Foreign Exchange Comparison (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.
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):
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:
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.
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:
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:
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:
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.