Credit Card Foreign Exchange Rates

Compy_2

Hi,
I am looking for a credit card to use abroad. I have seen the MSE recommendations for suitable cards. They are all fee free. However I can't see anywhere that shows the conversion rates used by the card companies.
My question is, on a given day, if I spend $100 will that equate to the same amount in £ on any credit card or do they all have different rates? In other words do they work like buying foreign exchange with outlets offering different rates?
Its good to go fee free but if they charge a higher rate for the conversion this could result in a worse overall deal.

Hooloovoo

The exchange rate varies every day. Sometimes even throughout the day.

The rate the cards use will be the rate offered by Visa or Mastercard at the time the transaction is processed (which is not necessarily the same time you make the purchase).

Compy_2

Hi,
Thanks for the quick response.
I understand the daily/hourly variation. I did not know the rate was set by Visa or Mastercard. I assumed it was the individual credit card company and could therefore vary across them.
So if it doesn't matter which credit card I choose does it matter which card type I choose.
My question moves on.... Is there any difference between Visa and Mastercard on conversion rates or will they be so close it doesn't matter?
Thanks again.

Hooloovoo

Compy wrote: »

So if it doesn't matter which credit card I choose does it matter which card type I choose.

There are four things a card provider can do with foreign transactions:

1. Pass on the "raw" Visa/MasterCard rate.
2. Give the raw rate, but add a transaction fee.
3. Take the rate and add on a percentage loading, forming their "own" exchange rate if you like to think of it like that.
4. Load the exchange rate AND charge a fee for the transaction itself.

The best cards, like Halifax Clarity, and the Post Office, do option 1. They give you the raw exchange rate with no loading or fee. For any given transaction at any given time, there should be no difference between cards that do this.

The worst cards, like most debit cards, do option 4 and should be avoided at all costs.

My question moves on.... Is there any difference between Visa and Mastercard on conversion rates or will they be so close it doesn't matter?
Thanks again.

There's no reason Visa or MasterCard should offer exactly the same exchange rate. As to which of them consistently offers the best exchange rate is a task left for the reader.

rb10

No material difference between Visa and Mastercard. Sometimes Visa will be better, sometimes it'll be the other way around.

Just go for one where the bank doesn't add any loading on top, e.g. Halifax Clarity, certain Nationwide cards, Post Office, etc.

Hooloovoo

As an aside, with American Express they will generally convert all foreign transactions to US dollars before then converting again to GBP.

eskbanker

Hooloovoo wrote: »

There's no reason Visa or MasterCard should offer exactly the same exchange rate. As to which of them consistently offers the best exchange rate is a task left for the reader.

The posters on
https://forums.moneysavingexpert.com/discussion/4904567 seemed to agree on MasterCard being better, your mileage may vary!

reclusive46

Hooloovoo wrote: »

As an aside, with American Express they will generally convert all foreign transactions to US dollars before then converting again to GBP.

Although this doesn't really affect the exchange rate much. I have the foreign transaction free Avios account and I get about the same rate on the Amex and MasterCard (Amex slightly better for USD/CAD and HKD and MasterCard slightly better for EUR and AUD).