topic Re: Questions regarding Foreign Exchange Fees in Credit Cards

Questions regarding Foreign Exchange Fees

Anonymous — Thu, 07 Jan 2016 18:04:23 GMT

Sorry if this has already been asked, but my quick research online didn't really yield much.

I am going to England (my first international trip) in a couple months. For the occasion, I got the Chase Freedom and Chase Sapphire Preferred (to get both of their intro offers, plus the points from this trip will essentially buy me another vacation). Freedom charges a FTF while sapphire doesnt. Freedom has 5% back on "local commuter transportation" while Sapphire has 2% on all transportation.

To maximize my rewards, would it make sense to purchase train tickets with the freedom? I'll be buying them online while I am still in the states, so not sure if that necessarily means they will or wont charge a FTF.

If not, I also have a discover which also has 5% on ground transport and no FTFs.. Want to rack up rewards since this will be a pretty expensive trip, but also want to make sure I hit bonus spending requirements (4000 for sapphire and 500 for freedom)

Re: Questions regarding Foreign Exchange Fees

Anonymous — Thu, 07 Jan 2016 18:39:51 GMT

CSP 2x points is better than 5% depending on what you do with it.

Re: Questions regarding Foreign Exchange Fees

Ghoshida — Thu, 07 Jan 2016 18:53:16 GMT

@Anonymous wrote:
Sorry if this has already been asked, but my quick research online didn't really yield much.

I am going to England (my first international trip) in a couple months. For the occasion, I got the Chase Freedom and Chase Sapphire Preferred (to get both of their intro offers, plus the points from this trip will essentially buy me another vacation). Freedom charges a FTF while sapphire doesnt. Freedom has 5% back on "local commuter transportation" while Sapphire has 2% on all transportation.

To maximize my rewards, would it make sense to purchase train tickets with the freedom? I'll be buying them online while I am still in the states, so not sure if that necessarily means they will or wont charge a FTF.

If not, I also have a discover which also has 5% on ground transport and no FTFs.. Want to rack up rewards since this will be a pretty expensive trip, but also want to make sure I hit bonus spending requirements (4000 for sapphire and 500 for freedom)

(1) Chase Freedom and bonus categories: With ground transportation and other bonus categories, there are always some probability of the merchant coding being incorrect. In that case, you won't even get the 5%. It happens in the US, it can also happen outside. I'm also not sure if the 5% bonus applies to non-US merchants. Further, note that Chase has excluded Amtrak in the US for Freedom 5%. Is there a chance that they're similarly excluding other rail transports elsewhere? Possible. I'll not count on getting the 5%. One option is to buy a small valued ticket, wait for it to post, then click on the charge and see how much rewards you've got.

(2) Chase has 3% FTF. Even if you got all of the 5% of the bonus, you're essentially getting 2% which is the same as the Sapphire. I'd go with Sapphire here.

(3) It doesn't matter whether you're buying online or at the location. I've used online purchasing many times; unless they're selling tickets from their US office (e.g. like many airline companies do), it's still being sold from Europe and you'll be hit with foreign transaction fees.

(4) Regardless of what card you choose to use, do not blindly use the dynamic currency conversion from the merchant. Pay in the merchant's local currency, then let Visa / Chase apply their currency conversion rate. The merchant's conversion rate is usually worse for the consumer, as the intermediary charges their own margin over and above Visa / MC etc. If buying in / from England, pay with GBP then let Chase charge you in USD.

(5) Discover will be a great alternative; check whether Discover / Diner's Club is accepted though. If not, I'll first push all of CSP's spend then think about Freedom. In general I'd restrict Freedom to domestic use.

Re: Questions regarding Foreign Exchange Fees

Ghoshida — Thu, 07 Jan 2016 18:58:53 GMT

@Anonymous wrote:
CSP 2x points is better than 5% depending on what you do with it.

Maybe, but isn't that a very limited and very elaborate mechanism? I'm assuming you're mostly talking about high-valued airline redemptions.

