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Foreign exchange rates discussion [FOREX]--all cards

Foreign exchange rates discussion [FOREX]--all cards

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Old Mar 8, 16, 11:26 pm
  #241  
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Originally Posted by Phantom707 View Post
I legitimately think that MasterCard naturally uses lower exchange rates most of the time and that MasterCard charges the 1.1% fee (which is really a 0.9% fee and a 0.2% fee). The two usually balance each other out.
This thread is mostly talking about cards which claim to have no foreign exchange fee. (In the case of Mastercard, they clearly have no forex fee, when the exchange rate comes in consistently better than the mid-rate.)

What on earth are these seemingly random 1.1% fees that you are talking about and how are they relevant?
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Old Mar 8, 16, 11:52 pm
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By looking at the rates of A+ and Citi Premier, I don't think MC charges that 1.1%. Even if it does, it is absorbed by the issuers.

If we all consider the differences between the posted rates and xe.com rates, we might categorized that differences as fees. However, I have never seen a hard 1.1% fee ever.
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Old Mar 9, 16, 4:15 am
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Originally Posted by richarddd View Post
Using mia's numbers, and blanking the 5th and 6th (given that MC doesn't report and they just repeat the 4th for Visa and MC), averages for March 1-8 were (to five decimal places)

MC, 1.08974
Amex, 1.09572
Visa, 1.096407

On 1,000 EUR of charges for this period, Amex would cost about $6.00 more than MC and Visa would cost about $6.65 more.

I don't know if these dates are representative of other or longer periods or if the rates on the web sites match actual charges.
xe.com for those dates: 1.09468

That's higher than MC and a bit lower than Amex and Visa. xe reports mid-market rates as of 17:00 UTC on the relevant date. xe reports weekend rates, which I've ignored given the way the cards treat weekends. Issuers may (or may not) use different times of the day to calculate exchange rates, which may result in different rates.

Last edited by richarddd; Mar 9, 16 at 4:26 am
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Old Mar 10, 16, 4:09 pm
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Originally Posted by Kremmen View Post
This thread is mostly talking about cards which claim to have no foreign exchange fee. (In the case of Mastercard, they clearly have no forex fee, when the exchange rate comes in consistently better than the mid-rate.)

What on earth are these seemingly random 1.1% fees that you are talking about and how are they relevant?
Page 9 of this document provides the clearest explanation. https://www.radiusbank.com/assets/fi...D-20150528.pdf

The document makes it explicit that MasterCard charges the bank a 0.9 % fee for transactions that occur outside the US. Then it also charges the bank 0.2 % for currency conversion. The bank then transfers that fee to the customer.

This is the case even though the bank explicitly says that they don't charge any foreign transaction fees.

There were comments either in this thread or a similar thread about how people have called Barclay specifically and have been told that there is a 1% fee that MasterCard charges that gets passed onto customers.

My reasoned belief is that MasterCard does charge this to the banks who pass it onto customers. In addition, however, MasterCard has statistically lower exchange rates, making it balance out to some extent. That's my position.
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Old Mar 11, 16, 7:30 pm
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Originally Posted by Phantom707 View Post
The document makes it explicit that MasterCard charges the bank a 0.9 % fee for transactions that occur outside the US.
I am very curious how then the transactions occurring outside US but billed in USD are handled. It is customary for cards that charge FTF to treat such transactions as foreign and levy their surcharge. However, I am not aware of a single case where some hidden surcharge would have been added to FTF free cards. So what happens to that 0.9% or 1% hidden surcharge then, bank eats it selectively only for USD transactions?
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Old Mar 12, 16, 4:31 am
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Regarding MC charging the bank a fee, if you have a recent MC transaction, please check if you were charged the rate implied by https://www.mastercard.com/global/currencyconversion/. Use the settlement date, not the charge date. This should reveal whether a fee is being charged.

Last edited by richarddd; Mar 12, 16 at 4:40 am
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Old Mar 12, 16, 4:51 am
  #247  
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Originally Posted by richarddd;26321678... please check if you were charged the rate implied by [url
https://www.mastercard.com/global/currencyconversion/[/url]. Use the settlement date, not the charge date. .
Citi Prestige MasterCard.
Posted: March 9, 2016
Amount: GBP 555.66
Convert: USD 795.54
Rate: 0.698469 (1.432)

Lookup tool shows:

GBP Pound sterling 0.702198 (March 9th)
GBP Pound sterling 0.698470 (March 10th)
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Old Mar 12, 16, 10:19 am
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I did a test with: Citi Executive AAdvantage Master Card, American Express SPG, and Chase Sapphire VISA on 29 Feb in Rio de Janeiro, Brazil. The AMEX and Chase VISA charges were made at the same merchant, one immediately after the other, using the same terminal. The Citi MC charge was made a few minutes later at a different merchant. All three posted eventually with the same date, although they were listed first as pending charges. In the case of Citi MC, the pending amount was not the same as the posted amount the posted amount in USD was higher than the pending amount. Using the posted amount only, the three transactions resulted in the following exchange rates:

