefits,,,,