Exchange rate

goodValue

How can I check that the exchange rate given by my credit card is at a favourable rate?

I've looked at oanda.com for the rate on two dates when exchanges were made, and see the following:

oanda rate   0.90624      0.90454

card rate      0.90512      0.89657

There were no other charges for the transactions, so the only consideration for the card, is the exchange rate.

Am I right in assuming that the oanda rate is suitable for comparison, or are their other rates that would be more suitable.

Given the data above, how would you measure whether or not the card is giving a good rate?

eskbanker

Somewhere within the website or terms of your card it should specify what's used for exchange rates, but they're inherently dynamic so it's unlikely to be possible to validate rates used against a single rate captured by a third party site for a given day.

Nebulous2

What credit card is it? Is it a specific travel card? 

We have a lot of discussion about travel cards here, but it's very rare for anyone to be unhappy with the rate.  

The rate will be set by the network used rather than by your credit card provider if it is a travel card, with some people claiming that the MasterCard rate is marginally better than Visa. 

I've sometimes looked up the exchange rate at the time I've made a largeish  transaction, and it has been very close to the rate I've received. 

As Eskbanker says a single daily rate doesn't capture the fluctuations during the day. Rates are often taken at noon.

So you could buy something in the morning, an event then occurs which strengthens or weakens one of the two currencies you are using, by the noon fix the rate has changed in response to the economic news. 

eDicky

goodValue said:

How can I check that the exchange rate given by my credit card is at a favourable rate?

When trying to make such a comparison you need to take into account that the live interbank rate (aka mid-market or spot rate) is constantly fluctuating, whereas Visa and MasterCard set daily rates applicable to transactions made in a currency other than that of the card used.

In addition, the final rate applied for a card transaction is likely to be the daily rate (or that of the previous day) on the date of settlement of the transaction on your account, which is usually a working day or two after the actual transaction.

https://www.mastercard.com/content/mastercardcom/global/en/personal/get-support/convert-currency.html

https://www.visa.com.my/support/consumer/travel-support/exchange-rate-calculator.html

https://www.oanda.com/currency-converter/live-exchange-rates/

https://www.xe.com/currencyconverter/

Personally I tend to use the mid-market rate shown on XE for current rate indication.

goodValue

I asked the original question because the two examples I gave showed a difference of about a factor of 10 (0.1% versus 0.9%).

The above posts explained why there could be such a difference in exchange rate for credit cards (mine's a Visa).

You can compare different currency exchange services because the request

can be fulfilled in a very short time - am I correct in saying this?

In using the currency exchange services for the major currencies, is there a rough value of the difference in the rate you get, and the market rate (whatever that is?).

Or is this constantly changing, and dependant on economic conditions.

DullGreyGuy

goodValue said:

I asked the original question because the two examples I gave showed a difference of about a factor of 10 (0.1% versus 0.9%).

The above posts explained why there could be such a difference in exchange rate for credit cards (mine's a Visa).

You can compare different currency exchange services because the request

can be fulfilled in a very short time - am I correct in saying this?

In using the currency exchange services for the major currencies, is there a rough value of the difference in the rate you get, and the market rate (whatever that is?).

Or is this constantly changing, and dependant on economic conditions.

The card networks apply the FX rate (Visa, Mastercard, AmEx etc) on a daily basis, certain card issuers adjust it negatively as an alternative to transaction fees. Given FX rates fluctuate 24/7 at any given point the live FX rate may be better or worse than the FX rate set. 

The card networks typically take the mid market rate at a set time (Mastercard is 15:05 GMT) plus a small margin. Any transactions before this go on the prior day rate. 

penners324

Use the visa exchange rate checker