Personal Finance

Foreign Exchange Comparison (ATMs and Credit Cards)

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  • Jul 19th, 2012 10:33 am
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Foreign Exchange Comparison (ATMs and Credit Cards)

All right, there seems to be N number of people asking about foreign exchange rates concerning ATMs and credit cards.

I have been traveling for the last while through Europe and I am now currently in Hong Kong. Even though I have local currency cards, I decided to do a little unscientific experiment, comparing a few different ATM and credit cards. The currency rates fluctuated quite a bit in the last few weeks, as the HKD is tied to the USD.

A lot of places in Hong Kong do not accept credit cards, smaller purchases are mostly cash or Octopus based.

Cards used:

1. TD Canada Trust Access Card (Select Service Account)
2. Citizens Bank ATM Card (Global Chequing Account)
3. CIBC Visa Infinite Aerogold
4. RBC Visa Infinite Avion
5. American Express Business Gold Rewards

Exchange Rates according to the Bank of Canada (interbank rate):

Image

My first comparison will be rates I got from ATMs. I made the withdrawals on both cards very close to each other, within minutes.

Screenshots of Internet Banking from Citizens and TD:

Image

June 22: I made a HK$100 withdrawal using both cards. TD charged $15.00 for the transaction and Citizens Bank charged $15.10, while the exchange rate was 0.1489. The resulting markup is 0.73% and 1.4%, which is unusually low. I suspect that by the end of the day, the CAD had went up.

June 23: I withdrew HK$100 using Citizens Bank twice and HK$300 using TD. Citizens charged $15.10 for the transaction earlier in the day, and $15.13 for the later transaction and TD charged $45.75, with the interbank rate being 0.149165. The resulting markup from Citizens was about 1.2% and TD was 2.2%.

June 24: I withdrew HK$100 using Citizens twice again. Again, they charged $15.10 and $15.13 for the transactions during different times. The interbank was 0.1478, representing a markup of about 2.17%.

June 25: I withdrew HK$100 using Citizens and was charged $15.20 for the transaction. The interbank was 0.1494, representing a markup of 1.74%

June 26: I withdrew HK$100 twice using Citizens and was charged $15.20 and $15.11 for both transactions. The interbank was 0.1487, representing a markup of 2.21% and 1.61% respectively.

June 27: I withdrew HK$400 using TD and HK$100 using Citizens (TD posted it as June 29). TD charged $61.04 and Citizens charged $15.11, the interbank was 0.1494, representing a 2.14% and 1.13% markup respectively.

Conclusion: It seems that Citizens Bank has a better overall markup rate over TD Canada Trust. However, I am not convinced that these results are 100% accurate as it seems that the banks do not change their exchange rates in real-time, but reset it everyday at a certain time, and because of movements during the day, the end of the day rate is not a perfectly accurate comparison. But it seems that the rates provided by ATMs are much better than your average FX place.

Credit Cards:

Now, I limited my Canadian credit card use in Hong Kong as many stores give discounts (10% or 20%) for certain local cards, so I made small purchases to test out the FX rates. One thing about CC rates, is I've been told they are calculated at the time of posting the transaction and not when the transaction is made.

AMEX Business Gold:

Image

1. June 27, HK$148.00 purchase costs $22.71, gives an exchange rate of 0.15344. Interbank is 0.148786, as that was the last closing business day rate. The markup is 3.1%.

2. June 27, HK$662.00 purchase costs $101.57, giving an exchange rate of about 0.1534. The markup is 3.1%, same as above.

3. June 27, HK$199.80 costs $30.66, also yielding the same results.

4. June 28, HK$270.00 costs $41.43, also yielding the same results.

CIBC Aerogold Visa Infinite:

Image

1. Transaction on the 27th, posted on the 29th. HK$275.00 is $41.96, giving an exchange rate of 0.15258. Interbank was 0.1494, giving a markup of 2.14%

2. Transaction on the 28th, posted on the 29th. The exchange rate is 0.1526 (presumably because of different posting time), also giving a markup of about 2.14%

RBC Avion Visa Infinite:

Image

1. Transaction posted on the 22nd. The exchange rate is 0.1525 and the interbank is 0.148987, giving a markup of 2.35%.

2. This is a special transaction. I made the actual transaction on the 27th, but the retailer's terminal actually gave me the option whether to charge my credit card in CAD or HKD (they provided two amounts on the screen). I opted for the CAD amount, the actual transaction was HK$47.90, giving a rate of 0.1550, with the interbank rate at 0.1487, a whopping 4.2% markup. What an idiotic choice that was.

Conclusion: It seems that Visa's rates are excellent and AMEX lags behind, as most of these purchases were on the same shopping trip. I have also learned that if given the option, ALWAYS let the CC company do the conversion. Not to mention, the points will offset the FX fees.
35 replies
Deal Fanatic
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Dec 25, 2003
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GVR
Thanks, good info.
General Radek had some good ideas.
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Mar 23, 2004
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Markham
i thought u cancelled your rbc infinite?
「もし、奇跡を起こせたら……」
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Aug 18, 2005
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I suspected that much of this was true, but it's great to see the actual proof.
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Jan 31, 2006
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tng11, what ATM network you used in HKG when you used your Citizens Bank ATM Card (Global Chequing Account)? Is that any ATM network?
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Nov 23, 2005
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I've done this too myself and found from my last few trips to EU that it's better to use CC's (VISA), then exchange money here at the bank and take the currency there.

