Kremmen

There are 6,799 FDIC-insured US banks (as of 2014). Firstly, 5/6000+ is an insignificant number. Secondly, only banks with rewards cards are really relevant here. 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%.

Ancient articles in a rapidly changing marketplace are likely to be irrelevant. In the past 5 years, there have been competitive changes and law suits. 5 years ago, even 1 year ago, some of the best rewards cards in the industry had hefty FTFs (e.g. SPG Amex). Much has changed.

Phantom707

If you read the rest of my post, you would know that I either explicitly or implicitly mentioned those points and then answered them.

Yes, those are institutions that you've never heard of and articles that are fairly old.

But that doesn't detract from the possibility of this situation and the need to gather more data. But apparently some people are unwilling to have such data.

Also, why does it matter that those articles are old? You say they're "likely to be irrelevant". I'm setting up a presumption shift. I've given evidence that MasterCard does do this. That's the default position. It's now your burden of proof that "much has changed" in this specific area. Obviously, much has changed in other areas, but it remains to be proven that this specifically has changed. You're just vaguely hand waving and gesturing and trying to say that it's obvious that this has changed when it's not obvious at all.

I specifically addressed those concerns already and explained why I made those citations.

Kremmen

No, you didn't answer them. You started with what is, for all banks being discussed here (with a possible Barclays exception), a false premise: "So we start with a single premise, that the legal documents (and phone calls) suggest there is a fee." Everything following from the false premise is irrelevant.

No, you haven't given evidence that MasterCard does this (present tense), you've given evidence that MasterCard used to do this 5 years ago. Card T&C documents come out every year. Anything more than a year old is unreliable.

Phantom707

How is that false? You haven't given a single reason that that's false. At least as recently as 29 June 2015, when this thread was started, http://www.flyertalk.com/forum/credi...ose-1-fee.html, there was direct email confirmation. That's confirmation in writing that Barclay specifically passes on that fee.

It's a true premise that you're just vaguely hand waving away. You haven't given any reason not to believe it.

Then it's your burden to present any evidence that it's not included int he terms and conditions. You haven't done that.

And it is included in the terms and conditions (at least in the standard terms; maybe your individual card is special and different).

https://www.barclaycardus.com/app/ja...Agreement.html

"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. Currently, the currency conversion rate they use is either the wholesale market rate or the government-mandated rate in effect under those procedures increased by one percent. The currency conversion rate used on the conversion date may differ from the rate in effect on the date you used your Card or Account."

That means that they use MasterCard's exchange rate.

That means that they might be putting the ~1% fee into the currency conversion rate.

Further, as mentioned before, there is empirical data that the Barclay Arrival+ specifically has a worse currency conversion. http://www.flyertalk.com/forum/24889793-post2298.html

That has continuously not been refuted. And this information cannot be assailed by patrick.barnes' claim that people don't know the difference between transaction dates and settlement dates. That person did back to back identical transactions, and the Arrival+ always gave rates "0.73% to 1.27%" worse than the Capital One Visa card.

And this is exactly what I'm talking about. All I'm saying is that more information is needed before we can reach a more solid conclusion. Your statements actively discourage people from posting any such data.

Phantom707

Here's more information supporting my point. I sent the following secure message to Barclay today.

Notice how I tried to make the question as clear as possible. I specifically made the distinction between what Barclay advertises, on the Arrival+ specifically, and what MasterCard passes on to the bank.

They replied by saying

I know that Barclay customer support is not the best, but I made a very direct question. This gives a lot of weight to the statement that there is a fee. At the very least, Barclay itself reports that there is a fee.

And that's exactly what I mean. You keep saying that I haven't proved anything, but I'm not trying to prove anything. I'm giving a lot of strong evidence to setup a presumption, but you're just hand waving that away.

As a note, I sincerely do not mean for this to be a personal attack in any way, and I apologize if it comes off as such. I am trying to have a conversation about the evidence before us.

Kremmen

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. Having shown that attempting to make blanket statements from the basis of bank documents is utterly pointless, you are trying to do it anyhow.

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. No Chase IHG MC documents suggest any such 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. Therefore your claim is false.

Furthermore, others have posted evidence of even A+ not charging the fee!

1) If you have evidence about A+, fine, but attempting to extrapolate it to the rest of the card market is just ludicrous.
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.

