Best card for foreign exchange?
Sep 25, 2011, 7:45 am
#2026
Join Date: Oct 2009
Posts: 210
my ihg chase card is giving me very good exchange rates lately, and no charges. maybe it has just been the timing, but chase seems to be more generous than i was expecting
Sep 25, 2011, 8:17 am
#2027
Join Date: Sep 2011
Location: Los Angeles
Posts: 243
It's been best for me to either carry cash to exchange for foreign cash, or withdraw cash from an ATM once you arrive in the country you are visiting. The exchange rate +bank fee at the ATM seems to be a better rate than the exchange kiosk at the airport. Credit card acceptance isn't a great abroad as it is in the states, so, yes, you need some cash.
You may also find that some foreign merchants, even though they accept cards with your logo, will not accept your card because it is a 'swipe' card rather than 'chip & pin' as is now the standard in Europe and some other places. While they can still use your card, sometimes they think they cannot and are not willing to try. Also, many vending machines do not accept swipe cards at all. This is important to remember when paying for parking or automated train ticket kiosks.
I travel with AMEX Platinum, and a Suntrust Delta World MC debit. The AMEX doesn't have any foreign transaction fees.
You may also find that some foreign merchants, even though they accept cards with your logo, will not accept your card because it is a 'swipe' card rather than 'chip & pin' as is now the standard in Europe and some other places. While they can still use your card, sometimes they think they cannot and are not willing to try. Also, many vending machines do not accept swipe cards at all. This is important to remember when paying for parking or automated train ticket kiosks.
I travel with AMEX Platinum, and a Suntrust Delta World MC debit. The AMEX doesn't have any foreign transaction fees.
Sep 26, 2011, 10:34 am
#2028
Join Date: Jan 2003
Location: NYC
Posts: 8,498
In my and my friends' tests of various cars overseas, there has been almost no variation between the underlying rates charged by different banks using the same network. Most seem to rely on the Visa/MC/Amex networks to do the conversion (rather than the banks or card issuers themselves doing the conversion) and rates tend not to vary much even between the different networks. Our most recent head-to-head comparisons suggested that Citigold products (using Mastercard/Cirrus) beat various Visa/Plus products (TD Bank, Schwab, etc.) slightly, but we're talking fractions of a percent and I'm not sure that you can replicate the result from one day to the next or from one country to the next.
Sep 26, 2011, 11:58 am
#2029
Join Date: Jun 1999
Location: Rio de Janeiro, BRAZIL
Programs: AA 4MM EXP; Starwood Lifetime Plt
Posts: 2,498
...Our most recent head-to-head comparisons suggested that Citigold products (using Mastercard/Cirrus) beat various Visa/Plus products (TD Bank, Schwab, etc.) slightly, but we're talking fractions of a percent and I'm not sure that you can replicate the result from one day to the next or from one country to the next.
Sep 26, 2011, 1:06 pm
#2030
Join Date: Feb 2011
Programs: All of them
Posts: 214
Just by way curiosity I tried my AMEX Platinum. On Sept. 16 2011 (there is only one date on the AMEX site, not a purchase date and and posting date) EUR 149.85 was converted to USD 208.88, implying a rate of 1.394. According to xe.com, the rate for that date (at noon) was 1.378, so the AMEX rate seems to include a surcharge of 1.16%. Any other experiences? With this sort of conversion, I'm more likely to stick to VISA than try AMEX again.
Sep 26, 2011, 1:22 pm
#2031
Join Date: Sep 2009
Posts: 5,051
That thought crossed my mind, too. Banks love to play these games.
Sep 26, 2011, 1:30 pm
#2032
Moderator
Join Date: Jun 2003
Location: Miami, Mpls & London
Programs: AA & Marriott Perpetual Platinum; DL & HH Gold
Posts: 48,958
No. Until a few years ago no US-based bank itemized foreign exchange fees, they were hidden in the exchange rate. As the result of a successful class -action suit these hidden fees were repaid to cardholders, and the issuers agreed to itemize the fees. Consumers are new sensitized to these expenses, and reducing or eliminating them has become a competitive strategy. As a practical matter the exchange rates are determined by the processing networks (American Express, Discover, MasterCard and VISA), not by the individual banks which issue cards (except in the special case of American Express and Discover which are both network operators and card issuers.)
