I was in Vancouver in July and used three different cards to compare the exchange rates. All transactions are very small, except the two noted. I don't know whether the exchange rate is figured by transaction or posting date so I included both

Rate Transaction-Posting

American Express Delta SkyMiles

1.5094 19-22

Schwab Visa (attached to my Schwab One account)

1.5278 18-23
1.5287 18-23 - this was a cash advance for CAD 150 - I think there is a USD 1 fee included - this is how I usually get foreign currency
1.5302 18-23
1.5268 22-25
1.5286 22-25
1.5209 24-27
1.5192 24-27

Citibank AA Mastercard

1.4853 29-29

Sylvia

My understanding is that AMEX charges a 2% fee for foreigh exchange, but Citi AA charges 3%. This really ticks me off- especially since Citibank calls themselves "World" Mastercard.

A 2/3% fee for simply using your card abroad?!

Amex and I believe Diners Club add a 2% fee for foreign-currency transactions. Visa International and MasterCard International add a 1% fee. Supposedly, the exchange rate before the fees is the interbank exchange rate, which has no profit built into it. The fee is supposedly to cover the bank's overhead in conducting a multi-currency transaction. This is usually cheaper than paying cash, as you pay a fee when you convert your native currency to a foreign currency. Although you may think you're not paying a fee, it's built into the rate the exchanger gives you, and is probably more than the 1% or 2% rate charged above.

In addition, MC and Visa allow the card issuer to charge their own fee above and beyond the 1% fee charged by the associations. A few years ago, few banks added any additional fee. Now, it's common for MC and Visa issuers to charge 2% in addition to the basic 1% charge, although some banks charge only 1% or 0% more.

As far as anyone can tell, these additional fees are not to cover the expense of the transaction (which is already covered by the base 1% fee), but serve only as a profit center for the bank. This new fee, in addition to the greatly increased late and overlimit fees, is one of the things that we have to pay in return for most cards not having an annual fee. I remember 12 years or so ago when virtually every MC and Visa card had at least a $20 annual fee. Then AT&T Universal MC and Visa came out with no annual fee, and most issuers by now have switched over to a "no annual fee" program, except for those that earn miles or are targeted at the sub-prime credit market. The money that used to come in from annual fees has to be made up somewhere, and this is one of the places it comes from.

Thanks, SteveM. Appreciate the info.

With First USA linked to UA Mileage Plus, you only incur the 1% fee for foreign currency charges which is put on by VISA/MC. There is no additional fee, and to my knowledge, there is no cheaper way to charge overseas.

Anyone have an experience with the Citgo VISA, issued by Associates National Bank? According to its web site http://www.anbcards.com/citgo/external/citgo.htm
it offers a 1% rebate on monthly purchases, deducted in the same month the purchase is made. However, costumer service at Associates told me that the rebate was 2% on general purchases and 3% on Citgo gasoline. One representative said that the rebate amount, although calculated on the basis of all purchases, would be deducted only from purchases of Citgo gasoline while another said the rebate was given independently of Citgo purchases. One representative also told me that there was no surcharge for foreign purchases. Obviously, the representatives are not well informed. Anyone know how it really works? A 2% rebate, together with no foreign surcharge, would make this card 5% cheaper than Citibank, Chase, etc. If true, it�s a good deal!

The terms and conditions of the card you posted show a card with a 25 day grace period and variable interest rate at around 19.8%. It offers a 1% rebate capped at a rebate of up to $40 per month.

The card that CS may be referring to might have different terms and conditions.

I think at one time I had a card from them, but it was an oddball, so I never used it .. I think it had no grace period, but a super low interest rate, perhaps 7.99%? But with a card with no grace period, you pay interest on all purchases, even if you pay in full every month. This was several years ago, so I don't remember all the details.

-David


[This message has been edited by LIH Prem (edited 09-05-2001).]

The customer service number for the Citgo rebate card is 1-800-241-8356. I can't get a straight answer out of them, either about rebates or foreign transaction surcharges. Anyone else up to trying? Anyone actually have the card?

I've found the "Quantum" Master Card from MBNA to be the least expensive way to obtain foreign currency from an ATM machine when travelling abroad. The card has no annual fee and can be converted to a mileage earning card by paying an annual fee of $75