Originally Posted by
cbn42
Someone please help me solve this mystery.
I have a US-based debit card that does not charge any foreign ATM fees, and a US-based credit card without a foreign transaction fee. I am in a foreign country (Australia, in this case) and I withdraw cash from an ATM with the debit card. There is no surcharge on this ATM. Less than 5 minutes later, I go into a store and buy something with my credit card.
I compare the receipts and it turns out that the credit card gave me a slightly better (more AUD per USD) exchange rate than the debit card.
Shouldn't they both be converting based on the interbank rate? Both cards are issued by the same bank, both are Mastercard, and there are no foreign transaction fees on either one, so why are they different? I don't think the official exchange rate changed in 5 minutes. Any insights on what causes this discrepancy?
Read the ATM card's description carefully. There is a difference between no foreign ATM fees and no foreign exchange fees. No foreign ATM fees means that they won't charge you for the use of an out-of-network ATM. It does NOT mean no network fee. Your debit card may be passing on the VISA/MC 1% forex fee. Is the difference between the 2 rates (ATM vs CC) about 1%?
My ATM card also has no ATM fees. But the MC 1% network fee is passed onto me. My CC has no foreign exchange fees.