Sep 26, 2011, 1:33 pm
#2033
Join Date: Sep 2009
Posts: 5,051
Like a balloon though, squeeze it in one place and air displaces where it can. So it goes with bank charges.
Sep 26, 2011, 2:28 pm
#2034
Join Date: Feb 2011
Programs: All of them
Posts: 214
Then I guess the 1.16% discrepancy that ajnaro noticed was due to the processing network's spread on their buy/sell prices rather than the bank taking a cut. This basically means there's no escaping the fact that you get charged a premium when you change currencies; if not by the card issuers then it's by the processing networks. Would this be an accurate assessment?
Sep 26, 2011, 2:30 pm
#2035
Moderator
Join Date: Jun 2003
Location: Miami, Mpls & London
Programs: AA & Marriott Perpetual Platinum; DL & HH Gold
Posts: 48,958
Sep 26, 2011, 5:14 pm
#2036
Join Date: Dec 2010
Posts: 223
In planning for a trip to Tokyo, it can be assumed that Hotels will still take a credit card even if they aren't branded (IE Hyatt, Hilton). Basically I'm planning on staying at some resorts around some amusement parks and I'd assume I wouldn't need the bulk amount of cash for that?
One way to be sure your lodging is taken care of would be to prepay on the hotels American website or on their US based reservation hotline. Most major hotels can do this and charge you in dollars, eliminating an exchange rate issue.
Japan is also a country with a vending machine for just about anything, and some vending machines no longer accept swipe transaction.
As for AMEX Platinum, no transaction fees is an advertised benefit, and they revalue the currency exchanges daily, but I can't recall what index they use.
Sep 26, 2011, 7:42 pm
#2037
Join Date: Jun 1999
Location: Rio de Janeiro, BRAZIL
Programs: AA 4MM EXP; Starwood Lifetime Plt
Posts: 2,498
Then I guess the 1.16% discrepancy that ajnaro noticed was due to the processing network's spread on their buy/sell prices rather than the bank taking a cut. This basically means there's no escaping the fact that you get charged a premium when you change currencies; if not by the card issuers then it's by the processing networks. Would this be an accurate assessment?
Sep 27, 2011, 10:22 am
#2038
Join Date: Jan 2003
Location: NYC
Posts: 8,498
I think it's just that AMEX charges a more unfavorable rate than other issuers or networks. In years of using the ex-Schwab VISA I never found any significant difference between their rate and xe.com rates. In fact, the ex-Schwab VISA rate was often better than the xe.com rate. If anyone has evidence to the contrary about AMEX, I would love to hear about it.
I can say that the various Visa and MC cards I've tried overseas all seem to get great rates most of the time. Things can vary (I once had two charges made in Budapest on the same day come through at very different rates on my CapitalOne card, presumably because they posted a couple days apart and there was a lot of market volatility). But generally speaking, the cards I have that say they have no foreign transaction fees get rates that fall within the Bloomberg spread for the day on which they post.
Sep 27, 2011, 10:32 am
#2039
Join Date: Feb 1999
Location: Denver CO
Posts: 3,682
No. Until a few years ago no US-based bank itemized foreign exchange fees, they were hidden in the exchange rate. As the result of a successful class -action suit these hidden fees were repaid to cardholders, and the issuers agreed to itemize the fees. Consumers are new sensitized to these expenses, and reducing or eliminating them has become a competitive strategy. As a practical matter the exchange rates are determined by the processing networks (American Express, Discover, MasterCard and VISA), not by the individual banks which issue cards (except in the special case of American Express and Discover which are both network operators and card issuers.)
Sep 28, 2011, 5:04 am
#2040
Join Date: Sep 1999
Location: too far from the airport
Posts: 3,298
Just a single data point: I used the Chase Sapphire UR Visa for a forex transaction today, and I received a rate that was roughly 1.30% higher than xe.com. This will result in an extra $2 expense for me, so I'm not going to worry too much about it, but in the future I'll either use Schwab, as long as terms haven't changed, or (gasp!) Cap1, as I never noticed such a high discrepancy with other no fee card before.