Foreign Exchange Conversion and Credit Card Usage

Author: archive
Joined: 23 Jul 2004
Posts: 5007
Posted: Thu Jan 13, 2005 4:13 pm
Post subject: Foreign exchange conversion

Gordon
Date: 5/2/2000 8:20 am CDT

On April 1, 2000 Chase Manhattan (Shell Mastercard) has introduced a 2% foreign transaction fee instead of the previous conversion at the bank rate (which already had a profit spread for the bank). This is a very significant change for anyone using credit card for foreign travel.

Which cards continue to use the bank rate of exchange without the supplementary fee?

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Author: archive
Joined: 23 Jul 2004
Posts: 5007
Posted: Thu Jan 13, 2005 4:13 pm

Board Monitor
Date: 5/4/2000 1:11 pm CDT

Gordon,

Great question! This seems to be a growing trend as of late. BankRate.com recently wrote a very informative article about this very subject and, although we have no partnership with them, we don't hesitate to refer consumers to their site. You will find the article at the following web page...

http://www.bankrate.com/brm/news/cc/20000403.asp

Hope this helps!

Regards,
Jackie Hughes
Board Monitor
CardRatings.org

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Author: archive
Joined: 23 Jul 2004
Posts: 5007
Posted: Thu Jan 13, 2005 4:15 pm

Gordon
Date: 5/5/2000 12:31 am CDT

On my original query, the imposition of a 2% exchange fee can add up if credit cards are used for foreign travel. In that the credit card issuer takes a percentage from the merchant and there is no "inventory" of foreign currencies (as in the case of the airport kiosks), the small spread traditionally used by banks for large currency exchange plus the cut from the selling merchant should be adequate profit incentive

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