Eight 0% ForEx Cards and One Regular ForEx Card Tested:

Eight 0% ForEx Cards Tested
1) Stanford Federal Credit Union Visa
2) Chase British Airways Signature Visa
3) Capital One No Hassles Cash Signature Visa
4) Pentagon Federal Promise Visa
5) Pentagon Federal Premium Travel Rewards American Express
6) Citibank Chairman American Express
7) Citibank Gold AAdvantage DEBIT MasterCard
8) The-Card-Formerly-Known-As Charles Schwab 2% Cash Back Signature Visa

One Regular ForEx Card Tested:
1) American Express IDC Centurion

Eight separate and identical purchases made of HKD $50 on evening of 20 November, 2010 (HKG Time) at Muji To Go at Hong Kong International Airport. All purchases transacted within a three minute period. I also made one more purchase for HKD $244.00 with a "regular" ForEx card.


OANDA Daily Exchange Rates for HKD $50 on relevant dates:
Nov 19, 2010: US$ 6.44769 (USD $1.00 = HKD $7.75441)
Nov 20, 2010: US$ 6.44809 (USD $1.00 = HKD $7.75392)
Nov 21, 2010: US$ 6.44649 (USD $1.00 = HKD $7.75316)
Nov 22, 2010: US$ 6.44648 (USD $1.00 = HKD $7.75317)
Nov 23, 2010: US$ 6.44710 (USD $1.00 = HKD $7.75490)

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1) Stanford Federal Credit Union Visa
Purchase Date: 20 November, 2010
Purchase Amount: HKD $50
Transaction Date: 20 November, 2010
Post Date: 21 November, 2010
Transaction Amount: USD $6.45
Applied Currency Conversion Rate (USD to HKD): 7.75193
Variance to OANDA on TRANSACTION Date: (0.00025 = 0.025%)
Variance to OANDA on POST Date: (0.0016 = 0.16%)

2) Chase British Airways Signature Visa
Purchase Date: 20 November, 2010
Purchase Amount: HKD $50
Transaction Date: 20 November, 2010
Post Date: 21 November, 2010
Transaction Amount: USD $6.45
Applied Currency Conversion Rate (USD to HKD): 7.75193
Variance to OANDA on TRANSACTION Date: (0.00025 = 0.025%)
Variance to OANDA on POST Date: (0.0016 = 0.16%)

3) Capital One Cash Rewards Signature Visa
Purchase Date: 20 November, 2010
Purchase Amount: HKD $50
Transaction Date: 20 November, 2010
Post Date: 22 November, 2010
Transaction Amount: USD $6.45
Applied Currency Conversion Rate (USD to HKD): 7.75193
Variance to OANDA on TRANSACTION Date: (0.00025 = 0.025%)
Variance to OANDA on POST Date: (0.0016 = 0.16%)

4) Pentagon Federal Promise Visa
Purchase Date: 20 November, 2010
Purchase Amount: HKD $50
Transaction Date: 20 November, 2010
Post Date: 21 November, 2010
Transaction Amount: USD $6.45
Applied Currency Conversion Rate (USD to HKD): 7.75193
Variance to OANDA on TRANSACTION Date: (0.00025 = 0.025%)
Variance to OANDA on POST Date: (0.0016 = 0.16%)

5) Pentagon Federal American Express
Purchase Date: 20 November, 2010
Purchase Amount: HKD $50
Transaction Date: 20 November, 2010
Post Date: 22 November, 2010
Transaction Amount: USD $6.51
Applied Currency Conversion Rate (USD to HKD): 7.6805
Variance to OANDA on TRANSACTION Date: (0.00956 = 0.956%)
Variance to OANDA on POST Date: (0.00946= 0.946%)

6) Citibank Chairman American Express
Purchase Date: 20 November, 2010
Purchase Amount: HKD $50
Transaction Date: 20 November, 2010
Post Date: 22 November, 2010
Transaction Amount: USD $6.45
Applied Currency Conversion Rate (USD to HKD): 7.75193
Variance to OANDA on TRANSACTION Date: (0.00025 = 0.025%)
Variance to OANDA on POST Date: (0.0016 = 0.16%)