Kremmen

It seems like a good time to comment on this. The reason we use rewards cards is to receive a benefit. If we want to receive the most overall benefit, we want the optimum reward-minus-fee value. IHG points are one of the worst value rewards, but the IHG MC has one of the best exchange rates. This type of dilemma is sure to come up for many of us, depending on which cards we have. We can talk about just the forex rate side, but you can't totally divorce the two when looking at the overall picture.

Now, we have one user writing multiple screeds apparently based on zero empirical data. That is way more damaging to the discussion than an occasional drift into overall card value.

Phantom707

I completely agree. That's basically exactly what I've said in my previous posts. I've been saying that we need more datapoints.

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.

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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.

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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.

---

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.

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.

Okay, that's great. I like that you're actually providing some data now.

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.

THIS IS WHY I'VE BEEN ASKING PEOPLE TO REPORT MORE DATA

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.

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.

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.

Conclusion

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.

Kremmen

Exactly. And time and again those transactions go through marginally under the interbank rates given by xe.com, showing that there is zero fee.

I can only assume you made that remark to be inflammatory, given that I have been providing data from the beginning of this thread and you have provided none.

I am not posting the whole of my purchase history on FT, nor do I understand why you'd want me to, except to cause havoc and waste time. The values vary and posting individual data points is, in my opinion, much less valuable than posting long-term averages.

No, it would have no more credence than posting averages. What it would do is expose tons of my private information to the world for no reason and massively bloat the thread, making data harder to find and comprehend, which is exactly what your recent barrage of posts is doing.

You yourself said of the exchange rate: "That's where they would build in the fee." Yes. Exactly. It's not there.

Yes, that's why I started putting this data into a spreadsheet and why I started this thread.

Nope.

So, you have zero empirical data to provide and just want to ruin this thread by filling it with your data-less comments. Great. If you wanted to be helpful, I'd suggest removing every post you've made from this thread that doesn't contain empirical data.

Phantom707

As stated before, xe.com is only one source for currency rates. It is not the only source, especially so given the existence of sites like the MasterCard currency conversion tool.

That's being a little bit mean (I'm not saying inflammatory; I'm saying mean). I was not being inflammatory. I legitimately did appreciate that you were providing data. You mention that you have been providing data from the beginning of the thread. However, you didn't provide the raw data that I'm interested in. Yes, it's good that you provided data, but that says nothing if the data has already been interpreted through a lens that is faulty.

Then you say I've been providing no data. I'm providing third party data by citing other people.

Further, I'm providing data in the form of the statements of financial institutions such as Barclay. That is also a valuable form of data even though it doesn't involve numbers. Data can be both qualitative and quantitative, and both are important, especially in this discussion.

I've explained very, very, very, very explicitly why the information for the individual transactions would be highly important. I will state the reason again.

Rates listed on xe.com are only one rate. Another source of rates is the MasterCard tool. Those rates can differ. Those rates can differ by a substantial amount (such as by 1%).

One of my contentions has been that MasterCard uses a rate lower than places such as xe.com, but they add on a ~1% fee. The net result is often a rate on par with the rate from xe.com or a little lower or a little higher.

That is why it is important to see the individual transaction amounts.

It is most definitely not about the long term averages. It would be more important to know the individual data points.

If you do not wish to provide the information for privacy reasons or any other reasons, that's perfectly reasonable. I'm not going to force you, and I obviously don't have the power to. However, your choice to not provide the individual data points directly means that your claims are unsubstantiated.

Again, if you value your privacy, then that's perfectly reasonable. However, that also means that we can't actually scrutinize the data. For all we know, you're misinterpreting it.

That's been one of my main points all along. If you just pay attention to the xe.com rates, then yes, you are misinterpreting the data, and your conclusions are therefore skewed and false.


I've given a mathematical example of a way in which MasterCard could add on a fee.

Again, all you're doing is vague hand waving and saying there's no fee, but you haven't actually shown the data.

Again, that's why it's important to know the actual individual data points instead of just the end results as calculated by you. Again, you don't have to reveal that if you don't want to reveal your privacy. Again, that means that other people are not able to verify your methodology, are not able to know whether you messed up your calculations or not.


Yup. It lends credence to the possibility that MC might be doing this.


Again, not all data is quantitative.