Citi Executive Master Card: 3.965
American Express SPG: 3.930
Chase Sapphire VISA: 3.979

The three rates are close, but Chase VISA was the best and AMEX was the worst, with MC coming in closer to VISA than to AMEX. The bad result for AMEX is in line with my previous experience. The XE.COM rate for 29 Feb is 3.978, virtually identical to Chase VISA. Based on this result, as well as previous experience, I will no longer use the 'zero surchage' AMEX SPG for non-dollar charges (except at SPG hotels, while they exist).
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Old Mar 12, 16, 11:26 am
  #249  
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Transactions in London on 13 Feb 2016:

Citi Prestige MasterCard
In all cases Citi shows the Transaction -and- Posting date the same
9.45 = 13.65 = .6923
14.66 = 21.17 = .6925
18.39 = 26.56 = .6924 (1.44)

American Express SPG (Business)
4.80 = 6.97 = .6887
1.95 = 2.83 = .6890 (1.45)

Some of this apparent difference is rounding. Both currencies are denominated to two decimal points. If I rounded everything at two places both exchange rates would be 69 pence per Dollar. With differences of this magnitude I choose the card based on features or rewards rather than exchange rate. American Express SPG has Contactless payment feature -and- the points transfer to airlines 1:1.25. Citi has wider merchant acceptance, 2X for dining and entertainment.

Last edited by mia; Mar 12, 16 at 12:01 pm
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Old Mar 12, 16, 5:22 pm
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Originally Posted by Phantom707 View Post
I legitimately think that MasterCard naturally uses lower exchange rates most of the time and that MasterCard charges the 1.1% fee (which is really a 0.9% fee and a 0.2% fee). The two usually balance each other out.

At least that's my explanation since it seems to make the most sense to me. I have not looked at the numbers in a while to verify this.
I've already refuted this supposed hidden fee several times.

Barclays could be eating some hidden fee, but it isn't passed on to me using the A+, so it's irrelevant. The deals each bank has with MC behind the scenes could vary significantly.

A more useful direction for this thread would be determining which network gives the best FX rate for each major currency so that people with multiple cards know what to use. In the case of AUD, that is without a doubt MC. It would be interesting to collate other data.
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Old Mar 12, 16, 5:59 pm
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Originally Posted by patrick.barnes View Post
A more useful direction for this thread would be determining which network gives the best FX rate for each major currency so that people with multiple cards know what to use. In the case of AUD, that is without a doubt MC. It would be interesting to collate other data.
Between MC and Visa, that should be easy by monitoring the web sites for a while. Amex would require finding a similar web site or more reports.
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Old Mar 12, 16, 7:03 pm
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Originally Posted by patrick.barnes View Post
I've already refuted this supposed hidden fee several times.

Barclays could be eating some hidden fee, but it isn't passed on to me using the A+, so it's irrelevant. The deals each bank has with MC behind the scenes could vary significantly.

A more useful direction for this thread would be determining which network gives the best FX rate for each major currency so that people with multiple cards know what to use. In the case of AUD, that is without a doubt MC. It would be interesting to collate other data.
And I've already refuted your refutation. There are multiple data points from other people that show a significant fee that matches with the ~1% fee.

As I've said before, yes, you may not have experienced it, but other people apparently definitely have.
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Old Mar 12, 16, 8:11 pm
  #253  
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Originally Posted by richarddd View Post
Amex would require finding a similar web site or more reports.
I have access to such a site, but the base currency must be USD. The published USD/GBP rate for 13 February is .688 which matches my actual charges on that date:

American Express SPG (Business)
4.80 = 6.97 = .6887
1.95 = 2.83 = .6890 (1.45)

Just let me know what information you would like me to lookup.

Last edited by mia; Mar 12, 16 at 8:22 pm
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Old Mar 14, 16, 7:57 am
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Originally Posted by Phantom707 View Post
And I've already refuted your refutation. There are multiple data points from other people that show a significant fee that matches with the ~1% fee.

As I've said before, yes, you may not have experienced it, but other people apparently definitely have.
I've done numerous tests using a USD A+ for free-trading currencies like SGD, and controlled currencies like CNY and IDR, and found conclusively that there is no such fee of 1.1%.

Some people here also confirmed the non-existence of the 1.1% fee on AUD. (sorry source people)

Sometimes the currency variation might trick people to think that it is a fee, but in fact it is just currency fluctuation. You need at least three transactions on three different days to filter out fluctuation. If you see 1.1% consistently, then we can confirm the existence.
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Old Mar 14, 16, 8:06 am
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Originally Posted by mia View Post
I have access to such a site, but the base currency must be USD. The published USD/GBP rate for 13 February is .688 which matches my actual charges on that date:

American Express SPG (Business)
4.80 = 6.97 = .6887
1.95 = 2.83 = .6890 (1.45)

Just let me know what information you would like me to lookup.
If you use the info on the site you mention and compare directly with Visa and MC rates on their website, do you see consistently that AMEX's rates are the worst on paper?
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