Travelex Supercard vs Halifax Clarity card

matthewh

I am still at a loss as to why Martin thinks this is the best card.

Everytime I compare visa and mastercard rates, the mastercard one is always higher. But then I have seen Martin mess up basic maths on the telly, so this is no suprise!

The biggest concern for me however is giving Travelex free reign to my current account/credit card when the two are linked. I wonder how good they will be at rectifying mistakes, as they will surely happen at some point. No institution is 100% perfect all the time.

I also think the credit card companies could get wise to the Travelex transactions and treat them as cash advances like they do with other transactions, such as foreign exchange purchases, rendering the whole card useless.

I also wonder what Travelex ultimate goal is with this card, as surely it is not making any money purely charging the visa rate.

dingdong3000

Perhaps Travelex paid Martin to write a solid thumbs up in his article or just to get people talking about it lol..

Either way i'm still sticking to my Clarity Card!

adindas

I just checked yesterday exchange rate May 14, 2015 for £/EUR (today the figure for Master has not been provided)

Visa 1.3869600001
Master 1.381477

While a few days before, Master is better than Visa. The current figure indicates the opposite result.

So the conclusion that Master exchange rate is better than Visa or Vice Versa is incorrect.

I have been doing this side by side comparison almost every time I travel and withdraw foreign currency abroad. Few people have confirmed this as well.

My conclusion sofar:

There is no clear evidence that one is better than the other in term of the exchange rate.

They are slightly different because they update their exchange rate at a different time during the day

The difference between the two in steady state condition (not transient), e.g. given the economy and political situation of those country is stable is tiny.

Also keep in mind, the date the transaction that you have done will hit your account is not within your control. It could hit when Master is better or Vice Versa. So there is no point to pay attention on this tiny difference.

Si67 wrote: »

Right then, now the Mastercard rates for 13th May are in, the figures are a lot closer.

Visa 1.3838900001
Mastercard 1.384993

For our cash withdrawal of 1000 Euros, this time the Clarity card would have charged £721.69, whereas the Supercard would have charged £722.60.

The difference is therefore only 91p, which sounds more like it. This is still in favour of Clarity, but you'd have to pay it back within 2-3 days to be even (fairly easy though if you have mobile internet banking, and you'd need a smartphone to have a Supercard anyway).

The figures for 12th May do indeed seem abnormal. Just unlucky if you recently bought something on Visa and the transaction was posted on 12th May!

Just for reference...

I got the Visa rate from here
http://www.visaeurope.com/making-payments/exchange-rates

and the Mastercard rate from here
https://www.mastercard.com/global/currencyconversion/

Si67

Yes that would seem to be the case, and I've always thought that anyway. It was just unlucky that I selected 12th May, when the difference was abnormally large.

Still confused as to why Martin considers the Supercard to be better than Clarity, when really they are pretty much the same, one giving the Visa interbank rate and the other giving the Mastercard interbank rate.

Still also confused about linking the Supercard to a credit card though. Credit cards make their money on purchase transactions by charging a commission to the retailer. In this case, presumably Travelex would be seen as the retailer, so unless Travelex passes that charge onto us (which would defeat the object!) every such transaction would be at a loss. The only alternative would be that the credit card treats the transaction as a cash advance, in which case there would usually be a cash advance fee (except for when a Clarity card is the linked credit card) and interest.

Such important and fundamental questions, for which I can find no answers.

adindas wrote: »

I just checked yesterday exchange rate May 14, 2015 for £/EUR (today the figure for Master has not been provided)

Visa 1.3869600001
Master 1.381477

While a few days before, Master is better than Visa. The current figure shoes the opposite result. So the conclusion that Master exchange rate is better than Visa is incorrect and Vice Versa.

I have been doing this comparison side by side almost every time I travel and withdraw foreign currency abroad. Few people have confirmed this as well.

My conclusion there is no clear evidence that one is better than the other in term of the exchange rate.

They are slightly different because they update their exchange rate at a different time during the day

The difference between the two in steady state condition (not transient), e.g. given the economy and political situation of those country is stable, the difference is tiny.

Candyapple

http://www.moneysavingexpert.com/credit-cards/travelex-supercard

If it's so good, how is Travelex making any money from it?

Over to MoneySavingExpert founder Martin Lewis:

“I asked exactly that question when Travelex first told me of its plans to launch Supercard. So much so I asked if it’d come in and chat to me about it so I could understand it.

"On the surface this is a loss-leader as there are no charges whatsoever. Even if it had added just a 0.1% charge to the exchange rate, it would’ve made sense.

"My big concern is this card would be cheap for six months then it’d whack on stealth charges. I specifically asked if it planned to do this, but it said that wasn’t the business model (of course, if it ever does change tack, I’ll let you know via my weekly email). After a little bit of pushing (it didn’t want to reveal commercially sensitive info), I finally managed to get it to explain.

"Travelex is a major player in the travel cash game, but it knows nothing about the people it deals with. By and large, its customers walk up to one of its bureaux de change, make the exchange, then walk off with their currency or they buy online.

"Supercard is all about building a customer database. Who they are. Where they go on holiday. What they buy.

"Then it aims to develop future products with a ready-made customer base (as many other firms do). It didn’t explain what these products are, but I suspect it’ll join the sending cash overseas market for example, for those looking to buy properties abroad.

"So in a nutshell, it seems (and you can never know 100%) the aim here is it believes offering a loss leader like Supercard is effectively a cheap model for customer acquisition for future products.”

reclusive46

Bare in mind outside of the EU they will be making more in merchant fees than they'll get charged. When a UK card is processed in the U.S. For example, an extra 2% is tagged on as a merchant fee.

Si67

Is that just for cash withdrawals? When I was in New York last year I used my Halifax Clarity card for everything, and the only one time anything extra was tagged on was a when I withdrew cash from an ATM. That was a $2 charge applied by the machine (ie. outside the control of Halifax) and was displayed in advance.

reclusive46 wrote: »

Bare in mind outside of the EU they will be making more in merchant fees than they'll get charged. When a UK card is processed in the U.S. For example, an extra 2% is tagged on as a merchant fee.

reclusive46

Si67 wrote: »

Is that just for cash withdrawals? When I was in New York last year I used my Halifax Clarity card for everything, and the only one time anything extra was tagged on was a when I withdrew cash from an ATM. That $2 charge was applied by the machine (ie. outside the control of Halifax) and was displayed in advance.

No sorry. I was referring to the fee the merchant was charged for processing the card that is then passed onto the issuer. In the U.S. For example, The average fee is around 2% but for non us cards it's around 4%. That's a lot more than the 1.2% travelex will get charged by your bank, so there making around a 2.8% profit. It'll vary by country but processing cards from outside the country the merchant is based is very expensive (excluding eu countries as they are classed as domestic) for the merchant.

Their Twitter confirmed cash withdrawals will count as a cash advance on a credit card.

Si67

reclusive46 wrote: »

Their Twitter confirmed cash withdrawals will count as a cash advance on a credit card.

Ah, I never thought to look there. Thanks! I think they should publicise that fact a bit more, because a lot of people are going to be caught out otherwise.

Cisco001

Si67 wrote: »

Ah, I never thought to look there. Thanks! I think they should publicise that fact a bit more, because a lot of people are going to be caught out otherwise.

What is the charge if you link in to Visa debit card?