I've shown empirical qualitative data in the form of the statements of the financial institutions. Empirical means verifiable by empirical methods. You can see the documents that I linked to. You can contact institutions like Barclay or Chase and ask them about any fees they charge. That's all empirically verifiable data.

If anything, you're being inflammatory here by refusing to accept even a small possibility.

You seem to think that your results cannot possibly coexist with my hypothesis that there is a fee. That's wrong. My hypothesis not only explains your data but also explains the existence of those documents and statements from the financial institutions. It has more explanatory power than what you've said.

Kremmen

If we want to have comparable data, it makes sense to compare to one standard source. xe.com is easy to use and a de facto standard. MC is neither. People commonly use xe.com for comparison to other rates from money changers or banks, therefore it makes sense to use it here.

I was trying to be civil, but as you wish to try to push the point, the use of "actually" and "now" in the sentence imply that you don't think I was providing data previously. That is way beyond inflammatory.

None of my data has been interpreted through a lens that is faulty. (Again, just an ad hominem attack from you.) If you don't like me using XE, then make a massive comparison between the site you like and xe.com and apply your fudge factor to all my results. Over a large enough data set, individual data points aren't necessary.

Fine. You stated it. No need for pages and pages of follow-up.

Phantom707

I'm not saying xe.com isn't good. I'm saying the more tools we have available (including the MC tool), the better. I don't think more tools can hurt us in trying to figure this out.

It's also especially relevant given I've been saying MC publishes lower exchange rates and then tack on a fee that gets passed on to customers. It would not be possible to test that claim without knowing MC's published rates.

By definition, communication is inter-subjective. It's a involves both how you interpret things as well as what I meant. It saddens me that that's how you felt about what I said, but that is not what I meant. Also, I think it was still reasonable for me to phrase it that way because I was trying to emphasize that particular post, not the thread as a whole.

It's not an ad hominem when I'm giving a reason as to why it could be considered faulty.

I was specifically saying if all that you're using is the xe.com rate (which you seem to be; correct me if I'm wrong), then that misses out on the fact that I'm not talking about the xe.com rate. I'm talking about MasterCard's rates, and those don't necessarily follow the xe.com rates. That's what I meant by faulty.

I'm saying that xe.com should be used together with other tools to test out whether MasterCard does tack on a fee.

You say over a large enough data set, individual data points aren't necessary. But that begs the question of what you're examining. If you're just examining the xe.com rate, then yeah, it's completely fine. But that's not the only issue here. The issue is also whether MC has a hidden fee.


I was trying to engage you a conversation, and I made replies to your replies. I don't think there's necessarily a problem with that considering we're all here to try to get more information.

But fine. I'm out. I won't talk about this anymore.

Kremmen

xe.com claims to give an average inter-bank rate. If I'm comparing using cash at a money changer to travellers cheques from Amex to Visa, MC and Amex credit cards, I'm going to use a base point like xe.com. One might want to use MC and Visa's web sites to compare whether cards of that brand are reliably using their rates, but it doesn't make sense to use them in any other way.

The essential problem I have with your point is that it's a massive digression at best. The definition of a fee to me is something that is actually charged. If there's a MC "fee" and a counteracting rate, then there really is no fee. If Amex sells me travellers cheques and waives the fee, I don't care how big the fee is that I didn't actually pay. If I buy something that costs, at xe's mid-rate, USD100, I want to be able to make a decent value judgement as to which payment method to use. In the past, that would have been travellers cheques in some places/times and cash in others and credit cards in others. Now, it will almost certainly be a credit card, but depends on bonus rewards points, credit card surcharges, credit card minimums, etc.

Phantom707

Okay, yes, someone might want to use MC's website to compare whether cards of that network are reliably using that rate. That's the issue that I've talking about all this time.

Okay, you want to have practical implications of what we're talking about. That's a fair enough point. But what I don't think what I said was a digression.

The ideal situation would be to find a bank that both uses MC's regularly lower rates and doesn't pass on the ~1% fee. That's entirely possible to find, but it would be more difficult to find without knowing which cards do what.

photaco

Don't you think that the existence of a hypothetical bank that advertises no foreign transaction fee and charges 1.1% less than every other MasterCard-issuing bank in the country that advertises no foreign transaction fee makes those other banks practicing illegal hidden fees?

I've never heard of a MasterCard that doesn't charge in line with https://www.mastercard.com/global/currencyconversion/