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Cashing GBP Bank Draft

Travel Forums Europe Cashing GBP Bank Draft

1. Posted by Midworlder (Respected Member, 17 posts) 26 Feb '08 23:33

Midworlder has indicated that this thread is about England

As part of my world trip it will be three months before I reach England .. I will be driving around for a month and stopping at random B&B's etc for accomodation. Rather than carrying cash for 3 months before I arrive or relying on credit card withdrawals (transaction fees and exchange rate loss) or taking travellers cheques, one thought was getting a Bank Draft in GBP, and cashing it when I start to need some cash, may take two separate ones .. any thoughts ?

Also any advantage paying in cash to credit card at UK B&B's ??

2. Posted by Hien (Moderator, 3906 posts) 27 Feb '08 09:23

I have not heard of travellers taking bank draft, unless he's going to stay there on a long term basis and needs to open a bank account. Cashing a bank draft issued overseas might take some time to clear, as they would have to send it back for clearance. And I'm not sure if they would allow you to cash a cheque without having a bank account with them. Plus, the bank where you try to cash the bank draft might charge you a clearance fee. Different bank have different rules and policies, so you'd better check first.

Why not traveller's cheques? It works the same as what you want from the bank draft, and it's so much easier. You can cash the cheques from banks, bureau de change and post offices as well. Get GBP traveller's cheques instead of USD ones so that you don't lose on two-time exchange conversions (NZD to USD to GBP).

Instead of using credit card withdrawals, use your ATM card. Check with your bank how much they charge for overseas withdrawals. It may be more convenient using your ATM card.

This two articles may be helpful for you:

As for B&Bs, I'm not sure. But so far, the hostels I stayed in charged the same for credit card and cash.

[ Edit: Edited on Feb 27, 2008, at 9:25 AM by Hien ]

3. Posted by Wardsan (Travel Guru, 14 posts) 27 Feb '08 10:51

A travellers' cheque works rather similarly to a bank draft. We use bank drafts only for very high-value payments such as paying for a house. A bank draft can be useful for the person being paid, since it is a cheque written by a bank, and so carries less credit risk than a cheque written by me (unless it's written by Northern Rock...). But a travellers' cheque is also a promise to pay made by American Express, or whoever the issuing company is, not by the person signing the cheque. So I really cannot think of any advantage of a bank draft over a travellers' cheque, and plenty of disadvantage.

It is fairly unusual to be charged a premium for using a credit card. Indeed, some places might actually prefer payment by plastic, since otherwise they have to carry the cash to the bank. One exception is often for American Express, which seems to charge retailers higher premiums than others. Rather than charging a premium, many retailers simply don't accept Amex.

4. Posted by Midworlder (Respected Member, 17 posts) 27 Feb '08 20:12

Thanks for your comments .. The attraction of a bank draft is that obtained here in NZ it can be funded from my GBP a/c which holds sterling I have bought at an attractive rate. The Bank Draft would be drawn on my Bank's UK correspondent bank (Barclays I believe) payable to me I understand I only need to go to A UK branch they send a copy to their clearance centre (by fax) it is checked to confirm it is signed by authorised signatories and doesn't have a stop on it and funds would then be available to be paid out at the branch ... sure this could take 24 hrs ... Being an instrument drawn on their bank they are obliged to give value for it.
Like travellers cheques I can stop it if lost but I don't need to carry a wad of them (especially as it will be 3 months on the road before I reach UK) I think

The advantage over credit card or debit card to obtain cash is that most banks worldwide charge up to 3 % transaction cost (1/2 of this used to be hidden in NZ but Commerce Commision fined all NZ banks Millions of Dollars recently and forced them to refund what hadn't been disclosed properly to travellers back 5 years) also I am not subject to the wims of exchange fluctuation when it is converted back to NZDin July as I already have it in GBP

Still considering my options on this one