7) Citibank Gold AAdvantage DEBIT Mastercard
Purchase Date: 20 November, 2010
Purchase Amount: HKD $50.00
Transaction Date: 20 November, 2010
Post Date: 23 November, 2010
Transaction Amount: USD $6.45
Applied Currency Conversion Rate (USD to HKD): 7.75193
Variance to OANDA on TRANSACTION Date: (0.00025 = 0.025%)
Variance to OANDA on POST Date: (0.00038 = 0.038%)

8) The-Card-Formerly-Known-As Charles Schwab 2% Cash Back Signature Visa
Purchase Date: 20 November, 2010
Purchase Amount: HKD $50
Transaction Date: 20 November, 2010
Post Date: 22 November, 2010
Transaction Amount: USD $6.45
Applied Currency Conversion Rate (USD to HKD): 7.75193
Variance to OANDA on TRANSACTION Date: (0.00025 = 0.025%)
Variance to OANDA on POST Date: (0.0016 = 0.16%)


"Regular" ForEx Card:
1) American Express IDC Centurion
Purchase Date: 20 November, 2010
Purchase Amount: HKD $244.00
Transaction Date: 20 November, 2010
Post Date: 21 November, 2010
Transaction Amount: USD $32.42
Commission Amount: USD $0.94 (3%)
Applied Currency Conversion Rate (USD to HKD): 7.7509
Variance to OANDA on TRANSACTION Date: (0.00039 = 0.039%)
Variance to OANDA on POST Date: (0.00029 = 0.029%)

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Conclusion and Discussion:

I chose HKG for this test as the HKD exchange rate stays relatively stable against the USD so felt this would be a good, litmus test of the true exchange rates offered by the cards I tested. Surcharges are more difficult to hide when an exchange rate does not vary much.

All of the true 0% ForEx cards (Visa, MC & Amex) showed the same exchange rates. This was surprising to me.

All of the 0% ForEx cards tested, with the exception of the Pentagon Federal Premium Travel Rewards American Express Card, appear to be true to their word and are truly 0% ForEx. The variances between the OANDA rates and the actual amount charged by the cards (against both the Transaction and Post dates) are negligible (Note: that the largest variance was 0.0016 (or 0.16%) which is very small and within the exchange rate's daily trading ranges). The Citibank Gold AAdvantage Debit MasterCard (despite its 1% ForEx reputation) also appears to be truly 0% ForEx for purchases.

The Pentagon Federal Premium Travel Rewards American Express Card appears to be including a hidden 1% ForEx surcharge. This is congruent with my previous test (Post #1833 (and also Post #1551) in this thread). This should be taken into consideration when using this card overseas. In my opinion, PenFed should stop promoting this as a 0% ForEx card as it is apparently not a 0% ForEx card. It is a 1% ForEx card. The Pentagon Federal Promise Visa does appear to be a true 0% ForEx card but it does not have any rewards associated with it.

Knowing what I know now about the Pentagon Federal Amex, I wish I had also tested my BofA Virgin Atlantic Amex. As it is a proud and non-closeted 1% ForEx card, it would have probably yielded the same exchange rate as the PenFed Amex. This would have been good to prove. I will conduct a head-to-head test of the PenFed Amex and BofA Virgin Atlantic Amex and report back the results. I much prefer the BofA Virgin Atlantic Amex to the PenFed Amex.

The one non-0% ForEx card I tested, (Amex IDC Centurion) did, as expected, include a 3% commission (and clearly broke out the commission and gave the exchange rate on my statement).

I am beginning to really like the Stanford Federal Credit Union Visa. The rewards aren't stellar (1% cash back) but neither it, nor its cousin (the debit card) have any ForEx fees. The SFCU customer service is great and their debit card provides a good way to get access to your funds in local currency. It worked in every country I visited (Sri Lanka, Maldives, HKG, South Africa) without problems and I never alerted them I was traveling. I haven't read much about it here on the board but my experiences with SFCU have been very positive. You can join by becoming a member of the Friends of the Palo Alto Library if you're not affiliated with Stanford University.

Finally, I did not call any of the cards before hand (as I did in other tests) to alert the banks/CUs that I would be using the cards overseas. I was half way expecting some of them (i.e. the Capital One Visa) to come back declined but all approved instantaneously. Only PenFed called me later to confirm charges.

If anyone with the Pentagon Federal Premium Travel Rewards Amex has a chance to run a similar test against a known true 0% ForEx card while overseas, this would be most helpful. Perhaps if we have a few more data points we can get PenFed to be honest and admit to the 1% surcharge they are apparently hiding in their currency conversions.