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MSE News: Mastercard vs Visa for using abroad – which wins?

edited 22 July 2016 at 5:29PM in Flights, Currency & Car Hire
30 replies 7.7K views
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  • NFHNFH Forumite
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    koru wrote: »
    As zagfles points out, at least part of the explanation seems to be that Visa has a much bigger margin between the bid and offer rates (the difference between the rate they use when buying a currency vs selling it).
    You're along the right lines, but I think the real reason might be that MasterCard uses only the bid or offer on a particular day for everyone based on the net flow, whereas perhaps Visa doesn't pass on this benefit to card holders. I'm only guessing, but it's a plausible explanation. See post 4 above.
  • korukoru Forumite
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    NFH wrote: »
    You're along the right lines, but I think the real reason might be that MasterCard uses only the bid or offer on a particular day for everyone based on the net flow, whereas perhaps Visa doesn't pass on this benefit to card holders. I'm only guessing, but it's a plausible explanation. See post 4 above.
    If this were true, why would there be a slightly different (a few basis points) rate converting (say) Euro to Pounds than vice-versa, on the same day? Or am I misunderstanding?

    Perhaps the two rates are weighted averages for the day, so the difference reflects differences in the distribution of transactions into and out of GBP?
    koru
  • SystemSystem
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    And yet no comments on the Creation Everyday (MasterCard)

    Virtually identical to Halifax Clarity but doesn't even get a mention...
  • NFHNFH Forumite
    4.4K posts
    koru wrote: »
    If this were true, why would there be a slightly different (a few basis points) rate converting (say) Euro to Pounds than vice-versa, on the same day? Or am I misunderstanding?
    Good question. I'm guessing that Visa might automatically add its own spread. If it has traded on the bid, then it derives an offer, and if it has traded on the offer, then it derives a bid. A bit of extra revenue. As I said, this is a plausible guess; don't take it as fact.
  • zerogzerog Forumite
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    This is common knowledge for people who actually look at such things. Fortunately I don't think MSE "outing" this is going to change anything.

    This is also why the Travelex Supercard is not of much interest to me, although I will still use if I need to reach a spending target on a card that does charge a forex fee.

    Yes, Visa charges a spread of up to 1%, and Mastercard more or less gives you the actual rate that it gets when trading. In some countries I have withdrawn several hundred GBP of the local currency from my Halifax Clarity etc. and sold it immediately for a 1% profit (using educated guesses to avoid the rate moving against me by the time the transaction is processed)
  • reduxredux Forumite
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    I can't believe that MSE thinks that it is new knowledge that MasterCard can average out slightly better than Visa.

    Mind you, I also can't believe they spent so much time talking about Fairfx and Caxtonfx, which do have some currency loading. Maybe that's why they didn't notice.
  • waqasahmedwaqasahmed Forumite
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    A bit late, but personally for me. I knew this a while ago, but it is nice to see some pretty graphs!

    Also, as I have a Visa debit card which gives you the no loading fee option, that's an option to load money on to. Mastercards are good for just general paying. In some countries, and especially third world nation, often there's an ATM nearby, but there's no credit card machine. In a lot of countries, including the UK (though the practise is slowly going away, except in the small shops), they dont allow you to use a credit card, unless it's above a certain amount (Typically MasterCards are credit cards, and Visa cards are debit cards. Not always the case ofc!)

    For me, it's worth having both tbh.
  • Heng_Leng wrote: »
    And yet no comments on the Creation Everyday (MasterCard)

    Virtually identical to Halifax Clarity but doesn't even get a mention...
    There is a 2.99% foreign conversion charge per transaction.

    http://www.creation.co.uk/about-us/creation-faqs#credit-cards
  • eDickyeDicky Forumite
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    9. When I use my credit card abroad will I incur any charges for doing so?

    There is a 2.99% foreign conversion charge per transaction. For all our Credit Cards except our Everyday Credit Card that has no fee.


    ...Heng Leng refers to the 'Everyday' card.
    Evolution, not revolution
  • eDicky wrote: »
    9. When I use my credit card abroad will I incur any charges for doing so?

    There is a 2.99% foreign conversion charge per transaction. For all our Credit Cards except our Everyday Credit Card that has no fee.


    ...Heng Leng refers to the 'Everyday' card.

    How did I miss that? :o:D
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