mia

The moderators have received several private complaints and suggestions regarding this thread. For now, the thread will remain open and we will not split off the discussion of network fees.

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I do not have a high level of confidence in the answers that any CSR gives to this type of question, because I think they do not have reason to have access to information about the bank's contract with the network, nor the process by which exchange rates are calculated.

Nonetheless I submitted this identical question to Citi, changing nothing other than the name of the bank and the card (Prestige). The first response was a non sequitur. The second reply was:

pWei

XE only displays the rate for that day, probably at some predetermined time. The currency pair is traded continuously through the workweek of either country (~ 6 days) and there are many many intra-day rates.

In previous versions of the account agreements of cards, there was language describing how the rate is determined. It usually is/was the worst of the rates between transaction/posting date, and a range of dates bordering them too, depending on the card network. I also recall language permitting them to convert some currencies to intermediate currencies first. This is/was particularly a problem for non-USD accounts. You can see how EUR -> USD -> GBP could be a problem given the above.

Unfortunately, this language is now gone from the "clarified" or "simplified" post-crisis account agreement. Regulators strike a win for consumers again.

zyxlsy

Wait, what? You sure IHG MC uses better rates than Citi Prestige or Barclay A+?

I just did a quick check on my IHG MC vs A+ and found they offered me similar rates.

I did find that CSP uses marginally better rates than United Club, both Visa and both issued by Chase.

As a participant of the discussion, I think that all my data received by several years of experience using A+ in various countries, convinced me that it doesn't pass along the hypothetical 1%. And constantly it provides me with the best real-world rates in countries using fully-market-controlled currencies.

I personally think that being clear on this "99.9% true" fact is very important, or it will become misleading like some posts here are, until we have real-world data supporting A+ uses worse rates than other MCs with rewards features issued by major players like Citi or Chase.

What if some new guys here saw that A+ passes along 1% (which has been proven not true by my data of last several months in more than 5 countries) and decide to use other cards and end up missing that 2% cash back?

Phantom707

I understand people don't like me talking. I'll keep my message short to avoid angering people.

That just seems...bad. That means people aren't open to evidence. If people aren't open to evidence, there's no point in sharing information.

I understand you're saying there is no 1% fee on the A+. However, flip the question. What if there are some circumstances where it is charged (circumstances that you haven't come across), and people lose 1% as a result?

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I sincerely was trying to improve discussion. I won't reply to this thread at least for a while so that way I don't anger anyone more than I already have.

zyxlsy

You must've sensed that most of the posts here are against your posts. Please understand that they are not against you personally.

Using your own word, I have been wanting to see some hard evidence that A+ does pass the 1% to us, so we can avoid these situations in the future. However, after you aimed at A+, you failed to provide us with compelling hard evidence regarding A+ passing the 1%, and your conversation with Barclay rep posted is contradicting almost all of our data points.

Again, I admit we of course need to be vigilant, as the banks can change the rules without ever notifying us. It also is like if you didn't step onto a mine != there are none. Therefore I thank you for opening up this conversation.

However, I also do feel that spreading false fear is wrong. If you still have confidence in your claim, you need to show some real hard evidence that A+ does do under-the-table stuff. If you are not confident anymore, I think it is reasonable for you to just say to us that using A+ is safer than you once thought.

Mountain Trader

Live example just a bit ago.

Purchase=690 Euros

Rate per xe.com (Euros to Dollars) 1.13950

Dollar price using XE rate: 786.26

Dollar price used by Barclays via Arrivals+(Mastercard)= $791.90

Dollar price used bu Chase via CSP (Visa)=$789.28

I wound up with this comparison since Barclays rejected the charge but it still sits in my authorized transactions, for now.

This is not in line with my prior experience, which showed CSP to be between .25 and .70% higher after the forex conversion.

ajnaro

You should bear in mind that if Barclays had accepted the charge, the amount actually charged to your account could have been significantly different than the approved amount.

Mountain Trader

How is that and why? I am trying to learn here.

richarddd

Pending transactions are shown at the exchange rate on the date charged. Your bill shows the charge on the settlement date, which is later (and, it seems, always a business day). The exchange rate can move between those two days.

ajnaro

Even when the date charged and the date posted are the same, the amounts listed as pending and billed may be different. I don't know why. See my post 248 above for some concrete details. In that case the two dates were the same, yet the pending amount was significantly different from the amount actually billed, both in USD.

serpens

Thank you for this informative thread.

For those who want to see what ajnaro found, here is a direct link to post 248.

Unless I missed it, ajnaro, you don't say what the difference was between the pending and posted amounts for the Citi charge. In post 248, you say they are different, but in today's post, you say they are significantly different. It almost sounds like there was some hiccup in Citi's computers that got corrected.

zyxlsy

Pending amount can be different if the POS has DCC features or so forth. If the cashier enabled DCC then the user declined it, the pending amount could also be using the bad DCC rate. This explains why you can see a very bad pending amount for MC and then a better rate for Visa when we continuously see otherwise, because maybe the cashier enabled DCC for the first A+ try and then disabled it for the Visa transaction. This is one possibility.

Anyhow, the pending amount SHOULD reflect the rates of the time of the transaction. If we continuously see Visa worse than MC, the pending amounts should show the same thing if the terminal does not have DCC feature (DCC is quite ubiquitous in Europe and hard to defeat in some European countries). It is different from the thing that you see different amounts for pending and posted, which is due to the variation of rates for different days.

Again, pending amounts generally reflect rates used by different networks.

Today I just did several transactions in Okinawa and found Amex > Discover (JCB) > MC. I used my A+ and also my MC HSBC debit for cash withdraw from an ATM. They showed similar rates for pending amounts.

Let's see the posted results the final score.

The reason I excluded Visa is that I've tried numerous times to gain data letting me decide that Visa is so bad dealing with FX when fully-market-driven currencies are involved. If it is the case that Visa is better than MC for EUR, I do need to do some more tests to see whether things have changed.

However, we need to keep in mind that posted amounts are the final score. Pending amounts reflect, but are not concrete.

richarddd

Both MC and Visa post exchange rates on publicly accessible web sites. I include links a bunch of posts back. You might pick some days and compare.

Based on the dates I tried, MC is always better than Visa, although the spread varies from insignificant to not so insignificant. It's possible the dates I tried were not representative.

Mountain Trader

Same applies to Chase, right (though dates they become final may differ)?

zyxlsy

Thanks for mentioning. I've been using these sites.

Have you thought of what dates to compare since Visa has a website for USA and another for Europe? I mean, dates can vary by one since Europe is mostly UTC+1 and USA is < UTC-4.

Also even though my tests and calculations tell me MC is better than Visa as well, how come we have a fellow here saying his MC pending amount is higher than his Visa pending amount in EUR/USD? I'm quite confused by it, although I suspect DCC is involved.


BTW, I did several transactions in Okinawa. My A+ and HSBC MC debit all gave me 111.8 yesterday, but my Chase IHG MC gave me around 113 today and the day before yesterday. All are still pending, but I've never seen discrepancies this huge among MC cards before.

Maybe it's because of MC World vs MC World Elite? But my HSBC MC debit is not WE I think. I will keep you guys posted when these transactions are posted.