Comments on: Foreign Currency Transaction Fees List

By: Cheap Bastard

Cheap Bastard — Mon, 16 Nov 2009 21:02:08 +0000

Yes, IB is indeed a cheap way to convert money. But keep in mind the 10 page application process and proof of residency process is hell. It’s worth the effort though if you travel a lot, or need to do a big exchange.

So there’s no confusion, the 10k doesn’t have to be exchanged. IB just wants to see a 10k USD min balance for their forex accounts. And that’s USD values of all currencies combined. There’s no fee if you drop below that though.

By: Canuck

Canuck — Mon, 16 Nov 2009 19:52:54 +0000

Cheap Bastard,

Thanks for the IB info.
At $0.06 on the Euro in Visa/CIBC commissions/charges, a 10,000 Euro family vacation charged to my VISA means $600 extorted by my bank, more than enough to pay for the IB commission and the non-resident European account fees.

By: Cheap Bastard

Cheap Bastard — Sun, 15 Nov 2009 08:09:15 +0000

If I were a Canadian resident, this is what I would do:

Get an Interactive Brokers account. It’s a hassle to get it open and funded with $10k, but once you have it you can convert your money at market rate, with a flat commission of $2.50.

Buy a lump sum the amount in euros that you expect to spend overseas.

Open a non-resident euro account somewhere, and fund it from the euros in your IB account. Non-resident euro accounts will have a monthly fee, but you can close the account when you’re done with it. Wire the unspent euros back to the IB account and let them count toward the minimum balance.

By: Canuck

Canuck — Fri, 13 Nov 2009 18:32:16 +0000

I hold a CIBC Aerogold VISA card and following a recent trip to Europe, I found that the rate on my VISA statement is 4% (that’s right, 4!!!)higher than the Interbank posted rate for that time period (a 24-hour span between the transaction date and the posted date).
Just got off the phone (the whole morning) with CIBC Visa and Visa International back and forth, and after speaking to a number of clueless agents, I was FINALLY able to determine that:
1) Visa Int’l charges CIBC 1% for the conversion process
2) CIBC charges me an arbitrary conversion rate (NOT the Interbank rate) and they will NOT disclose how that rate is arrived at or how it relates to the published Interbank Rate
3) CIBC then charges an additional 2.5% admin. fee on top of that elusive rate, which already contains their cost recovery and a profit margin.
When I asked how I, as a customer, can assess my transaction cost BEFOREHAND if CIBC will not disclose their formula for their own conversion rate, I was told that this may be fuzzy, but that is how it is spelled out in the cardholder’s agreement.
When I asked what service I am receiving for the 2.5% admin. fee, since the cost of conversion (and profit) is already factored into their conversion, I was told that this is how it is, that I have been notified in the agreement, and then the manager went on to agree with my that it is not a good idea to use my Visa card abroad, that it will be more expensive than using cash! Unreal!!! How can an electronic, cash-less conversion be more expensive than a physical cash exchange??? How? Simple, it’s called billion-dollar quarterly profits…
So for those of you, esp. our American neighbours, who thought that 3% was an excessive fee, try 4%!!!

By: Jim

Jim — Wed, 26 Aug 2009 19:46:52 +0000

Mark, you’re not beating a dead horse at all, this was a good exercise for me. CapitalOne only puts the conversion rate on the paper statement (or the online PDF), so I looked at conversion rates of GBP/USD for that period. The tricky part about the statement is that it shows when the transaction was posted, not when it actually happened so I have two transactions on 20 July with different conversion rates. One transaction actually transacted 19 July and the other was actually 20 July, here’s how they compared:

19 July – Listed Rate = 0.61216, CapOne Rate = 0.614203455
20 July – Listed Rate = 0.60485, CapOne Rate = 0.607533414

In the 19 July rate, the difference was 0.3% in CapitalOne’s favor. In the 20 July rate, the difference was 0.44% in CapitalOne’s favor.

Incidentally, I had another 20 July transaction that got a 0.607679466 rate (same day, difference in time by about four hours).

I used the rates quoted from the site you mentioned and it appears to be within half a percent accuracy.

I hope that helps, please don’t hesitate to keep asking.

By: Mark

Mark — Wed, 26 Aug 2009 18:40:57 +0000

Jim – thank you. Sorry to beat the dead horse (my wife regularly refers to me with the “A” word), but I was looking at historical US/Euro rates for the first (2) weeks of Aug. and note that they fluctuated (officially) between approx. 1.413 and 1.442. I would be curious to know if, during this time, the CO exchange rates on your statement generally fell within this range. Below is a link to where I found this data – if you have any purchases that cleared on one of the days you were there, you could certainly compare it with one of the table entries to see how close it was, if it’s not too much trouble. I don’t know whether these table entries constitute a daily average, open or close, but I don’t think the rate varies that much (lately) intra-day, so your comparison will probably be within a half percent accuracy or better, I’d guess. Thanks again! http://www.exchange-rates.org/history/USD/EUR/T

By: Cheap Bastard

Cheap Bastard — Tue, 25 Aug 2009 06:37:12 +0000

Folks- The Charles Schwab card is better than the Cap One because it rebates 2% (cap one is only 1%).

By: Jim

Jim — Tue, 25 Aug 2009 04:03:56 +0000

Mark – As far as I can tell, the rates are consistent with published rates. In fact, on your bill, they tell you the rate they used on each transaction. I can’t confirm that the rates were identical because I didn’t compare them on a day to day basis (and I suspect they aren’t a daily match).

By: Mark

Mark — Mon, 24 Aug 2009 23:51:57 +0000

Jim – you are probably the best qualified to answer this, having just returned from Europe. I recently received my Capital One card and am headed to Europe in Oct. Can you tell me whether the exchange rates CO applied to your euro purchases was consistent with those published in the WSJ, cnbc.com, investor’s business daily, etc. or was actually higher? Customer svc. at CO told me that they would be using these same published rates, but others on this board seem to believe this isn’t true. I’d love to hear it straight from you.
Thanks!

By: Jim

Jim — Thu, 13 Aug 2009 09:29:47 +0000

I’m in Europe now (returning home tomorrow) and we’ve been using a Capital One card exclusively.

By: Cherie

Cherie — Thu, 13 Aug 2009 00:39:06 +0000

I’m hoping that you will do an August 2009 review of the currency conversion and fee rates that credit cards charge in foreign lands. I am going to Europe in October and wish to know which cc I should use.

Thanks!

By: Jim

Jim — Sun, 07 Jun 2009 22:22:23 +0000

I currently don’t have any relationship with capital one other than having a credit card. Read the USA Today article before throwing out such accusations please.

By: Bill

Bill — Sun, 07 Jun 2009 15:44:58 +0000

Jim Wang obviously works for or is connected to Capital One. Read his other posts. It has been well substantiated here by other posters that Capital One uses a higher conversion rate than its competitors thus making the “free foreign transaction fee” a misnomer. It appears that Wang has an ulterior motive.

By: Rebecca

Rebecca — Sat, 06 Jun 2009 22:39:28 +0000

Would love to know the same data for Canadian Banks – these extra fees really push my buttons!

By: Cheap Bastard

Cheap Bastard — Mon, 13 Apr 2009 07:54:12 +0000

Another thought… Capital One doesn’t do the conversion, do they? I think the conversion is done by visa, because visa charges 1% commission to Capital One (who then eats the fee).