foreign exchange

Ladyhawk

Hi -

How do credit card companies calculate the foreign exchange rate when you purchase something abroad? Does it go by what the Euro is trading at that minute? or does it average out a day or even a month? Is it the intrabank rate or someother unfathomable rate?

thanks!

CannyJock

Normally there's an add-on to the daily rate called a loading charge where they hike up the rates. The other answer is "they make it up to suit themselves". Both are right

Have a read here http://www.moneysavingexpert.com/travel/cheap-travel-money

Ladyhawk

Thanks - I have just applied to Santander for their credit card. So when I book my ski lessons and lift pass in france (quoted in Euros) in March on the internet, it is best to use this card? or won't it really matter?

noh

Ladyhawk wrote: »

Hi -

How do credit card companies calculate the foreign exchange rate when you purchase something abroad? Does it go by what the Euro is trading at that minute? or does it average out a day or even a month? Is it the intrabank rate or someother unfathomable rate?

thanks!

They set their own rates daily.

Visa here http://corporate.visa.com/pd/consumer_services/consumer_ex_rates.jsp?src=ex_rez

Mastercard don't seem to publish their rates on the web but have found this
http://www.freedom-card.co.uk/currency-converter.aspx

td_007

Ladyhawk wrote: »

Thanks - I have just applied to Santander for their credit card. So when I book my ski lessons and lift pass in france (quoted in Euros) in March on the internet, it is best to use this card? or won't it really matter?

If it is the Santander Zero card that you are asking about, then it does not charge foreign usage fee. Generally a fee of 2.75% is added for foreign usage and is included into the exchange rate. If for example the exchange rate is £1=Eur 1.5, then with a card that has foreign usage fee (2.75%) the exchange rate will be approx £1=Eur 1.46. With Santander it you will get the full Eur 1.5. So with Santander you will save £2.75 for every £100 you spend.