Why you might not want to use your credit card abroad

The amounts of money involved when buying a property abroad tend to be a bit on the large side. You might be getting a lot for your money, but when you have to think about paying your deposit, buying furniture, paying for a solicitor and buying the wife that diamond necklace she’s been asking for as a celebration, the amounts of money involved are more than most people choose to carry in cash when travelling abroad.

Using your credit card to pay for these big spends, much as you would do at home, may seem like the perfect solution. You might already have checked with your credit card company and found they don’t charge commission on purchases abroad. But beware! Most credit card companies incorporate hidden charges into their foreign currency transactions.

Don’t believe me? Test it out. Take any credit card statement that includes a purchase made abroad. Note the date of transaction and the exchange rate charged.

Now go to http://www.oanda.com/convert/classic . This useful tool allows you to check exchange rates for 164 different currencies on any given date, and they use the most neutral banking rate available.

For example, leave the “convert amount” field as 1 and choose the date of your purchase in Turkey. Select GBP (the international code for UK Sterling) from the menu on the right-hand side. Now select TRL (Turkish Lira) - the foreign currency in which you paid for your goods - from the menu on the left-hand side, and click on the Convert Now button. This will give you the number of Turkish Lira to the pound on that date. Now compare it against your credit card’s exchange rate. Notice the difference?

In the example below, I’ve chosen today’s date, Saturday, 8th October, and the rate is 2,379,992 lira (2.379992 New Lira or YTL) to the pound. The rate here in Altinkum is 2.35 so not far off.

Now a live test – my credit card’s rate against the local exchange rate here.

Today I bought myself a nice diamond ring for £1,000. Don’t ask me why – I just felt like splashing out. The jewellers used the local rate and put it through on my credit card at 2.35 YTL to the pound, charging me 2350 YTL or 2,350,000 Turkish lira. However, my credit card statement lists the purchase as £1,053.81!

Now if I look again at my credit card statement I can see that the exchange rate used was 2.23 YTL. So the jeweller must have ripped me off, right?

Wrong. The jeweller didn’t rip me off – my credit card company did. Although they say they don’t charge any commission or fees on currency, this isn’t strictly true – they just don’t charge it separately and they don’t disclose it clearly in their paperwork. A dirty trick? Possibly, and one that the Consumers’ Association is fighting against. As Jamie Felix of The Guardian says in the article linked below, Visa and Mastercard had to refund around £400 million in improperly disclosed foreign currency fees to customers in New Zealand after a court ruling that the customers were not made aware of the charges by the credit card companies.

So what can you do? Read the small print for your credit card very carefully, understand what the charges are, and factor it into each purchase – in essence, bite on it.

Alternately, pay cash, use Traveller’s Cheques (although these can be hard to exchange) or change credit cards. Nationwide and Lombard Direct don’t make any charges for foreign currency purchases and some others offer cheap fees or deals that offset the cost.

The charges may be there but as publicity grows, hopefully the card companies will buckle and reduce their fees or at least make them clearer. Until then, it’s cash or charge.
For more information check out this excellent article on the Guardian website:

http://money.guardian.co.uk/creditanddebt/creditcards/story/0,1456,1269346,00.html

Historic Day for Turkey and Historic Day for Europe

After thirty hours of talks and 42 years of waiting, the moment has finally arrived. On 3rd October, Turkey and the European Union agreed a deal to launch membership talks with an aim to bring Turkey into the EU by 2020.

The likely effects of EU membership are various. The benefits for the EU could be more political than economic. Strategically Turkey controls some very important resources, and borders with eight countries, including Iran, Iraq and Syria in the east. Europe would see greater stability in the Mediterranean, Middle East and Black Sea areas, and of course in the relationship between Greece and Turkey – all of which would of course benefit Turkey as well – plus Europe would carry greater political weight as a diverse union with power on the borders of Asia.

For Turkey the benefits are more practical than theoretical. EU accession historically cements hard-won democracy in countries that have only recently made the transition. Additionally there are the economic benefits – stablisation of currency, foreign investment and an increase in foreign trade.

In theory, having agreed to these talks, the EU should allow Turkey to join as long as it meets the criteria that is laid out in the framework agreement. The journey is far from over, however. There are potentially 15 years and enormous political changes required before Turkey becomes a member of the EU.

To see this article in full and for more information about Turkey's accession to the EU, the obstacles in its way and the changes it has made so far, please follow this link: Full Article

Grilled Lamb Kofta Kebabs with Herbs & Chillies

This delicious, typically Turkish, dish serves four people and is perfect served with flat bread (pitta bread for example) and cucumber and tomato salad. If you want to really enjoy your meal, accompany it with raki, a powerful aniseed-flavoured spirit a bit like Pernod - preferably mixed with water if you want to remember finishing your food!

Lamb koftas are easy to prepare and take about 10 minutes, plus 30 minutes standing time.

Ingredients:
8 Tbsp Fine-grained bulgur wheat
1 lb Medium-fat ground lamb
1 lg Onion, minced
1 x Jalapeno seeded and minced
1 sm Sweet red pepper seeded and minced
2 tsp Crushed garlic
1/2 tsp Crushed red pepper flakes
1 1/2 tsp Freshly ground cumin
8 Tbsp Chopped flat-leaf parsley
8 Tbsp Chopped fresh mint leaves
Salt to taste
Black pepper, freshly ground to taste
2 Tbsp Olive oil

Method :
Rinse the bulgur under running water, put in a bowl, sprinkle generously with enough water to moisten, and leave to stand for 30 minutes.

Add all the remaining ingredients, season with salt and pepper, and knead to blend.

Mix to a paste in food processor.

Shape into small egg-sized pieces and flatten to about an inch thick (kofta).

Grill or dry-fry on both sides until golden and crisp and serve with salad and bread.