Got kids spending time in the US this Summer? You may need to send them money at some point. Here are some tips for doing that the right way.
If your son or daughter will be traveling overseas to the USA this summer, you might want to consider ways to send emergency cash should they get into a tricky situation. Finding out the safest way to send money cheap can seem confusing and overwhelming.
With these simple guidelines, however, you'll know exactly what to do if you get that call... when your teenager has run out of money and needs your help fast.
Work With a Company You Trust
To transfer money abroad, go with a company that's reputable, proven, experienced, and transparent in their ways. That means looking for the following:
- trust symbols like an association with a larger banking institution
- favorable reviews from third-party organizations
- good writeups in major newspapers and magazine publications
- a good rating with a customer review organization like Trust Pilot
In addition, look for an anti-money laundering policy on the company website, which helps assure consumers they're dealing with an above-board company that's registered and authorised by the Financial Conduct Authority (FCA) to offer money transfer services.
Stick With the Large Companies
What happens to your money mid-transfer when a company goes bust? Sticking with the larger companies may help protect you in situations like that.
Look for FCA Protection
Larger companies provide more protection. That's because larger money transfer companies who trade over £2.4 million per month are required by law to conform to FCA regulations.
These regulations stipulate that the cash you submit for sending money overseas must be separated from the firm's accounts each night. It gets put into a separate customer holding account so if the firm goes bust you get your money back.
Smaller companies are not required to separate funds, so customer cash goes into the company bank account. If they go belly up, that money is taken to pay creditors, with clients last in line to get their money back.
Look for an authorised
institution, and you'll know they are safer. A registered
company may not offer such safeguards, since they are not bound by law to do so. You can search companies on the FCA website
, which maintains a register of all authorised companies.
When you're arranging to transfer money abroad, be careful in how you set things up. International transfers are particularly sensitive to glitches caused by seemingly unimportant detail errors. Matching names is crucial, for example.
Don't misspell anything, and be consistent with using middles names or not. Some countries, including the United States, are very picky about these details and won't release the funds if something is amiss, even though it seems unimportant.
Compare Options: Send Money Cheap But Be Safe
Some consumers prefer to use banks to transfer money abroad. HSBC offers this service, but it costs more than your typical money transfer service. Although they tend to be the cheapest of the banks, always ask about the fees and the exchange rate before committing to bank services.
There's no need to resort to expensive banks, however, since you can still send money cheap when applying cautionary rules. All you need to do is learn which costs vary from company to company. These costs are:
- exchange rate
Fees are simple: just ask. Exchange rates vary from day to day but in general money transfer companies charge a fixed premium over the current published exchange rate. These will vary to be sure to ask.
Keep in mind that some companies can be tricky with how they word things. They may advertise that their transfers are "commission-free" but then they recoup that lost profit by giving you a bad exchange rate.
It can help to become familiar with exchange rates for the US Dollar so you know a good deal when you see one. Some companies will allow you to lock in a good exchange rate ahead of time.
Consider Pre-Paid Travel Cards to Begin the Journey
To get your son or daughter started on their stateside journey, some parents will gift a pre-paid travel card.
There are fees associated with pre-paid travel cards too, so be sure to ask. They often use the exchange rate set by the issuing credit card company (for example, Mastercard).
The process to transfer money abroad can seem complex, but following this advice should prepare you for getting a good deal and better service when your stateside teenager needs money and gives you that call.