If you have a TESCO credit card - READ THIS Huge rip-off on foreign transactions

strelitzia123

This must be some kind of record - a recent foreign purchase with my TESCO card cost me 9% more than the official Mastercard rate.

This really is the credit card from Hell for forex purchases.

Here's how it happened...

On 18th August I paid for accommodation in south africa with my tesco card - at the time the mastercard offical rate was 11.238 to the pound, so my ZAR8155 transaction should have cost as little as GBP725.65.

Tesco only then posted the transaction on 8th October, by which time the official rate from Mastercard had dropped to 10.888, so the transaction would then cost GBP748.98 - an increase of 3.2%

Now Tesco also adds a foreign exchange loading of 2.75%, which is not unusual, if a little painful to bear - this brings the total up to GBP769.57 - see how this is mounting up.

Now you might think thats the end of it, but actually I was charged 792.07 for this transaction - another 2.9% on top - and the reason why? It turns out that TESCO actually uses its own forigen eschange rate (not Mastercard's rate) - they make this rate up and seem to be able to charge you any rate they choose to. And they add the loading ON TOP !!!

So when all these extras are added together - the total ends up being 9.2% higher than the basic Mastercard rate.

Now, I knew about the 2.75% loading - that's quite common these days, but I had no idea that I could get conned for a massive 9% in fees.

So whilst I have suffered a loss of sixty pounds or so, I hope that by reading this, a few readers might avoid using their TESCO credit cards overseas, and let the community claw that money back from TESCO.

Martin Lewis - you really should take notice and list TESCO cards in your cards from HELL :mad:. And when you list the TESCO loading charge of 2.75%, you really should make it clear that their loading is on top of an uncompetitive made-up rate, not on top of the official Mastercard rate.

stephane_2

What are yu on about...the exchange rate has got nothing to do with Mastercard...you should have checked Tesco exchange rate

stephane_2

Nothing to do with being nasty....but before complaining about a product just make sure that you have all the facts and read the small prints....

Hax

zorber wrote: »

Stop being so nasty!!!

Not every one is as finincially aware as perhaps you, otherwise there would be no point to most of this forum.

People post on here to help other people i am sure the OP doesnt appriciate being kicked when they are down.

Well said. zorber! Stephane seems to think that they are better than others and appears to take great pleasure from being rude and abusive to those that have encountered problems or made mistakes.

It's disappointing that they have such a poor attitude. And Stephane - you are nasty - I read one of your posts earlier where you told a forum user to get off the forums - the post is no longer visible - hopefully because of the abuse report I filed - maybe others did the same too.

With respect to the OP, whilst they probably should have checked the rates before using the card, their post does at least serve as a useful reminder to others.

System

Was someone having a bad day?

To be fair to the OP, the vast majority of credit cards use their card scheme rate as the reference rate and then add a loading percentage of up to 2.99% onto that.

Tesco Bank are unusual in this respect by not using it and do not flag this up other than a vague reference in the small print.

This hidden exchange fee likely falls foul of the Unfair Terms in Consumer Contracts Regulations...

stephane wrote: »

What are yu on about...the exchange rate has got nothing to do with Mastercard...you should have checked Tesco exchange rate

callum9999

stephane wrote: »

What are yu on about...the exchange rate has got nothing to do with Mastercard...you should have checked Tesco exchange rate

It has got something to do with mastercard. They, along with visa, will have some sort of merchant exchange rate.

Typically, a card will take the relevant rate and add on 2.75%. This makes it easy to compare different cards. If Tesco use their own made-up rate, for all you know they could dictate that the rate is 10% higher than anyone else (extreme but theoretically possible) and then put their loading fee on top.

The fact that Tesco do this is VERY well worth knowing.

redpete

strelitzia123 wrote: »

Tesco only then posted the transaction on 8th October, by which time the official rate from Mastercard had dropped to 10.888, so the transaction would then cost GBP748.98 - an increase of 3.2%

Would you have complained if the exchange rate fluctuation had worked in your favour?

It turns out that TESCO actually uses its own forigen eschange rate (not Mastercard's rate) - they make this rate up and seem to be able to charge you any rate they choose to.

Any idea if the Tesco rate is consistently worse than Mastercard's or are you basing your recommendation just on the single example you 've quoted.

peterbaker

redpete wrote: »

Would you have complained if the exchange rate fluctuation had worked in your favour?....
Any idea if the Tesco rate is consistently worse than Mastercard's or are you basing your recommendation just on the single example you 've quoted.

:rotfl:
I have just had this vision of a bunch of MSE volunteers holding a vigil by rotation until we see an exchange rate fluctuation in our favour :rotfl:

My vision is a bit like that Indiana Jones movie where they find the crusty old crusader still guarding the Holy Grail after 800 years ... all I can say MSE'ers is don't hold your breath

Thank you to the OP for bringing this to our attention.

I am still using Nationwide VISA for all my European transactions but I have logged the fact that when, inevitably, I shall have to find an alternative, I can ignore Tesco and still leave their card firmly at home :money:

callum9999

redpete wrote: »

Would you have complained if the exchange rate fluctuation had worked in your favour?



Any idea if the Tesco rate is consistently worse than Mastercard's or are you basing your recommendation just on the single example you 've quoted.

What a ridiculous question. Obviously people only complain when it impacts them negatively. You'd have to be a complete moron to call up Tesco and complain that the deal they are giving you is too good.

sheils6

Thanks for the post Strelitzia. I don't use my Tesco card very often abroad but when I have I have thought it wasn't a very good rate. I didn't know they used their own rate. I will take a different card next time and compare its rate.

zorber

Not sure why my original post were removed

looks like the Admin are over sensoring posts.

The least they could have done explained why they are removing posts.