Understanding forex charges

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user3
user3 Posts: 4 Newbie
in Credit cards
Hello all,

I have a Mastercard credit card (issued by an overseas bank) marketed as having 0% transaction fees on foreign purchases.

However, using Mastercard's online tool, I am getting charged a 1% bank fee on each transaction.

I have tried to chase this up with my bank, but I haven't really got a satisfactory response.

Their latest response was they have "no control over the charges levied by network" and confirmed that the card has a "0% foreign currency transaction margin".

I'm trying to figure out if I'm being given the run around by my bank, or if I'm misunderstanding how these things work.

What is meant by foreign currency transaction margin?

Is it feasible there is a middle-man between Mastercard and my bank, and they are the ones taking the 1%?

Many thanks in advance for any help!

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  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    What card are you using and where are you using it?
  • D_M_E
    D_M_E Posts: 3,008 Forumite
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    Issued by an overseas bank - so it's a card which is not from a UK bank, then.

    Are you buying stuff with it here in the UK and are you choosing to pay in the local currency, or the currency the card was issued in?

    Have you looked at, for example https://www.xe.com or somewhere similar to compare the exchange rate you are getting?

    At the end of the day, while a 1% charge is a bit much when you expect 0%, it's not that much compared to a lot of others.
  • eDicky
    eDicky Posts: 6,574 Forumite
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    user3 wrote: »
    What is meant by foreign currency transaction margin?
    I would understand this as the percentage margin or markup on the straight MasterCard exchange rate, that is usually imposed by the card issuer, in this case zero.

    But what they mean by the 'charges levied by the network' is something you should perhaps get them to clarify.

    Do you see the exchange rate for a transaction on your statement? It will be for the date of settlement, which is the date that you need to check the MasterCard rate for.
    Evolution, not revolution
  • user3
    user3 Posts: 4 Newbie
    edited 7 August 2018 at 5:56PM
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    Deleted_User wrote: »
    What card are you using and where are you using it?
    It's issued by a Middle Eastern bank, and used in various locations around the world (including the UK).
    I appreciate this is a UK based site, but in my experience it contains a wealth of knowledge so I thought I'd try my luck in case I'm missing something obvious.
  • user3
    user3 Posts: 4 Newbie
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    D_M_E wrote: »
    Issued by an overseas bank - so it's a card which is not from a UK bank, then.
    Correct
    D_M_E wrote: »
    Are you buying stuff with it here in the UK and are you choosing to pay in the local currency, or the currency the card was issued in?
    I always pay in the local currency (any where in the world) and let my bank handle the conversion.
    D_M_E wrote: »
    Have you looked at, for example x or somewhere similar to compare the exchange rate you are getting?
    I'm using the Mastercard rates, which let me check exactly what Mastercard is charging. The mystery is the 1% loading on those rates. And it is always exactly 1%. I'm happy with the Mastercard rates, as I know I don't have any control over them!
    D_M_E wrote: »
    At the end of the day, while a 1% charge is a bit much when you expect 0%, it's not that much compared to a lot of others.
    Yes, I fully agree. But now it bugs me because it isn't as advertised! (no such protections like the UK in this regard)
  • user3
    user3 Posts: 4 Newbie
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    eDicky wrote: »
    I would understand this as the percentage margin or markup on the straight MasterCard exchange rate, that is usually imposed by the card issuer, in this case zero.
    That is what I took it as too.
    eDicky wrote: »
    But what they mean by the 'charges levied by the network' is something you should perhaps get them to clarify.
    Good point
    eDicky wrote: »
    Do you see the exchange rate for a transaction on your statement? It will be for the date of settlement, which is the date that you need to check the MasterCard rate for.
    Yes, I'm checking the correct numbers / dates. I would post a link to the correct page on Mastercard's website, but I can't post links yet. It is fairly idiot-proof, and (as I mentioned above) the rate is always loaded bang on 1%.
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