Currency conversion on Bankwest Qantas credit card

[Mattg]

I've been using a Bankwest Qantas Platinum credit card for most of my overseas transactions lately, since this card has no international transaction fees and earns Qantas points.

Yesterday, I happened to make two transactions in Euros around two minutes apart, for exactly the same amount (€30.60). For the first transacton, I used my Bankwest Qantas Platinum card and for the second my Virgin Money Velocity Flyer card - the latter of which has a 3% international transaction fee.

I assumed that my Virgin Money card would charge around $1.50 more (give or take) due to the 3% fee, but this was not the case. My Bankwest card converted the amount to AUD48.85 and the other card to AUD48.91.

I'm not aware of any major currency fluctuation that happened between making the two transactions, although I suppose that's possible.

Anyway, am I missing something or is the Bankwest "no forex fee" card not as good value as I thought?

 

[Pete98765432]

I've been using a Bankwest Qantas Platinum credit card for most of my overseas transactions lately, since this card has no international transaction fees and earns Qantas points.

Yesterday, I happened to make two transactions in Euros around two minutes apart, for exactly the same amount (€30.60). For the first transacton, I used my Bankwest Qantas Platinum card and for the second my Virgin Money Velocity Flyer card - the latter of which has a 3% international transaction fee.

I assumed that my Virgin Money card would charge around $1.50 more (give or take) due to the 3% fee, but this was not the case. My Bankwest card converted the amount to AUD48.85 and the other card to AUD48.91.

I'm not aware of any major currency fluctuation that happened between making the two transactions, although I suppose that's possible.

Anyway, am I missing something or is the Bankwest "no forex fee" card not as good value as I thought?

Is it possible that the Virgin Money card won’t add the conversion fee until the transaction is finalised (not pending)?

 

[SYD]

Is it possible that the Virgin Money card won’t add the conversion fee until the transaction is finalised (not pending)?

Or does it appear as a seperate charge?

 

[MEL_Traveller]

‘No foreign exchange fee’ doesn’t guarantee you’ll get the mid-bank rate you see on xe.com! You’d have to read the bankwest pds to see which échange mechanism they use.

It used to be quite common for physical exchange bureau to say ‘no fees’, but their rates were shocking! They’d be two or three cents off the mid-market rate.

Other reasons for the fluctuation can be processing day, or time, or the dates and times used to peg the rate. Some cards will use the highest rate on the day before you made the transaction!

 

[ZigZagWanderer]

All cards use this to increase their margins. Typically it's 3% over the spot rate. Australian cards almost always charge a 3% fee on top too. It's absolutely criminal.

I try to only use cards from the country I'm in, but I'm lucky enough to have accounts in two countries and in Europe.

I have recently switched to Wise based on advice on this forum. Conversions are about 0.5% over spot. I'll be getting a debit card too. That automatically uses the currency paid if available, or makes an automatic transfer from the most favourable available currency in your account. Up to 50 currencies, too.

 

[SYD]

All cards use this to increase their margins. Typically it's 3% over the spot rate. Australian cards almost always charge a 3% fee on top too. It's absolutely criminal.

I try to only use cards from the country I'm in, but I'm lucky enough to have accounts in two countries and in Europe.

I have recently switched to Wise based on advice on this forum. Conversions are about 0.5% over spot. I'll be getting a debit card too. That automatically uses the currency paid if available, or makes an automatic transfer from the most favourable available currency in your account. Up to 50 currencies, too.

Latitude 28° MC is Int fee free (discussed elsewhere but pretty much on the dot of the spot rate).

 

[http_x92]

Usually with 3% forex fee Citi cards you will get a separate line with the International Transaction Fee soon after the transaction is set on the statement.

 

[oz_mark]

Usually with 3% forex fee Citi cards you will get a separate line with the International Transaction Fee soon after the transaction is set on the statement.

That's my eperience as well. The $1.50 or so will pop up as another transaction. In any case, Mastercard rates are usually slightly better than Visa.

Also, both Mastercard and Visa publish their exchange rates, so easy enough to check.

 

[brett-au]

What amount are you expecting your bankwest MC to be, if was good conversion. $48, $47, $46?

 

[MEL_Traveller]

What amount are you expecting your bankwest MC to be, if was good conversion. $48, $47, $46?

I would have expected around $47.30.

 

[oz_mark]

‘No foreign exchange fee’ doesn’t guarantee you’ll get the mid-bank rate you see on xe.com! You’d have to read the bankwest pds to see which échange mechanism they use.

It used to be quite common for physical exchange bureau to say ‘no fees’, but their rates were shocking! They’d be two or three cents off the mid-market rate.

