American Express Membership Rewards - Foreign travel/currency question

Anyone have a sense as to whose exchange rate is lower - Amex or CitiBank (Visa)? I know Amex chgs 2% and Citi 3%, but if there is a difference in the exchange RATE that one charges, need to factor that in.

Traveling to Europe at end of month - trying to determine where to put bulk of charges.

Thanks.

Anyone have a sense as to whose exchange rate is lower - Amex or CitiBank (Visa)? I know Amex chgs 2% and Citi 3%, but if there is a difference in the exchange RATE that one charges, need to factor that in.

Traveling to Europe at end of month - trying to determine where to put bulk of charges.

Thanks.

I don't know what underlying exchange rates each one uses. All I know is my total converted amounts including fees have always been more favorable with Amex than with Citi on any given day.

I don't know what underlying exchange rates each one uses.

They use a rate called the "Interbank Rate" which is the money market rate. There are lots of websites on the net which will tell you what this rate is, ie http://www.oanda.com/

Any card issuer should quote a commission which they add to the interbank rate as their cut.

Nationwide Building Society in the UK do a card which gives the Interbank rate with no commission at all. I am sure there must be cards in the USA which do this.

They use a rate called the "Interbank Rate" which is the money market rate. There are lots of websites on the net which will tell you what this rate is, ie http://www.oanda.com/


Well, Visa/MC used the interbank rate very reliably (though I'm told MC is usually better than Visa). But many people have found that Amex consistently charges more than 2% above interbank. Many, many threads in this forum on that. My personal experience is that with major currencies, Amex is in the 2.25-2.5% range. In Argentina they charged us 6%, we complained, sent a spreadsheet detailing what we should have been charged using rates we got from their website (powered by Oanda), and they refused to refund the difference.

It is somewhat misleading to think in terms of "the" interbank rate as if there were a single rate used for all wholesale transactions. Prices fluctuate as explained here...

http://www.currencysystem.com/kb/3-138.html

...and the card issuers have a range of interbank rates to use as a basis for their charges, and they need not base their consumer rates on actual costs.

dennis

It is somewhat misleading to think in terms of "the" interbank rate as if there were a single rate used for all wholesale transactions. Prices fluctuate as explained here...

Fair enough. I should have said that the base rate that Amex uses tends to be higher than the base rate Visa/MC uses before adding on the conversion fee.

...and the card issuers have a range of interbank rates to use as a basis for their charges, and they need not base their consumer rates on actual costs.

Well, this is a bit debatable. I think part of the reason Visa/MC are switching to the new system (in the past, they would build 1% into the rate, and member banks could add on separate charges if desired; now they bill the bank 1%, exchange at the wholesale rate, and the banks can then add on charges) is because it was deemed misleading (in a multi-million dollar lawsuit) to list as the exchange rate something that was already padded. I'm not sure how this is not OK (when the 1% is disclosed in the T&C), but it's perfectly fine for Travelex in BOS to offer to exchange British pounds for US dollars at a 1:1 rate.