Old Mar 18, 16, 11:46 pm
Join Date: Jan 2015
Posts: 1,112
Originally Posted by Kremmen View Post
The whole point of the thread was to explore what the user actually pays. Cards marked as "no FTF" may have different effective rates, even when issued by the same bank. The whole point is that just relying on the financial institution's claims as to what fee you will be charged is insufficient to be able to work out what you will actually be charged.
I completely agree. That's basically exactly what I've said in my previous posts. I've been saying that we need more datapoints.

Having shown that attempting to make blanket statements from the basis of bank documents is utterly pointless, you are trying to do it anyhow.
That is a gross misrepresentation of my position. Maybe that's what you read as being my position, but nowhere did I say that.

My first post that started this whole thing off was me saying I think MasterCard usually uses lower exchange rates even though they charge a 1% fee.

I stand by that statement. I think that MasterCard, as a general business practice, still does that, still charges banks a ~1% fee which is passed on to customers. Literally all of the evidence points that way, and you have neither cited a single article nor given your own data to disprove that.

Your reply to me was that you're talking about cards that claim to have no foreign transaction fees and that you didn't understand what I meant by a 1.1% fee.

I have since shown exactly what I meant by a 1.1% fee. I have shown that that 1.1% fee is still charged on cards that claim to be foreign transaction fee free.


However, remember that I said "usually" in my first post. I have always been saying that I think in the real life, there are cases where the best option is to use a MasterCard despite the fact that MasterCard is supposed to charge that 1.1% fee. That's exactly what I meant when I said that MasterCard's usually lower exchange rates get balanced against this 1.1% fee that's, based on all available evidence is still charged.

This is the reason that I proposed the four different possibilities.

All of the available legal documents and statements from banks are saying one thing, but that doesn't actually mean that it's charged. That's why I've been advocating that people post more data, in order to try to determine what the practical implications of these documents are.

Regardless of all of the evidence of these legal documents (and again, I'm specifically still talking about the documents and the statements of the bank), you still say that that proves nothing.

Yes! You're right! That proves nothing except for the fact that those documents exist. It is absolutely undeniable that those documents and statements exist. What they mean in real life is still open.

But then you've consistently said that that fee isn't charged to cards. Here you said that the documents from small banks and the general statements about MasterCard's business practices don't matter.

You say "Firstly, 5/6000+ is an insignificant number." Do you expect me to go through all 6,799 US Banks and ask every single one of them?

As I've said multiple times, my whole point is to make a presumption. That presumption is not unassailable; it can be proven wrong by a preponderance of evidence. That's why I keep asking for evidence from anyone. But you haven't given any evidence.

This is the really important point. You keep thinking that the default position to believe is that MasterCard doesn't charge these fees/these fees aren't passed onto customers on cards that say "no foreign transaction fees".

You haven't justified that default position. You keep asserting it as a default position and then say that in order to disprove it, I have to present a mountain of evidence.

Why don't we flip it? All of the evidence says that this is a general business practice, that MasterCard routinely charges banks this fee regardless of whether the issuing bank describes a card as foreign transaction fee free.

Now it's your burden to disprove that point. Now you're the one who has to present evidence that that's wrong. Why? Because I've given general evidence that this is what MasterCard does.

Next, you said "Secondly, only banks with rewards cards are really relevant here." Yeah, I'm still talking about banks with rewards cards. As a very salient particular example of that, there's the Arrival+ card from Barclay. That's a popular rewards card, and I've gotten a very direct response from the representative that a 1% fee is still passed on from MasterCard.

Third, you say "Thirdly, even if the banks were relevant, these fees often vary by product, so blanket statements even restricted to one bank are meaningless. One bank can have some FTF-free cards and some that charge 3%."

Okay, here's probably what you're talking about. However, this is exactly why I've been asking for more data, so that we can determine this for different cards even within the same bank.

Also, you're missing the point of the documents and statements that I've provided. The documents that I've provided all give the statement that the fee is charged on all cards issued by the bank.

Again, this is not an unassailable position, but it's a presumption situation. You're the one taking the non default position. You're the one who has a burden of proof that you have not met.


Then in your next reply to me, you say that my "blanket" statement is still wrong. On what basis do you say this?

