Chase and AmEx Currency Exchange Rates on foreign transactions

Discussion in 'General Discussion | Credit Cards' started by profpeabody, Mar 9, 2016.  |  Print Topic

  1. profpeabody

    profpeabody Silver Member

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    Just back from a trip to London (loved staying at the Park Lane Marriott - nice property) and am amazed at the difference in the rates used by Chase and AmEx for GBP charges. AmEx is a respectable $1.4 0-$1.42 over the course of the week. Chase on the other hand was $1.47 - $1.50 for the same time period. So even though there is no foreign transaction fee on either card, the exchange rate is obviously MUCH better through AmEx. What makes it sting more is that I was charged a rate of $1.50 at Chase for a purchase and then the refund for that deposit used a rate of ($1.40 absolutely the only time that low rate was used by Chase) so I paid $31.56 for the transaction which may not be a foreign transaction fee in the general sense but it sure feels like one to me. Guess I will stick with AmEx for travel from now on.
     
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  2. Counsellor
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    Counsellor Gold Member

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    Strange. Next time I'm in Europe I'll make two purchases abut the same time using AMEX and Chase cards and see if this repeats. If so, I'll definitely let Chase know.
     
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  3. qwas

    qwas Member

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    Thats really strange, Thanks for pointing this out!
    Will definitely take this into account.
     
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  4. profpeabody

    profpeabody Silver Member

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    Further charges came in on both cards and the same scenario played out. Chase exchange rate was much less favorable than AmEx.
     
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  5. Wandering Aramean
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    Wandering Aramean Gold Member

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  6. satman40

    satman40 Gold Member

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    I use Amex SPG, for the 1.25 on AA. Chase give me 1.1 for United..

    Thanks for pointing the exchange difference out...will keep an eye out.
     
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  7. Counsellor
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    Counsellor Gold Member

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    Today (29 March) at 15:30 GMT the VISA rate for a Euro is $1.122 while the bank rate (per OandA) is $1.118. Of course, the OandA rate is for transactions over $1MM, so the spread is likely to be narrower.
     
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  8. Juanefny

    Juanefny Silver Member

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    This is great to know. Maybe it pays to use AMEX in foreign lands. I'll keep this mind on future travels.
     
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  9. profpeabody

    profpeabody Silver Member

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    View From the Wing had a piece on exchange rates in February. Apparently it is a Visa versus AmEx versus MasterCard issue rather than a matter of the bank. The exchange rate on the site noted by Wandering Aramean above was $1.42 for the day that my Chase card used $1.47. Next trip I am going to experiment and place a small charge on Visa, AmEx and MC at the same vendor on the same day and see how it plays out.
     
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  10. othermike27

    othermike27 Silver Member

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    Here is one page of the card agreement boilerplate just received from Citi concerning the pending issue of a Citi VISA to replace my Costco Amex card. Check out the foreign currency conversion explanation at the bottom of the page. After reading this, I conclude that experimentation with exchange rates is futile...
     

    Attached Files:

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  11. Counsellor
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    Counsellor Gold Member

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    OK, I did the test I mentioned in my post (#2, above), and made charges in Munich on three cards, an AmEx, a VISA, and a MasterCard, each issued by a different US bank, denominated in dollars, and each purporting to have no foreign transaction or currency conversion fee. The AmEx was issued by American Express, the VISA by Chase, and the MasterCard by Barclay's. Each charge was made at a different establishment in the city of Munich, major retailers, not small shops.

    I made the charges on 25 April, and now they have all crossed my account.

    I am also including the time of the transaction, in case that's significant.

    - MasterCard, 10:59 AM, exchange rate used: 1 € = $1.1275

    - AmEx, 4:53 PM, exchange rate used: 1 € = $1.1291

    - VISA, 5:03 PM, exchange rate used: 1 € = $1.1277

    Below are the average exchange rates for buying Euro with US Dollars, as reported by OANDA. They report the rates used the previous day, so the date I use below is the date of the transaction (e.g., the report on the 27th is of the rates used in transactions on the 26th, so I use the 26th as the date below).

