Exchange Rates: The Stealth Rake

[Tachyon]

[ QUOTE ]

What is the law on how much poker sites are allowed to alter the exchange rates to screw us out of our money? Have you got any tips on how to minimise these extra fees? Thanks.

[/ QUOTE ]

Theoretically they could charge you what they like, however they don't charge you anything it is your credit card company that applies the fee.

Example you deposit $100 on Pokersite; the Pokersite receives $100 less the fee they pay to the credit card processor. The creditcard processor charges your bank $100; your bank then converts the $100 to GBP plus the commission percentage added on that will be stated somewhere in your Terms and Conditions.

The exact same applies the other way round. For instance most UK banks charge between 2-2.5%, however as you may recall from Nationwide advertising they don't presently charge a "tip" for foreign exchange!

If you want to bonus whore then my advice to you would be to open a NETeller account, but make sure that you open it in USD [1] so that when you cashout of site A you can then redeposit into site B.

Good luck!

John

[1] If you set your NETeller in GBP then you get charged 1.9% by NETeller every time you deposit or withdraw funds to NETeller. If you set up in USD then you only get charged the 1.9% when you fund NETeller by internet banking. Trust me when I say you are better off only paying the fee once if you plan on being a BW

[ADBjester]

[ QUOTE ]
How many of you non-US guys has this happened to: you make a deposit from your bank and the exchange rate used to change from your local currency (mine is pounds sterling) to US$ is lower than the actual.

[/ QUOTE ]

Define "actual". The rate you see on cnnfn.com or in the Wall Street Journal or the London Financial Times is an institutional rate, for trades of millions of dollars. You cannot expect to get that rate on an exchange of mere hundreds or even thousands. (How do you think Thomas Cook makes its money, anyway?)

Also, the single number you see is also the midpoint between the buy and sell rates, which are usually a couple points distant from each other. Even if you were to go to your BANK and trade dollars for pounds, and then trade those pounds back for dollars, you'd lose several points on the combined trades.

Thus, take the number you see in the media, and lop off about 3-4% against you (no matter whether you're buying or selling) for a fair market rate of exchange.

The also figure that the online sites and eWallets like NETeller aren't currency markets. The number in the paper changes daily. The rate at online sites likely does not.

Jester