Credit card Foreign exchange charges

[paulod]

Hi Guys, new to this but here goes.

I have been searching for the best deal on C/card transactions and was told about the "no fee" 28 degrees card...sounded good.
Yesterday I did a comparison on what 28's exchange rate ( see XE dot com these are the rates they use) and my old Westpac card. Even with the 3% that Westpac charge they were slightly cheaper, but not by much. So it seems that the 28 degrees no fee is smoke and mirrors and they us a higher exchange rate. So I might as well stick with Westpac and at least get FF points for my purchases.

Has anyone else done this exercise or have a suggestion for a no/low fee card?

Thanks

 

[travelislife]

I have done like for like transactions out of the same ATM with the 28degreescard and a commonwealth card. On a withdrawal of $200 USD the difference was substantial. Just off the top of my head it was something like $198 to $212 including the added $5 withdrawal fee.

 

[paulod]

That's a big difference. I haven't tried it with withdrawing cash. My main interest is for overseas purchases.

 

[travelislife]

How are you comparing transactions? Is the difference 3%? You then have to figure out what you value of a point is with what you are using them on and if 3 cents a point is viable for you, it is getting up there in the buy stakes.

 

[paulod]

What I am saying is there is almost no difference. Even with Westpac charging 3% the price is almost the same as W are working off a better exchange rate. So although 28 degrees is not charging you a fee it is instead using a higher exchange rate (this is where they make their money) So paying the same with Westpac.....the points are a bonus.

 

[travelislife]

I understand but how are you comparing the rates? Same day transaction on both cards?

 

[clifford]

I always use my ANZ Platinum Visa card when using an ATM overseas.

No fees and competitive exchange rates (and "free" travel insurance).

 

[serfty]

Clifford, you have got to be kidding!

I have an ANZ platinum Visa and religiously avoid using it at all overseas due to the ordinary exchange rate, let alone the ATM cash fee ($4).
Posted on a wing and a prayer ...

 

[serfty]

What I am saying is there is almost no difference. Even with Westpac charging 3% the price is almost the same as W are working off a better exchange rate. So although 28 degrees is not charging you a fee it is instead using a higher exchange rate (this is where they make their money) So paying the same with Westpac.....the points are a bonus.

Where have you checked this out? I have done many tests and the exchange rate used by 28° has always been very close to the prevailing cross rate.

There are many examples confirming this posted on this forum.

Posted on a wing and a prayer ...

 

[DeKa]

I only use my 28 Deg for purchases, but have compared it a number of times to transactions on other cards. Every time 28 Deg comes out using less AUD for the same foreign tranaction purchase value, THEN the other cards add 2-3% depending on the card as a separate line item for foreign currency conversion fee.

Are you sure you're not missing the extra line item which is the fee?

 

[JohnK]

I have given up using Amex and Amex MR points for overseas transactions.

I have been using 28 Degrees recently and the amount is much better even before the 3.5% commission is factored into other credit cards. Stick with 28 degrees if you want to save money and not worry about some expensive MR points.

By the way I have not used the card for overseas withdrawals yet as I do not want to load the card up with $2,000-$3,000AUD in it before I go overseas. I can get exchange rates just as good if shopping around in Thailand.

 

[serfty]

Clifford, you have got to be kidding!

I have an ANZ platinum Visa and religiously avoid using it at all overseas due to the ordinary exchange rate used, the "forex" fee chagred on top of that. With the ATM fee ($4) I never use it for cash..
Posted on a wing and a prayer ...

More on this.

Using the ANZ web site, Exchange rate: AUD 1 = USD 1.0001, UD1000=AUD 999.90

The current cross rate from xe.com is

1,000.00 USD

=

959.948 AUD

 

[Doug_Westcott]

The actual exchange rates used for credit cards are set by Visa, MasterCard, AMEX (at the day the transaction is processed by the merchant/ATM) not by the Australian bank when processed to your credit card account here.

 

[extracta]

More on this.

Using the ANZ web site, Exchange rate: AUD 1 = USD 1.0001, UD1000=AUD 999.90

The current cross rate from xe.com is

1,000.00 USD

=

959.948 AUD

I avoid using my ANZ credit card overseas like the plague. The fees and fx rate they charge are the main reason I went in search of a CC that was much better value.

In the end I settled with the 28 degree mastercard and have been very happy with it since.

I do ensure that I keep the card in the black and if I make a purchase I top it up that day.

