Currency exchange on my credit card questions

[mccannable]

Help me understand my citi card with "no foreign transaction fee". The conversion rates seem to be in their favor or the calculator I am using is wrong. Are they just hiding the fees in the conversion? is there a "more accurate exchange calculator? Is there always a fee to exchange?


Example:
Vatican tickets 40 Euro
Google exchange $43.73
Citi $44.28

[kscarrol]

If you noticed any of the currency exchange businesses in the airport, there is a rate at which they Buy and a rate at which they Sell. That spread is how they make money and the same applies to Citi. Yes, they might be making a little bit on the exchange rate but the difference is likely driven by this spread.

[mccannable]

That's what I was starting to assume. I just assumed when they said "no exchange fee" they really meant no fees. Oh well




And wrong forum. Not sure how I did that.

[STOOF]

They have their own rates. You arent going to get current market rates.

The "no foreign transaction fees" refers to the 3% transaction fee some other cards charge. Thats 3% of the USD amount after conversion.

[Flying Ace]

Originally Posted by STOOF

They have their own rates. You arent going to get current market rates.

The "no foreign transaction fees" refers to the 3% transaction fee some other cards charge. Thats 3% of the USD amount after conversion.

this.

"foreign transaction fees" is the fixed fee credit cards put on these transactions ON TOP OF the spread. You'll find the best spreads are offered by travel credit cards though, they are usually less than 1% spread on the prevailing FX rate that date.

The worst spreads are often offered by actual hard currency changers. The people at the airport or the bank teller. You get raped on those spreads. I have never ever exchanged money with a teller

Pro Tip, if you absolutely need hard currency on your travels, get a Charles Schwab online checking account. They give you a ATM card that's good at international ATMs. They reimburse all ATM fees and they give you the 1% or less spread.

The 2nd best options are opening up an account with Citibank or HSBC. Those are international banks with international ATM locations.

Sorry there's no way around the spread, people gotta eat!

[omgboost]

I just came back from Canada in which I withdrew money and put charges on my credit cards. The currency exchange rate varies day to day and whether it is VISA or Mastercard. Mastercard generally has the better rates but my bank uses a VISA debit card but I do have both VISA and Mastercard credit cards with no foreign transaction fees. VISA and Mastercard does earn a little money from the foreign transaction as they are the one taking on the risk and exchanging it for you. You pay for this premium. I find that their rate is much better than the ones you get in person and you don't have to go through the hassle of running around town trying to find the best rate.

Use these sites to find the rate you'll be getting in the past and present, depending on your card issuer:
https://usa.visa.com/support/consume...alculator.html
https://www.mastercard.com/global/currencyconversion/