CapitalOne "no foreign transaction fee" sneaks in extra 1.5% in exchange rate!
 

:td:

I just purchased Bangkok airways tickets using my CapitalOne card which supposedly carries no foreign transaction fee. The cost was 24,930 Thai Baht, which using XE or Yahoo should have converted to about $812. On my statement, the charge is $824, or about 1.5% more.

The exchange rate used by the card was 1USD = 30.238707486 THB.

According to WSJ on the days surrounding my charge the rate was around 1USD = 30.479 - 30.619

XE has
1USD = 30.29 - 30.65 (the 30.29 was a very brief dip)

I think I (and everyone else using CapitalOne) is being screwed by these exchange rate manipulators posing as a "no foreign transaction fee" card.

See comments in this page also: http://www.maximizingmoney.com/cash-...exchange-fees/

Folks in those comments say that their AMEX transactions used a much different exchange rate on the same day than CaptialOne.

First of all, one example does not establish a pattern. I've had the opposite experience with my Cap One cards - the exchange rates have consistently been lower than the Interbank rate for both credit card and ATM card transactions.

Well, my example plus those in the comments of the linked web page.

As far as I am concerned one padded exchange on a major purchase is one too many.

The article is from Oct 2007, so if it's a new development, I guess it's been new for awhile.

Do the various CC issuers all use the same index or not? WOuldn't that tend to explain some variation from card to card or compared to online info?

Chase has a few cards that no longer charge forex fees, and I seem to recall another issuer (forget who) that dropped it recently. So there are some new options now if Capital One isn't so good anymore.

My experience with a trip I did in Dec with my new CapOne card was similar to mahasamatman, my rates were lower than what I was expecting. My guess is, and looking at a graph on Oanda over the past 30 days confirms this is possible, that the rate fluctuated about 1.5% overnight and the difference you are seeing is the result of the rate they used being the difference of either the posting date vs the transaction date.

The comments in the article are from 2009.

The fact is that looking at Oanda, XE, and WSJ, the rate that I was charged did not exist at all during the time period from when I booked the ticket until it posted.

I think Mastercard may be the one who determines the actual exchange rate. Perhaps they have developed their own method of high frequency trading where they get the most advantageous instantaneous exchange rate during the time between purchase and posting.

Anyway, you've been warned!

FWIW, I never would have noticed on a small transaction, but this was large by my standards so I paid attention.

Timing can be a major issue. Different card issuers do use different non-disclosed methodology of arriving at the exchange rate and most large banks make money on the transactions apart from the nominal fee. Some do not. You might want to check CapOne history of consumer complaints and regulatory violations if you are concerned about their specific fees. CapOne is well known for finding ways to make money on almost all customers; they are not known for missing an opportunity, nor for ensuring that they disclose anything they are not legally required to disclose.

I used my CapOne card over Christmas and I didn't see any problems with the exchange rates between USD - DKK and USD - EUR.

You can check the MC exchange rate here:
https://www.mastercard.com/us/person...ion/index.html

Hmm, the posted exchange rate on the date of purchase (1/17) was 30.3362, the rate on the date posted (1/18) was 30.359. I was charged 30.238, which equals Mastercard's rate on 1/19, so it looks like I got MCs exchange rate for 1/19 which is somewhere close to the minimum interbank bid price.

Sorry CapitalOne, looks like it's Mastercard's scam after all.

The rates you see on XE are mid market rates - see here for an explanation. No trades, ever, ever, ever happen at these rates. Mastercard's rate may or may not be the most competitive, but it's unrealistic to compare it to the rate you see on XE. A better comparison would be the buy and sell rates from other credit card networks, your own bank, or the travelex at the airport.

OK so I looked at Visa's equivalent web page giving their daily exchange rates, and they give a far better rate for the same date 1/19:

MC: 1 USD = 30.2387 THB
VISA: 1 USD = 30.569927 THB

http://usa.visa.com/personal/using_v...x_rates_us.jsp

FWIW, I have used my Capital One visa internationally a lot, and I get great currency conversion. From what I read above, it sounds like I got lucky not using MC.

You may also want to check the XE rate of the DATE OF POSTING, NOT the DATE OF TRANSACTION.

If a currency is volatile even a couple days apart it could make a big difference.

I dont know whether CapOne use Date of Posting to determine Xchange rate or Date of Transaction.

I know FIA, Chase and Citi all use Date of Posting instead of Date of Transaction.

In Spring of 2009, the Korea Won had WILD gyration, and I saw my exchange rates had more than 5 % difference on my FIA card.

Same happened again in June/July for Euro that directly affected Turkish Lira. Even my cash withdrawal from ATMs which the rate is always the moment of withdrawal - had again more than 5% difference among 3 withdrawals in 5 days.

So you may want to double check your statement before you come to that conclusion. Not saying you are wrong but it worth to make sure you are checking the correct date.

EDIT:

Ooops, I saw you have figured that out after all.