To follow up on my post before about whether CapOne has gone to 1%, I asked a friend to run some tests while in Canada last week, and the results were inconclusive.

On Sunday, 8/24, she bought three CAD1.45 packs of gum at the same store on the same day with three different credit cards.

• Her CapOne Visa showed a charge of US$1.39
• Her AmEx Starwood card showed a charge of US$1.42
• Her Citi AA MC card showed a charge of US$1.38 (+ a finance charge of .04)

At first glance it appears the CapOne charge was 1% more than the underlying Citi charge. But I believe the difference was due to changes in the forex markets on the days the charges were actually processed, not to CapOne charging 1% more.

Oanda.com lists the interbank rates as follows:

DATE Interbank Rate CAD1.45 (rounded)
08/24/2008 0.95540 US$1.3853 ($1.39)
08/25/2008 0.95550 US$1.3855 ($1.39)
08/26/2008 0.95380 US$1.3830 ($1.38)
08/27/2008 0.9520 US$1.3804 ($1.38)

In fact, both the CapOne and Amex charges were posted online a day or two before the Citi charge. Therefore, assuming the CapOne and Amex charges were processed on 8/24 or 8/25, and the Citi charge was processed on 8/26 or 8/27, the one cent discrepancy makes perfect sense and CapOne is indeed 0%, Amex is 2% and Citi is 0+3% as one would expect.

Of course it should also be noted that those Interbank rates from Oanda do not tell the whole story. Actual currency markets have a fairly wide trading range that can vary by more than 1% in a single day on volatile days (and what days aren't volatile in this economy?). It's therefore not impossible that there would be a 1% or larger discrepancy even if the charges were processed on the same day, if the banks obtained different underlying rates. A year or so ago, I made a series of charges in one day in Budapest using my CapOne card, and one charge came in at well over 1% above the others. I suspect it was because it was processed at a different time. A friend with a Bloomberg checked, and the rates were particularly volatile during the days immediately after the transaction.

Bottom line: YMMV and it's very difficult to ascertain for sure the exact fee that is being assessed on your card. We'll keep trying to figure it out, though. I have another friend going to Canada in a month or two and he's going to try to split his hotel bill among a handful of different cards so we can get results with less room for rounding errors.