Old Sep 23, 15, 8:09 pm
Join Date: Mar 2014
Location: SJC/BUR
Programs: Hyatt Diamond, IHG Platinum, Hilton Gold, Club Carlson Gold, Starwood Gold
Posts: 563
posted this in TravelBuzz but I think this crowd would appreciate my thoughts:

Just got back from New Zealand where I did a pretty substantial test of the no-foreign transaction fee claims of Amex/Mastercard/Visa.

This needs to be shouted from the rooftops: DO NOT USE A VISA WHEN TRAVELING ABROAD. USE A MASTERCARD.

Then this needs to be whispered: or, maybe, an Amex.

To start, I love my Chase Sapphire Preferred. I bought into the blog hype. I love transferring points to partners. I love that it gives double points. I love that it has no foreign transaction fees.

After this trip, I love it a LOT less.

On 9.16.15, I made two 36 NZD purchases, one with a Barclay Arrival Plus Mastercard and one with a Chase Sapphire Preferred Visa. Both claim to have "no foreign transaction fees." The MC posted as 22.66 USD; the CSP posted as 22.98 USD. That's a 1.41% spread. I like Ultimate Rewards points, but I don't like having to pay for them!

On 9.17.15, concerned about what I was seeing, I tested my CSP against my Amex Platinum. I spent 10.25 NZD on each one. The Amex came back at 6.52 USD; the CSP came back at 6.61 USD. That's a 1.38% spread.

On 9.18.15, I decided to compare the "good guys." I did 22 NZD on the Mastercard and 22 NZD on the Amex Platinum. The Mastercard came back 14.04 USD and the Amex came back at 14.00 USD. That's a 0.29% spread.

Of course, I would put Amex acceptance in NZ at about 60% that of the big two.

At a restaurant on 9.19.15, I again compared the CSP and the A+MC to confirm what I was seeing. I spent 15.50 NZD on two different cards, splitting the check in half. The CSP came to 10.01 USD, and the MC came to 9.90 USD. That's a 1.11% spread. With one card giving 2.22% cashback and the other giving two Ultimate Rewards points, I'd have to value an Ultimate Rewards point at more than 1.67 cents to like what was happening to me. That's a bit of a stretch.

On 9.21.15, at another restaurant, I again put the MC and the Amex head to head, splitting the check and putting 25 NZD on each card. The MC came back as 15.96 USD and the Amex posted at 15.92 USD. That's a 0.25% spread.

Finally, on 9.21.15, I checked out of the Crowne Plaza Queenstown and split the bill halfway between the CSP and the A+MC. Each card took a 189.50 NZD charge. The CSP came back as 122.39 USD and the MC came back as 120.98 USD. That's a 1.17% spread. Now I'm buying UR points at 1.7 cents each!

If you spent 5,000 USD on a nice vacation in a foreign country, here is how each card would shake out on average:

Amex 5,000 USD
Mastercard 5,014 USD
Visa 5,070 USD

I make no money from this endorsement, but if you like foreign travel, a great card is looking to be the Citi ThankYou Premier MasterCard. You get 3x on travel, 2x on dining, and each point is worth at least 1.3 cents each in some shape or form. Meanwhile, MasterCard is only shaving off 0.25 cents relative to Amex. That's a much, much, MUCH higher return than a Chase Sapphire Preferred. Put another way

$1,000 USD restaurant bill in a foreign country can be either:
2,000 ThankYou Points plus $2.80 in foreign transaction costs above and beyond Amex
2,000 Ultimate Rewards Points plus $14.00 in foreign transaction costs above and beyond Amex

Would you really pay ~$11 to have 2,000 Chase points over 2,000 Citibank points? Can you wring $140 more value out of a 25K United redemption over a 25K Singapore redemption?

to Chase Sapphire Preferred
^ to any and all MasterCard products

PS: I would love someone to run a similar test with Discover Card!

Last edited by stvr; Sep 23, 15 at 9:01 pm
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