A friend's daughter will be going to England for a semester to study abroad. My friend asked me what would be the best way to deal with the money situation. I suggested an ATM card. The woman arranging the travel accommodations for the college students is suggesting that her daughter purchase traveler's checks here in the US to use to pay for housing.
I know in Italy, traveler's checks are very difficult to cash and it is much better to use an ATM card to get cash. Is it easier in England? I doubt that traveler's checks could be purchased in the US in pounds instead of dollars (I believe pounds is the English currency), so even if they were accepted, won't it cost a lot more with the exchange rate charge?
Also, my friend mentioned that her daughter would set up a bank account while in England. Is that possible? Again, I am only familiar with Italy and believe it is very difficult to set up a bank account in Italy if you do not live there. Does anyone know the rules for setting up a bank account in England?
I am not sure about traveller's cheques - I suspect most UK high street banks will cash them.
Regarding the bank account, it can be difficult to open an account since most banks want to know about credit history; an introductory letter from your friend's bank might be useful.
A handful of bank accounts in the UK can be opened without credit checks, etc; the best-known is the Halifax Bank, who have an account called an easycash account: Halifax Bank Accounts - Easycash - Basic Bank Account
NB. This is a bank link, and you may prefer to Google "Halifax Bank UK" yourself, rather than trusting me! While they don't feature the easycash account, you will find these details if you enter "eashcash" into their search box.
While an easycash account does not pay interest (not much anyway in the UK - 0.5% or less!), it does provide a Visa Electron card which can be used to pay for online purchases, and is used by many UK residents to avoid airline charges.
Regrettably, Ryanair will no longer allow free purchases through Electron from 1 Jan 2010.
We have an easycash account and find it extremely useful (for flights etc); they offer a complete and safe online service to accompany it.
Some of the UK channel island banks will let you open an account that will provide an UK pound account with credit and or debit/ATM card. You should be able to do this from the US.
For example HSBC offers this. I'm sure the other UK banks also do.
OTOH watch the fees. For a semester (3 months?) I'd just use the ATM card the student already has.
If you are using a foreign credit or debit card in an ATM machine you will be charged a large whack by your bank at home every time you use it, won't you?
Students tend to want to take out small amounts at a time so they will be heavily charged for the privilege.
I agree with pjdscott and I would try to open an Easycash account (specifically aimed at those who do not want to get into debt....because you can't with this account I think), or similar, if I were in this position. Shame about the Ryanair thing stopping. That is the only reason I opened an account with them!
Thanks so much for the information everyone. I will pass it on to my friend.
Felicity, when I use my ATM card (or if I used my debit card) in an ATM machine in Italy, I am only charged a 1 euro fee by the Italian bank as a service fee. My credit union so far has reimbursed this fee for me. I am not sure if my friend's daughter has an account at the credit union but I know her mom does.
The Charles Scwab checking account does not charge any kind of fee for foreign ATM transactions (or if you are charged one, they will reimburse). Also, they don't have a surcharge for foreign currency conversion. We've been able to use it at ATM machines all over Europe.
We've found this account very easy and economical. If she can pay for all her expenses in cash, this would work. The parents would just need to keep the account funded.
You are fortunate with your American bank accounts! Nearly all (?) the English banks charge a large fee every time we use our cards abroad - a 'foreign currency transaction fee' for purchases and an even larger fee for using an ATM machine for a cash advance, in the case of our bank, Lloyds, both credit and debit cards. That, on top of the tourist conversion rate (as opposed to the interbank rate which is kinder).
My son is studying at Churchill College right now. We did a good bit of research on the matter and, to make a long story short, we decided to use the credit card and ATM method. You pay a bit in fees (about 3%) but every method costs a bit. My son makes small purchases with a credit card, takes out 100 pounds or so from time to time with the ATM. I like it because I can add $ to his account very easily from here in the USA. He may be in England for a couple more years and we will probably keep using this system.
