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

bigboyeast

There are two parts to this issue.

Why did MasterCard take such a long time to process the transaction? This is almost always down to the merchant. Once the merchant submits the transaction to a payment service provider (VISA or MasterCard) they are required by UK Payment Services Regulations 2009 to process and settle the Transaction in T+1 days. The Tesco T&Cs clearly state that the exchange rate will be that applicable when the transaction is posted to the users account Ie the day that MasterCard request settlement. This is normally the day after the merchant submits the transaction to MasterCard clearing.



The second issue is the setting of exchange rates. Unlike all other UK credit cards Tesco and their operator RBS DO NOT use the exchange set by the Payment Services provider (VISA or MasterCard) when posting a transaction to the users account. They set their own rate. They do however pay the Merchant back at the MasterCard official rate (less interexchange fees), and then pocket the difference. This normally amounts to 2.25 % (for Euro and US$) in addition to the published exchange rate loading of 2.75%. HENCE YOU PAY AROUND 5% on all purchases in the EURO zone. This has nothing to do with exchange rate market fluctuation as many posters on this thread have pointed out. It is down to the RBS rate having a much larger Buy/sell spread than that set by MasterCard. For the Euro RBS operate a 560+ point spread where as MasterCard operate an 80 point spread.



To hide this fact the RBS and TESCO credit card T&Cs state that they will use either "the MasterCard rate or a rate set by ourselves". In my experience, they have always used "a rate set by ourselves" rather than the MasterCard rate. The T&Cs include the option for using the MasterCard rate for a very technical reason. If someone wants to understand why they include this option, I will explain, but its beyond the scoop of this post.



If you call them to check a rate before purchasing they will only quote an indicative daily rate set by RBS. They then indicate the actual rate will be the one when the transaction is processed less their 2.75% fee.

THIS NICE LITTLE TRICK APPLIES TO ALL RBS GROUP CREDIT AND DEBIT CARDS AND TESCO CREDIT CARDS.

Also with RBS debit cards they charge and additional £1.25 on all purchases + the 5% exchange rate loading.

I WARNED EVERYONE ABOUT THIS IN BACK IN JUNE

BLT_2

zorber wrote: »

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.

Obviously the admin didn't get any last night - so is taking it out on the board members.

Someone go around and give her a good rogering so we call all post with impunity :rotfl:

Roger1

peterbaker wrote: »

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

If you are talking about credit cards, why would you need an alternative to the Nationwide Visa credit card in Europe? Their rate is unchanged - 0% in Europe and 1% outside Europe.

The changes to their debit card do not affect the credit card.

redpete

callum9999 wrote: »

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.

It was a rhetorical question pointing out that it is ridiculous to blame the effect of rate fluctuation on Tesco/RBS.