Foreign Exchange: Why is it so important?

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One thing that can really complicate the life of Superyacht Crew is Foreign Exchange or FX.

If you are not using an FX company the chances are you are losing a decent amount of money every month for no reason.

Let’s look at an example:

Sarah has just started her first job on a Superyacht. She is from the UK and has a bank account back home with HSBC in £.

  • The yacht she is working on pays her €2400 per month which is paid straight into her HSBC £ account.
  • Sarah is in the Caribbean and is spending money in $USD using her UK credit card
  • When Sarah needs cash she uses her HSBC £ debit card

Without realising it, Sarah wastes a lot of money doing this.

  • Getting paid €uros into a £GBP account means that her salary becomes £2112.00
  • Spending money on a card in the wrong currency costs a lot. Most banks charge a fee plus their exchange rate isn’t great.
  • Using your UK debit card in a foreign ATM will also cost you. The exchange rate, a card fee and possibly 3% surcharge

Whilst all this doesn’t sound like huge amounts of money beware, it soon adds up. If you get paid into a £ account, use a £ debit card and use ATM’s whilst away you could lose up to 10% of your salary per month, maybe more.

Even as a junior crew member you could be losing 10% of your salary per year, this soon adds up. If you do this throughout your career this is a LOT of money, you can do the maths!

What’s the solution?

It’s simple really but all about getting set up properly.

  1. Bank account: Make sure you have a bank account the same currency as your salary. This saves you fees and poor exchange rates every month.
    1. There are lots of banks out there that offer Multi Currency accounts. Remember, if this is a high street bank such as HSBC you need to have an account with them already to do this.
    2. Lots of Superyacht crew use accounts with online companies such as Revolut, Transferwise and others to get paid into. Be aware, a lot of these are not banks (some are) and so you don’t have the protection of the FSCS. Also if you get paid through an FX company it can be very hard to prove your salary is actually yours when it comes to doing your tax return.
  2. Card: Make sure you have a multi currency debit or prepaid card to avoid card charges and poor exchange rates when spending. This is where Revolut, Transferwise and especially Centtrip are really useful.
  3. Sending money home: Once you have been paid into the right account it is a good idea to send any money you don’t spend back to your £ account. This is where a Foreign Exchange service is useful as it saves money compared with the bank.

So, What do I do then?

There are a few things to think about here but also A LOT of money to be saved. These small amounts each month soon add up to a LOT. By the end of a 10 year career on Superyachts you could be looking at the value of a house (if invested wisely) or at least the deposit for one! Worth looking into isn’t it?

Here at CREWFO we can help you with all of this. Not only will be give you advice but, unlike a lot of others we will give you options.

There are a number of companies/ advisors/ Facebook Groups that will try to sell you a solution which may not be right for you. Ever wondered why certain forums tell you to set up a Standard Bank offshore account?  That’s right, because they get paid for referring you! There is nothing at all wrong with Standard Bank as a bank. But, it is not the correct solution for many people. This is why we listen to what you have to say and give you a few options which work. As an example, there is no real reason why UK crew members need to bank offshore. This is explained in more detail here.

Get in touch if you need a hand with Foreign Exchange, Banking, cards or anything else to do with Money. We are here to help and offer independent advice to Superyacht Crew Worldwide.

Published on 20th November 2020 in by