    24 April, average rate used in transactions 1 € = $1.1229

    25 April, average rate used in transactions 1 € = $1.1251

    26 April, average rate used in transactions 1 € = $1.1284

    I include all three rates, since a card processor may use yesterday's rates for today's transactions, it may use the rate in effect on the date of the transaction itself, or it may use the rate on the date processed, which may be the day following the transaction.

    My conclusions from this single example (no telling how typical this was):

    1. None of the cards uses the average interbank rate, but rather all seem to use a rate more favorable to the card issuer than to the customer.

    2. The amount that the rate applied exceeds the interbank rate is slight (seemingly less than one-half of one percent), and of little significance to the average consumer

    3. There does not appear to be enough difference between VISA, MasterCard, or AmEx in the exchange rates used by each to warrant using or avoiding any card on that basis.

    Now, this was just one test, and it uses a popular currency, the Euro. Whether the same result would apply on a different day, or with respect to a less-frequently-used currency, remains to be seen.
     
    Last edited: May 5, 2016
  12. Laptop Nomad

    Laptop Nomad Silver Member

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    Just got back from Burkina Faso. My hotel bill was 100.00 higher for the same rate as the other two people in my party. I used a Milage plus chase card NTF fees. The others used a bank card from there respective banks. The client who pays the bill wanted proof that was what I was charged. Maybe from now on I will use AMEX.
     
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  13. Counsellor
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    Counsellor Gold Member

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    If that charge just crossed your account, you may want to wait a few days to see if the rate that was applied changes.

    If it does not (or if the charge crossed more than a week ago), I'd recommend you get information from your colleagues as to the date the charge was made and the rate used on their charges, and if the date is the same as for you, write to Chase.

    It may make no difference, and you may get a "brush off" response, but that's how the lawsuits for false representation started back in the LiPuma days.

    One other suggestion. You don't mention how large the total charge was, so it's hard to tell how much the rate difference is. If the $100 difference is about 3% to 5% of the total bill, you may have been the victim of "DCC". Check your invoice to see whether you were charged in local currency (CFA, I believe?) or whether it was converted to dollars at the hotel. If the latter, that (DCC) would probably explain the discrepancy.
     
  14. Laptop Nomad

    Laptop Nomad Silver Member

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    No we were all charged in CFA. The price was the same on all three of our hotel bills. They were clean bills no extra charges on the bills such as bar or laundry. It was the way that Chase did the currency exchange. The client is paying whatever the credit card company charges. I will use the Amex next time. The total charge was around $1200.00 US.
     
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  15. estnet
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    estnet Gold Member

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    So using Chase cost about 10%! WOW
    This has not been my experience the few times I've used them (only to use 4th night free prestige card) - guess I've been lucky.
     
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  16. Wandering Aramean
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    Wandering Aramean Gold Member

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    Isn't that a Citi card?

    And an 8% variation in f/x is very, very uncommon. I'd do some digging on that one.
     
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  17. Counsellor
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    Counsellor Gold Member

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    Absolutely. Definitely write Chase and provide details. There are two different CFAs in use, you know, and the wrong one may have been applied. Or it may be something else.

    And please let us know what happens. I've had times when I felt that Chase was taking advantage on the rate but only by about 1%, never as high as 8%.
     
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  18. estnet
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    estnet Gold Member

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    Uh, of course you're right! One of the few that Chase hasn't taken over,
    however - I have used the Chase Marriott card in Hong Kong and Vietnam and had correct conversion rates (checking on oanda) so very interested in whatever answer you get!
     
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  19. desilyn_09

    desilyn_09 New Member

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    Wow thanks, I guess I'll be doing this next time :O
     
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  20. Mrlasssen

    Mrlasssen Silver Member

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    Does anyone have experience buying Visa debit cards with pins with a American Express Gold? Do they qualify as the spend limit?
     
  21. Wandering Aramean
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    Wandering Aramean Gold Member

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    What does this have to do with f/x fees? Especially as the debit cards generally can only be used in the USA.
     
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  22. Mrlasssen

    Mrlasssen Silver Member

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    M
    Probably this is in the wrong thread. It has nothing to do with f/x fees. Question was about meeting spend limits.
     

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