Again, there are general documents about MasterCard's business practices that show that it charges a ~1% fee. Then there are the individual cardmember agreements.

Again, you haven't shown how that premise is false.

Here's another important point. Recall the excerpt I made from Barclay's sample terms and agreements. I'm not talking about the secure message. It's the following:

For MasterCard Cards, we and MasterCard (or their affiliates) will convert transactions in foreign currencies into U.S. Dollars. MasterCard will use their currency conversion procedures that are current at the time of the transaction.

I legitimately challenge anyone to not find a similar clause in another MasterCard card, regardless of whether it is advertised as being foreign transaction fee free or not.

Importantly, something very similar to that is in pretty much every single MasterCard card. It is this clause that arguably grants MasterCard and the issuing bank the ability to pass on this fee to the customer. Importantly, it's in pretty much every MasterCard.


You made the blanket assertion that MasterCard charges a 1.1% fee. Every single example (and there are plenty of them) of fee-free MasterCards is a reason why it's false.
Refer to the above. Every single cardmember agreement is a reason why you're wrong. Every cardmember agreement will say that MasterCard sets the exchange rate. That means that they can pass on that 1% fee in the exchange rate.

No Chase IHG MC documents suggest any such fee.
Okay, I don't have my Chase IHG MC cardmember agreement in front of me. But I would be absolutely shocked if it didn't say that MasterCard sets the exchange rate. That's where they would build in the fee.

The empirical evidence of my last 50 transactions at an average of better than the market rate (according to xe.com) shows that the Chase IHG MC doesn't charge such a fee.
Okay, that's great. I like that you're actually providing some data now.

Therefore your claim is false.
Nope. Again, my claim has firstly been about presumption (that people should default to the belief that MC charges this fee that is passed on to customers) and then I have a second claim about how that works out in real life, a claim that I have very clearly said I don't have enough data to say either way.

In order to disprove your statement, I would need more information. I would very much appreciate seeing the transaction date, the transaction post date, and the amounts for all of those transactions.

Providing that would give more credence to your statement and allow others to draw their own conclusions from the data.

For example, you have said that you're comparing to the xe.com rates. I've said that it's possible that MasterCard uses a lower exchange rate, and that masks the effect of any 1% fee passed on to customers.

I'll take these as examples. For the date 11 March 2016, xe.com reports an exchange rate of 1 EUR being worth 1.1183492445 USD. On the other hand, the MasterCard conversion tool reports a rate of 1 EUR being worth 1.107800 USD.

Let's see how that math works out? 1.107800 * 1.01 (a 1% fee) = 1.118878. That is extremely close to the rate reported by xe.com. It's so close that I would wager that over 50 transactions, it's highly possible for a completely responsible, reasonable person to miss any difference. I legitimately do consider you to be a responsible, reasonable person (just based off of your comments here; I don't know you in real life). But even then, you could still miss that small difference. So, what does that mean?

It lends some weight to my idea that MasterCard routinely charges a lower rate, and that offsets the fee that they charge.


Furthermore, others have posted evidence of even A+ not charging the fee!
How are they posting that evidence? Are they basing it off of the xe.com rate (or some other seemingly neutral rate) or the reported MasterCard rate?

As shown above, this can make a substantial difference.

1) If you have evidence about A+, fine, but attempting to extrapolate it to the rest of the card market is just ludicrous.
I don't personally have evidence about the A+. However, I've cited to people who did systematic data gathering (refer to the comment by mizzou1 that I linked previously).

Also, this is why I've been asking for people to post more data.

2) If you have evidence about A+, the only evidence that is worthwhile is actual real-world data. Do you have one? Have you used it? If so, post the results. If not, your assertions are off-topic.
I do have the card, but I haven't used it for purchases outside the US nor have I used it for purchases in other currencies.

My "assertions", as you call them, are still on topic as should be evident from my above statements.


I know my post is long, so here's a TL;DR for the general public (this doesn't really apply to Kremmen because I made a reply to what he said).

If you have experience using a MC outside the US, please post the transaction date, the transaction settlement date, and the amounts you were charged (both in the local currency and in USD).

Please, do not just say it's on par with XE.com. As shown above, there's actually sometimes a difference between XE.com and MasterCard's exchange rate.
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