This is also the case for cash withdrawals overseas. I will either ensure there is enough money in the account before withdrawal, or I will Bpay money into the account on the same day that I make the withdrawal.

The only fees I have been charged on this account so far have been 50c for the first statement (I now use electronic statements) and the ATM's charge you when you make a withdrawal ($4-$5)

 

[MEL_Traveller]

Hi Guys, new to this but here goes.

I have been searching for the best deal on C/card transactions and was told about the "no fee" 28 degrees card...sounded good.
Yesterday I did a comparison on what 28's exchange rate ( see XE dot com these are the rates they use) and my old Westpac card. Even with the 3% that Westpac charge they were slightly cheaper, but not by much. So it seems that the 28 degrees no fee is smoke and mirrors and they us a higher exchange rate. So I might as well stick with Westpac and at least get FF points for my purchases.

Has anyone else done this exercise or have a suggestion for a no/low fee card?

Thanks

It would be really helpful to see a couple of transactions as an example.

Wesppac used to have a competitive card - Earth - but they eventually moved to a fee based system as well and the difference was substantial.

My ANZ platinum also levies hefty fees so I can't use that.

I would be interested if Westpac could be competitive...

 

[Alanslegal]

So it seems that the 28 degrees no fee is smoke and mirrors and they us a higher exchange rate. So I might as well stick with Westpac and at least get FF points for my purchases.

Has anyone else done this exercise or have a suggestion for a no/low fee card?

Welcome to AFF.

Stick to the 28 degrees card, believe me (and believe the many frequent fliers here) that this is the top card for overseas / foreign transactions. Most of my rates have been close to the forex rate of the day.

I believe in your sample, the currency can fluctuate by a 1-2 cents / USD in the space of a few days and depending on the when the merchant actually process the funds, that could determine your rate. So if you may purchase something today (current rate say $1.05/usd) but it doesn't transact until four days later (where the rate could be $1.025/usd) and thus you feel like you are being taken for a ride.

I have had this card for 7-8 years now (use to be the Wizard Clear Advantage) and no other card comes close from a pure foreign exchange point of view.

 

[AdMEL]

More on this.

Using the ANZ web site, Exchange rate: AUD 1 = USD 1.0001, UD1000=AUD 999.90

The current cross rate from xe.com is

1,000.00 USD

=

959.948 AUD

IME, the rate applicable to credit cards is better than the standard exchange rate for the Banks, at least for Westpac.

 

[travelislife]

I think the big thing is that the rate difference can be less than three percent but it is the extra line item where a percentage of the transaction cost is charged for the privilege of you using your card with a foreign currency, which the 28degree product does not charge. Correct me if I am wrong here.

 

[Cynicor]

Just another reply to those confirming that nothing beats the 28 degrees card. I have cards from ANZ, Credit Union/Cuscal, Amex, Citi, Westpac and CBA. The only card that offers a rate comparable to the XE.com rate is the 28 degrees. The Citi plus fee free card is close, but as it uses the previous day's rate it may show a higher margin depending on how much the currency has moved overnight.

Not sure how you ran your tests, but they were definitely flawed in some way.

 

[serfty]

Thanks for reminding me - here's a recent purchase of some NZ duty free using a WestPac card:

12 Apr 2012	FOREIGN TRANSACTION FEE	3.21
12 Apr 2012	10/04/12 114.72 NZD
12 Apr 2012	DUTY FREE STORES NATIO SEAVIEW NZ	91.64

So, a net cost of $94.85 of which I'll only earn points on $91.64.

That's and effective exchange rate of .8268 where the mid market rate for that day (according to xe.com) was .7921, a effective arbitrage of 4.4%.

This was calculated using XE.com - Credit Card Charge Calculator

Credit Card Charges Calculator

This report was generated by the Credit Card Charges Calculator ™

Credit Card Charges Results Print
Date on transaction receipt:	April 12, 2012
Amount on transaction receipt:	114.72 NZD
Mid-market rate for NZD to AUD on 2012.04.12: (Excluding bank charges)	0.792077
Value of transaction in your currency: (Excluding bank charges)	90.87 AUD
Amount shown on credit card statement:	94.85 AUD
Your "hidden" fee estimate:	0.00 AUD ( 0.000% )
ACTUAL BANK FEES for this purchase:	3.98 AUD ( 4.383% )
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Note: The above fee calculation is based on mid-market rates for the date in question. The fee results are estimated and may vary slightly.