Other reasons for the fluctuation can be processing day, or time, or the dates and times used to peg the rate. Some cards will use the highest rate on the day before you made the transaction!

In the case of Bankwest, the conversion is done by MasterCard at the rate selected by MasterCard

 

[Mattg]

Is it possible that the Virgin Money card won’t add the conversion fee until the transaction is finalised (not pending)?

I did wonder about that, but the transaction is not pending and the int'l transaction fee is included in the amount I posted above, I checked.

The most logical explanation I've seen so far is that Mastercard settles the exchange rate on the date of settlement, while Visa days it on the transaction date. So perhaps there is some variation after all, but it could go either way?

 

[cove]

Last night Mrscove wanted to do an E Gift card in English pounds but her Bankwest World credit card was declined twice. After paying with a St George Amplify card she was contacted by Bankwest (CBA) and found out that they thought she was getting scammed.
One colleague and one family member have had issues with 28 Degrees working while they were travelling overseas.
Bankwest is still our preferred credit card when we are in England.

 

[kpc]

I find BW do block my online purchases esp Lifemiles....so I have to use my 28 degrees MC then

 

[SYD]

Last night Mrscove wanted to do an E Gift card in English pounds but her Bankwest World credit card was declined twice. After paying with a St George Amplify card she was contacted by Bankwest (CBA) and found out that they thought she was getting scammed.

Occasionally online I don’t get the VISA or MC authorisation window pop up using my iPad. The transaction just sits there or times out. I guess if you keep trying, it’s going to alert the bank. But I usually find it works on a PC/Laptop.

One colleague and one family member have had issues with 28 Degrees working while they were travelling overseas.

I found a couple of places where contactless (tap) was flaky but inserting or swiping the card with pin overcame it. There was one instance this year in the UK where I needed to use my ING debit card when 28° came back as “declined”. Curiously, the transaction was there online as “pending” buy fell off after about 2 wks.

It‘s handy having both MC and VISA products at hand in case it’s the merchant’s setup that’s flaky.

 

[cove]

i am thinking that banks are running scared as scammers get to buy stuff on our cards but it is annoying to get declined when I was buying 20% off restaurant cards. In the US 20% helps to cover their tippping.
No transaction fee and points keeps us using Bankwest World.

 

[serfty]

All cards use this to increase their margins. Typically it's 3% over the spot rate. Australian cards almost always charge a 3% fee on top too. It's absolutely criminal.

I thought this as well, but for the last two decades or more it can no longer be "arbitraged" into the rate. It must be shown as a separate fee.

Article: Best Credit Cards for Overseas Travel & Online Shopping

One thing to be aware of is that while many of these products are "Fee Free", the exchange rate used in the currency conversion may have a "hidden" inbuilt arbitrage that can be significant. they dont and cant have hidden inbuilt arbitrage. since late 90s (quick guess) Aussie banks are...

www.australianfrequentflyer.com.au

 

[oz_mark]

All cards use this to increase their margins. Typically it's 3% over the spot rate. Australian cards almost always charge a 3% fee on top too. It's absolutely criminal.

I try to only use cards from the country I'm in, but I'm lucky enough to have accounts in two countries and in Europe.

I have recently switched to Wise based on advice on this forum. Conversions are about 0.5% over spot. I'll be getting a debit card too. That automatically uses the currency paid if available, or makes an automatic transfer from the most favourable available currency in your account. Up to 50 currencies, too.

With possibly one or two exceptions, when you use a Mastercard or Visa for a foreign currency transaction, it is Visa or Mastercard that do the actual conversions. The banks then add a disclosed fee on top of the converted amount.

There is fairly good disclosure these days about what is happening. On 23/12 Visa quoted that their markup on EUR to AUD was 0.7%.

I have found a foreign conversion fee free Visa or Mastercard to be about as good as it gets in most situations.

 

[Oscarq]

Bankwest our preferred overseas card are being very cautious on suspicious transactions at the moment. We were contacted after they froze our card due to NZ, USA online Xmas purchases and deposits for Europe next year.. Although I had registered overseas travel on the App it was considered such a wide spread of purchases in a short period of time they may be dubious. Lovely fraud department person immediately released the hold once we verified the spend was legit. Very happy with Bankwest and there protection.

 

[ZigZagWanderer]

With possibly one or two exceptions, when you use a Mastercard or Visa for a foreign currency transaction, it is Visa or Mastercard that do the actual conversions. The banks then add a disclosed fee on top of the converted amount.

There is fairly good disclosure these days about what is happening. On 23/12 Visa quoted that their markup on EUR to AUD was 0.7%.

I have found a foreign conversion fee free Visa or Mastercard to be about as good as it gets in most situations.

Thanks for the information. I'll check this out next foreign payment.