Thanks for the clarification.

Too bad they were giving out really small credit lines - and this was *before* the meltdown! :p

Ok, I'll bite.

The Schwab debit card is great. As I posted earlier you can do slightly better sometimes by doing a cash advance at the counter vs an ATM withdrawal because of the way currency rates for conversion are calculated.

What you haven't figured in is that Visa (also MC) assess a 1% fee on foreign currency transactions which is on top of whatever fee the issuing bank assesses. There are only two banks that I know of that rebate that fee resulting in no currency transaction fee at all and the only one that earns points is Barclay's. So when you're charging in a foreign currency your net rebate with Schwab is 1% (2% less the 1% forex fee) vs 1 mi/$ with Barclays.

I guess it depends on how you value your rebate. Cash is simple and easily spent, but a penny a point is not a bad rate for Lufthansa miles.

My take would be if you travel internationally only moderately then go Schwab but if you travel a lot and you already have a strong relationship with LH then you might consider the Barclay's.

Since LH provides better access to availability than say UA (which blocks using Starnet) and opens seats at 365 days rather than 330 M&M miles get access to much better availability. The downside is that redemption levels are higher as are fees.

Still if you like traveling F you're going to do a lot better charging $150k on Barclay's than on Schwab since you can't buy an F ticket for $1,500 (which is your net rebate in forex).

Maybe you are grandfathered under different terms. The current Barclay's M&M cards do not have these benefits:
The terms indicate a 1% forex fee. Also, counter cash advances are subject to a 3% cash advance fee plus immediate interest.
https://www.barclaycardus.com/apply/...0&cellNumber=6

BankDirect and Citibank Gold do not charge any exchange fees when used overseas as a signature vs pin cards

Darn. Looks like they've changed it. I'll see if I'm grandfathered. Checked before the last trip in Jan and they confirmed 0%.

I was referring to debit cards, not credit cards, for the counter cash advance. Visa/MC rules require all banks displaying their logo to offer these with no fees and at the wholesale rate. Depending on the ATM and banking system this can be substantially better. Best is that if you don't get the correct rate you can complain when you get home and they have to fix it. Good for large amounts at the beginning of a trip.

Another good thing about the Schwab card is that if you lose the debit card while abroad they will send you $1500 via Western Union for no fee. I have had the unfortunate reason to have to test this issue this week, and Schwab has been MUCH easier (and cheaper) to deal with than my UK bank, HSBC who charge $50 for a transfer.

Ah, okay, I see now.

I'm going to take a look at Schwab, as I need another good debit card for my international exchanges.

Two further notes.

While any debit card is a great deal for getting cash abroad if you use a counter cash advance not all are equally easy to use. For example some cards have a daily limit, which can be a problem because when I get someplace and find a bank that will do a counter transaction I like to get all the cash I'm going to need at once.

Also if you ever need to do a really big cash draw (like to pay for the rental of a house for a month like I did or say for an emergency) a daily limit can ruin your whole day. I'm not sure what the Schwab limit is but I've never hit it and I've done cash advances in excess of $5,000 at a time (which figuring your saving about 1-2% on the foreign spread adds up to at least a nice dinner out).

As for credit cards one needs to be careful when saying a card has no forex fee because it isn't always clear what that means.

The best cards are those (like the old Barclay's) that not only didn't charge a foreign currency fee for the bank but rebated the 1% that Visa/MC assessed. I think of those as truly no fee. Next best are those that have no bank fee but do pass through the 1%. The banks call those no fee, but of course they really are 1%.

Now not to confuse matters even more, but even true no fee cards aren't really no fee anymore. The reason is that the banks and Visa/MC used to obligate themselves to use the actual exchange rate they received as the rate of exchange (it was even more complicated but this was the effect). That is no longer true. The rate is just a rate they say they use now and is not the rate they actually trade at (they won't even tell you how they get it). So even when you are using a "true" no fee card you are almost certainly paying a fee because the rate the system is giving you isn't necessarily the rate they exchanged at.

An amusing story from when they used to play it straight was a trip I took to Israel many years ago. Amex computed the forex rate based on the day of the transaction while Visa on the date it hit their system. In those days the system was still paper and it often took a couple of day or more for a transaction to make its way to the local bank and days more until they processed it with the result that charges often showed up with a posting date a week to two weeks after the actual charge. Well Israel was going through hyperinflation (prices everywhere were written on chaulk boards and changed hourly) so the upshot was that a week or two delay turned into a substantial discount. I can't remember the exact amount but it could easily have been 10-25%.

what are you basing this on? using your logic, most other us mc and visa cards would be surcharging 4% forex rather than the 3% they publish in their ts & cs.

every controlled test we've done here on the board points to schwab being 0% (including my own shoot-out between my schwab visa, citibank chairman amex and cap one visas that you can find detailed in the previous posts in this thread).

can you provide some proof that schwab and cap one are passing through the 1%?

I haven't read the 115 pages here but I have never even thought about this issue! My small town banks in Iowa never charge me any fees other than the 1% imposed by visa/mastercard. Perhaps stay away from the big banks??

Back during the Asian currency crisis the rates were all over the place too. However the credit card companies and the merchants had a trick up their sleeves. They would wait days, or weeks or even months before officially posting the transaction. People here on Flyertalk were hopping mad and talking about lawsuits, but it turns out there is some fine print in the agreement we sign that allows them to do this.

Used Capital One for foreign transactions with no extra charge. Exchange rates should be more less the same with any CC company.

Well if the banks say they are charging 3% then the total forex rate is 4%. Or at least that is the way it was when I read the rules the last time, but the disclosures might have changed with the recent legislation.

Where I get it is that there are two layers of charges. The Visa/MC 1% is generally disclosed in the boilerplate of the agreement while the banks fee is called both there and in the disclosure table.

Again, this might have changed in the last few weeks/month but this is the way it used to be. The fees came from two separate entities (the clearing system ie Visa/MC) and the bank so they showed up in different places.

BTW this was not the case with Amex because they have their own clearing system. The rate they disclose was the total rate.

While it looks like Barclays has changed their fees, at least for new accounts, they went out of their way to disclose the 1% MC fee is the boilerplate and then went on to say they rebated it. This makes sense because they can't eliminate the fee as they don't assess it but can only give it back to you.

Bottom line I guess is you need to read your complete cardholder agreement and see what the total fees are. Even then it is best to call and check. I have a BA Amex from Chase that is grandfathered with 0% bank fee and when I called they gave me incorrect information. It was only after I persisted and asked the to check my individual account, not the general rules, did they confirm I was still on the 0% plan. Likewise when one of my cards increased its fee I never got a notice and I read those things. Good thing I called before a trip where I did a lot of charging.

When I get a chance I'll review the agreements on my card and see if the disclosure rules have changed so that the forex fee in the chart is now the total fee or still only the bank fee and post what I find out.

As for your question regarding proof I'd say review the entire agreement and see what it says regarding the Visa fee. As I said all banks pass it through except for the very few who rebate it.

This hasn't been the case for some time. After the lawsuits, credit card companies started listing the total percentage forex fee in the terms.
Now, 0% is 0%, 1% is 1%, 3% is 3%, etc.