Mind you, I still had to exchange some money, majority I spent on CC. When comparing rates, my VISA exchange on Pound sterling was 1.80-1.81 while the banks wanted 1.83-1.85.
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cgtlky wrote:
Jul 3rd, 2009 8:10 am
tng11, what ATM network you used in HKG when you used your Citizens Bank ATM Card (Global Chequing Account)? Is that any ATM network?
It was the PLUS system, so it works at basically every ATM in the territory (except for a few small banks that only take local cards), but there's an ATM every few steps anyways.

I also used the Citizens card in Macau yesterday and interestingly enough some machines refused to let me withdraw Macau Patacas but I could withdrew Hong Kong dollars from them.

The best place to exchange money in Hong Kong though is to bring large Canadian notes ($50s and $100s) and change them at major banks like HSBC or BOC, if you change a sufficient amount the HK$100 commission will beat the ATMs. (I don't pay the fee as I have accounts with them)
Deal Addict
Dec 10, 2007
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I check that both my CC (MBNA platinum plus & TD visa finite) will charge an extra 2.5% + conversion, which kind of sucks. Is there any CC that doesn't charge that extra 2.5% ?
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Mar 8, 2006
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Montreal
I got the best value when using HSBC debit card at the local HSBC ATMs.
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Sepiraph wrote:
Oct 1st, 2010 7:02 pm
I check that both my CC (MBNA platinum plus & TD visa finite) will charge an extra 2.5% + conversion, which kind of sucks. Is there any CC that doesn't charge that extra 2.5% ?


No ....

Every time you exchange money, you will be dinged a fee of some sort.
Sr. Member
Aug 25, 2005
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Nice post. Do you happen to know if the markups on credit card foreign currency conversions has changed since your initial posting?
Some credit cards seem to freely post (PC Mastercard) while it seems harder to find with others (i.e. Amex)....

PC Mastercard: Foreign Currency Conversion - 2.5%
For foreign currency transactions, the foreign currency conversion markup percentage charged is 2.5% of the amount of the charge or credit transaction as converted first into U.S. dollars and then into Canadian dollars at the current exchange rates on the transaction date.
(http://pcfinancial.ca/english/credit-ca ... mastercard)
[OP]
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Probably hasn't changed. As my test shows, it's not an exact science because of the intraday fluctuations, and today's currency market seems more volatile than when I posted this.

I now know that AMEX's conversion fee is higher because they convert the foreign amount to USD first, then to CAD, resulting in a higher exchange fee.
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redac wrote:
Aug 7th, 2011 11:05 pm
Nice post. Do you happen to know if the markups on credit card foreign currency conversions has changed since your initial posting?
Some credit cards seem to freely post (PC Mastercard) while it seems harder to find with others (i.e. Amex)....

PC Mastercard: Foreign Currency Conversion - 2.5%
For foreign currency transactions, the foreign currency conversion markup percentage charged is 2.5% of the amount of the charge or credit transaction as converted first into U.S. dollars and then into Canadian dollars at the current exchange rates on the transaction date.
(http://pcfinancial.ca/english/credit-ca ... mastercard)

Well that's stupid. Why convert it to US 1st?


Anyways, if anyone is curious PCF charge $2/withdraw + 2.5% for foreign withdrawls. I called today and the guy said people generally have more luck from "Plus" machines.

ING has no fees for foreign withdraws. It's whatever the foreign bank charges. Although when talking to them on the phone, I for the impression that you can use "debit" with the ING card as well... Not sure how this works since Interac is CDN only...

PCF said no way you can use debit. Only ABM withdraws, which makes sense since Interac is a different network than VISA/MC debit.

Maybe someone should make a sticky and a master list of what bank cards work where, or even just general rates?
I"m sure a lot of people would find it helpful.
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IceBlueShoes wrote:
Aug 8th, 2011 12:47 am
Well that's stupid. Why convert it to US 1st?


Anyways, if anyone is curious PCF charge $2/withdraw + 2.5% for foreign withdrawls. I called today and the guy said people generally have more luck from "Plus" machines.
I believe it's $3 plus the exchange fee. The PCF card is basically a CIBC card in different clothing, so it should work with PLUS system.

ING has no fees for foreign withdraws. It's whatever the foreign bank charges. Although when talking to them on the phone, I for the impression that you can use "debit" with the ING card as well... Not sure how this works since Interac is CDN only...
On their own site it says the fee is $2 for international withdrawals. I think the "debit" might work in the US only, as some Canadian banks can use the NYCE network IIRC. It may also be the "Accel" logo at the back of the card that works for US debit. Otherwise, the only debit cards that can be used internationally are the Maestro equipped cards from BMO and National Bank.
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Aug 28, 2010
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IceBlueShoes wrote:
Aug 8th, 2011 12:47 am
Maybe someone should make a sticky and a master list of what bank cards work where, or even just general rates?
I"m sure a lot of people would find it helpful.
The Consumer Agency of the federal government used to have this is a table. However I can't find it in their website any more.

Here's a link to an old version (December 2008): http://web.archive.org/web/200906181321 ... ab-eng.asp


Some of these number may have changed a bit, but from glancing at them I think many of them are roughly correct. The exchange rate on credit cards is 2.5% for nearly all of them.
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