Amex Foreign Currency Exchange Rates

[JohnK]

I have been monitoring the exchange rates used by Amex on my overseas transactions and I am unable to reconcile the exchange rates used. I have been using a number of websites, xe, oanda, quoting interbank rates and the Amex exchange rate before the 2.5% commission is very low.

I stayed at HI Christchurch on 11/11/07 and checked out the next day paying NZ$159 for the night. The transaction has just hit my credit card and it has converted to A$137.40 (exchange rate 1.1572) with a commission charge of $3.44 giving a total of $140.84.

According to the websites I have searched the exchange rate has not gone below 1.17370 in the past week. Can anyone really reconcile the exchange rates used by credit card companies?

In the past I have been able to get close to the exchange rate used by Amex and have not worried about it. Even though in this instance the difference is only $2 I am about to purchase airfares and accommodation and the difference could be around $50.

[futaris]

Not sure what the exchange rate is supposed to be. But just for comparison, the Europcar hire on 09 Nov was:

NZ$145.29 = AU$125.42

Take away the $3.06 comm fee, and it becomes AU$122.36. $3.06 is 2.5% of $122.36, so I think I worked it out right.

NZ$145.29/AU$122.36 gives a rate of NZ$1.1873/AU$1

Rate doesn't seem that bad...

[JohnK]

You dropped the car off on the afternoon of the 11th and I paid the hotel bill early morning on the 12th. The charge for the hotel hit my credit card sometime last night or this morning with a transaction date of 12/11/07. I assume your car hire would have hit your card yesterday or today.

There is clearly a difference on the exchange rate of 3 cents between your transaction and mine. Should I be concerned?

[futaris]

I wouldn't be concerned. I don't think exchange rates change over the weekend.

XE.com - Free Chart seems to confirm that there was a 2-3 cent drop over the weekend.

[serfty]

Having a series of good samples using, I did some analysis using XE.com - Credit Card Charges Calculator .

It seems the calculations are based on when the charge hits the card; not the transaction date.

e.g. The NZD50 departure tax for the two of us on the 11th was charged at AUS43.61, a 2.7% rate for the 12th Nov. If based on the 11th it would have been 4.41%.

There appears to be an variance of up to .5% with these calculations, due to differences in dates/time zones and commercial issues.

[JohnK]

e.g. The NZD50 departure tax for the two of us on the 11th was charged at AUS43.61, a 2.7% rate for the 12th Nov. If based on the 11th it would have been 4.41%.

There is something seriously wrong with the way Amex calculates foreign exchange rates!

Using the tool you provided and inputting the actual A$ amount charged I get a commission of 5.757% on the 11th Nov, 4.380% on the 12th Nov and 4.880% on the 13th Nov. I thought they are only supposed to charge 2.5% as reported on the statement.

Does this look right? What am I doing wrong and why is the commission so high? The transaction amount is clearly NZ$159 and the charge on credit card including commission is A$140.84!

[oz_mark]

Does this look right? What am I doing wrong and why is the commission so high? The transaction amount is clearly NZ$159 and the charge on credit card including commission is A$140.84!

JohnK, using your figures

NZ $159

AUD $137.40 of which $3.44 is commission (therefore AUD before commission=$133.96)

2.5% 0f 133.96 = $3.35 (so 9c out there, but never mind, hmm, it is actually 2.5% of $137.40 though - interesting)

Exchange rate - 159/133.96 = 1.1869

[JohnK]

Sorry, I should have been more clear.

The charge on the credit card statement is $137.40 plus a commission of $3.44 giving a total charge of $140.84!

[oz_mark]

Sorry, I should have been more clear.

The charge on the credit card statement is $137.40 plus a commission of $3.44 giving a total charge of $140.84!

Oh I see Ignore my ramblings then!

[futaris]

$137.40 / 40 = $3.44, which is 2.5%.