Here’s a new twist. I went to a Citibank ATM in Rio de Janeiro on Monday 05/22/2006 and made two withdrawals of identical amounts of R$ 50.00 in Brazilian currency. I made the two transactions one after the next on the same ATM. One withdrawal was from an account in Citibank NY, using a MasterCard debit card issued by Citibank, and the other was from Bank of Internet (BOFI), using a VISA debit card issued by that bank. For the Citibank withdrawal the ATM printed out an exchange rate of R$ 2.27 to US$ 1.00 and a dollar equivalent of US$ 21.98. But on my statement the total of US$ 21.98 appeared as $21.76 plus a ‘foreign fee’ of $ 0.22. Thus, the exchange rate printed by the ATM already included a 1% fee and the underlying exchange rate actually used was R$ 2.30 to $US 1.00

For the BOFI withdrawal from the same ATM the exchange rate printed was US$ 2.19, less favorable for a conversion from US dollars to Brazilian reais. On top of that Citibank charged a R$ 6.00 convenience fee for the BOFI withdrawal, amounting to US$ 2.64 by its own exchange rate. The total in dollars for BOFI was printed as US$ 25.55, a difference of US$ 3.57 (16.2%). In principle, BOFI should refund the convenience fee, but even so the cost of the withdrawal from the BOFI account would be US$ 22.91, US$ 0.93 more than the withdrawal from Citibank (4.2%).

According to oanda.com, the interbank rate for 05/22 was R$ 2.20 / US$ 1.00, very close to the rate used for the BOFI withdrawal. As hard to believe as it may be, Citibank actually used a rate more favorable than the interbank rate for a withdrawal from its own account, even taking into account the 1% fee.

Neither Citibank Brasil nor Citibank NY could explain why the ATM used different exchange rates for the two successive transactions involving the same currencies.

The moral of this seems to be: use Citibank ATMs outside of the US if you happen to have a Citibank account. If you have a card from some other bank, it might be best to avoid Citibank.

The mystery deepens: I made two charges, one after the other, in a Brazilian supermarket on the same day 05/22/06 as the above mentioned ATM transactions. One was with Diners Club / MasterCard and the other CapitalOne “Go Cash” Visa. Both are credit cards. The exchange rates used were (calculated by dividing the amount of the charge in Brazilian reais by the dollar amount on the credit card statement):

Diners Club / MC R$ 2.20 to US$ 1.00
CapitalOne Visa R$ 2.29 to US$ 1.00

Both of these charges posted on the same day as the charges were made. Of course, Diners will add a 3% fee later on, effectively reducing their rate to R$ 2.14, for a difference of around 7%. CapitalOne will eventually rebate 1%, but Diners will give miles or points, so that may come out even.

Does anyone know why MasterCard and Visa could have different rates for charges made at the same time and the same place?

No magic here. First, as you note later, MC and Visa do have different exchange rates. The currency market isn't really like the stock market where everyone sort of agrees what the current price is. The currency market is a lot more dispersed, and depending on who you ask, you may get a different price. IME they're usually pretty similar, but a small fluctation is certainly not uncommon.

Second, I would guess that your Citi debit and BofI debit transactions posted on different days. 5/22 rate was 2.20, 5/23 rate was 2.26. Why does one post a day later even though it's an internal ATM? Who knows. It just happens that way.

RE: Citi, the exchange rate number they quote you should be with 0% commission. Then they tack on the 1% that you saw. This is if you use a Citi ATM. If you use a non-Citi ATM, they'll tack on 2%.

Two comments based IME with Citibank ATM based in USA in Chile and Argentina.

I believe the exchange rate charged is literally real time during regular market hours.

Citibank Chile/Argentina/USA are separate operations for ATM use purposes and thus the NEW 1% FOREIGN FEE is still charged when using a foreign Citibank ATM.

So based on my experience in Chile,

The exchange fee is usually about 1.2% from the real time xe.com quote and like Citibank, bundled into the total dollar debit from your account.

The new exchange fee, like Citibank, is listed separately and based on an exact 1% of the first dollar charge.

B@stardos!!

Just a little clarification:

--All of the transactions I mentioned (two at a Citibank ATM; two at a near-by supermarket) were made and also posted on 05/22.

--Citibank NY did not charge an EXTRA 1% above the dollar amount printed out by the Citibank BRASIL ATM. Rather they broke it into two components: 99% listed as a withdrawal and 1% listed as a 'fee'.

--Basically there seem to be two exchange rates in the four transactions: 2.20 (the oanda.com rate) and 2.30, but they don't correlate with anything I can see.

Actually it is like the stock market, in that if there is any difference in the rate that 2 currency dealers are willing to offer a currency then there is an arbitrage opportunity for risk free profits which would be substantial since currency trades can be leveraged up to 200:1 in some cases. If you can buy a U.S. dollar for .79 euros from dealer A and sell it for .80 euros to dealer B, you just made an instant profit. Any difference in currency rates between dealers, even to the .0001 of a cent are quickly (microseconds) rectified. There would certainly never be a difference as large as a percent between dealers. The difference could be between the realtime quote at 1022 GMT when you made the transaction and the end of the day snapshot that Oanda quotes.

Sandra Block has been doing some research too.
http://www.usatoday.com/money/perfi/...exchange_x.htm

That's an excellent chart accompanying her article. Guess it's time to dig out my Capital One card on my next overseas trip...

It's a very limited chart compared to the one we've compiled here:

http://www.flyertalk.com/wiki/index....hange#The_List

It appears to be mostly consistent with our information, however.

Has anyone been able to get 0% fees from State Farm when using foreign ATMs for withdrawals?

Also, you mentioned several times that ATMs in Europe do not charge their own fees. Is that true for Eastern Europe (Romania) as well?

Thanks.

I have a State Farm ATM card that handles transactions at the bank rate. Used it several times in Australia last week. They also rebate up to $1.50 for ATM use, with a $7.50 cap per mopnth. I went to them after my last bank went to a program of $1.25 fee plus 2% for foreign ATM use. I'm out of the country several months a year and that wasn't going to work.

I also have a State Farm VISA that I use outside the U.S. It adds a 1% conversion fee, but then the account gets a 1% rebate, so I break even.

I've had both over a year now.

Welcome to FlyerTalk

I just called to check my GM World Mastercard (HSBC). It passes on the 1% V/MC fee and adds an additional 2% fee. Robbery!

My MNBA Quantum MC only charges the 1% V/MC fee.

Just called on my parent's Ducks Unlimited MBNA Visa and as of July 3, 2006 they will start charging the 1% + 2%. Robbery!

Just called to reconfirm my Capital One rate...still 0% Hurray still for Cap One.

I will also confirm Commerce bank ATM withdrawals in China.. used a Citibank ATM at PVG w/o problems. Received great exchange rates in both China and Sweden! ^^

OTOH, I had to use my Chase check card in China (b/c the merchant would not take Amex) and got dinged with a 3.5% fee! Dirtbags! Never use Chase for anything overseas -- credit or ATM!