what is a 'perfect' exchange rate?

abcdefghijkaties

so i was reading Martin's info about credit and debit cards which are good for travelling with. after reading about the debit cards, i took his advice: i went to Metro Bank and signed up for a current account, and got a debit card from them, on which they do not charge a foreign transaction fee.

the customer service representative then asked if i'd like a credit card, telling me that it also has no charges for foreign transactions. i wasn't sure exactly what that meant, i.e. whether that equates to the same deal as with the Aqua Reward (minus the cashback, of course) and other cards that Martin lists as having 'perfect' exchange rates. i decided to just get the card, as i was in the building and didn't really wish to return, and then cancel it if i don't want it!

i've never known where credit cards get their rates from. the guy said that they get theirs from Mastercard. so then i'm assuming that all Mastercards get their rates from Mastercard, whoever the issuer, and ditto for Visa cards. but i rang Aqua to enquire about their card, and the person i spoke to insisted that it's the issuing bank's own rate that THEY use...

so, firstly, i'm wondering if they all get their rates from the same two places, or not. because otherwise, even if the cards charge no extra percentage as a transaction fee, there are still variables in which card would be better depending on where their exchange rate comes from. i mean, presumably even mastercard and visa have what is effectively a buying rate and a selling rate, not just one that works both ways. or do they??

and secondly, i'm just wondering if this is all that Martin means by a 'perfect' exchange rate, i.e. no loading with a transaction fee, in which case, i can stick with the Metro Bank credit card and not bother with cancelling it and getting another (unless i feel i need a Visa card, since i saw that someone pointed out on another thread that MasterCard isn't accepted in as many places). n.b. i'm not bothered about the interest rate or the cash advance fees, as i intend to pay in full each month and not use the card for cash withdrawals.

InsideInsurance

The networks, Visa, Mastercard, Amex etc set the exchange rates on a daily basis. Most publish their rates, Mastercard for example you can find https://www.mastercard.com/global/currencyconversion/index.html (the base currency is your cards currency so GBP)

Card issuers can then apply fees (flat rate and/ or percentages) on top of the network rate.

A "perfect" rate is one where the issuer adds nothing to it. In theory of cause you could get a better than perfect rate if the issuer was to give you an improved rate but then that would be money out of their pocket so is almost certainly not going to happen

lukewd

How do these "perfect" credit card exchange rates compare to the Forex company prepaid cards such as Caxton etc?

zagfles

They are better. All prepaid cards either markup the VISA/Mastercard rate, use a worse exchange rate, or have other charges.

NiftyDigits

zagfles wrote: »

They are better. All prepaid cards either markup the VISA/Mastercard rate, use a worse exchange rate, or have other charges.

With the exception of Kalixa Pay, as you can attain that exchange rate with purchases abroad.

goldlemontree

So is getting for example a Halifax clarity card with 'perfect exchange rates', better than using a site like Travelmoneymax for best exchange rates and just taking cash?

grumbler

https://www.mastercard.com/global/currencyconversion/
1.314987 £/€ today

Compare to Travelmoneymax. As simple as that. BTW, it shows Halifax Clarity at the top to make the comparison easier for you.

Also, IMHO, a card is much more safe and convenient than cash.

nomoneytoday

goldlemontree wrote: »

So is getting for example a Halifax clarity card with 'perfect exchange rates', better than using a site like Travelmoneymax for best exchange rates and just taking cash?

The rates change all the time, so with the cash you're locking in at the point you do the deal, whereas with the card the rate is set when you transact.

The card will have the built in CC protection vs stolen cash being lost.