If there were no FTF, Freedom would beat CSP on ground transportation this quarter.

Between Discover and CSP, 5% from Discover is essentially 10% with the double cashback this and the next quarter (though it depends on whether OP got it). While getting 2-3 cpp on UR points sounds manageable with some effort (no more Southwest), getting 5cpp or higher seems like a lot of effort.

On the other hand, Discover will be straightforward (once again, depending on Merchant coding and Discover honouring their 2x cashback promise).

BTW, if you redeem Discover cashback for gift cards (I do, for Enterprise, very often), then 5% will essentially be 15-20% CB in value; that'll be difficult to match even with high-valued airline redemptions (at least for me).

Re: Questions regarding Foreign Exchange Fees

redbeard — Thu, 07 Jan 2016 19:00:49 GMT

Like Ghoshida said, where you physically are has nothing to do with foreign transaction fees. Its where it is processed from.

I've almost always used either American Express or a debit card overseas. Even though its been a while, I didn't pay FTF with either of those. See if you have a card that doesn't charge them.

Dan

Re: Questions regarding Foreign Exchange Fees

mongstradamus — Thu, 07 Jan 2016 19:08:14 GMT

just a slight correction freedom 5% cashback =5x UR since you already have CSP, but with that being said the FTF may outweigh the benefit of Freedom over csp in that example.

Re: Questions regarding Foreign Exchange Fees

lg8302ch — Thu, 07 Jan 2016 19:26:36 GMT

My recommendation with this combo is to use CSP for the 2 x categories instead of Freedom 5% with FTF. But do consider to use Freedom and pay the FTF for the purchases that are eligible for the 5% compared to the regular 1 x on CSP without the fees. During the grocery 5% I have been in Europe and guess what I paid like crazy with my Freedom because I wanted these 5x point and did not care to pay the FTF It was a good deal for me.

Re: Questions regarding Foreign Exchange Fees

Anonymous — Thu, 07 Jan 2016 21:12:23 GMT

seems like everyone is more or less on the same page... If hitting the spending limits was a sure thing (which it is close to being since I made my gf an authorized user for the purposes of this trip), then I'm thinking it would be best to use discover for trains abroad (I don't have double cashback, I just have an older card that isn't even technically called DiscoverIT but it seems to have the exact same rewards scheme).. If I needed those extra few hundred bucks, then sounds like Sapphire is the way to go

As someone said above, the freedom will hurt me with the FTFs and using either Chase over the automatic 5% Discover (assuming it is accepted), would probably really only make sense if you transfer everything to Sapphire and then transfer those to specific expensive airlines. Seems a little too complicated for someone like me (who flies at most once per year)

Also, sounds like I shouldnt do any "pre-exchanges" abroad if given the option... Chase/Discover would have a better conversion rate for sure? You guys think I should come with actual currency as well? if so whats a cheap way to get that

Re: Questions regarding Foreign Exchange Fees

msaigh — Thu, 07 Jan 2016 21:15:11 GMT

OP, I travel to the UK 4-5 times a year.

I only use my Chase Sapphire Preferred and Citi Thank You Premier while there.

Your Discover card will be mostly useless in the UK, it's not accecpted in most places.

Where do you plan on getting your train tickets from? What city or cities will you be visiting?

Re: Questions regarding Foreign Exchange Fees

msaigh — Thu, 07 Jan 2016 21:26:44 GMT

OP, do not bring US currency to exchange, you will get kill by the exchange rate.

Most banks in the UK don't charge a ATM fee to withdraw money.

So the only charge will be what your bank charges, ATM fee + FTF, but it will be cheaper than exchanging US currency.

I just returned from London on 1-5-2016 and I paid an average of $1.47US to 1 British Pound.

Re: Questions regarding Foreign Exchange Fees

noobody — Thu, 07 Jan 2016 22:03:33 GMT

I do use freedom instead of CSP outide the country when gas is one of the 5X category, like now.
To me UR worth 2c, so even after 3% ftf , I am still ahead.

Re: Questions regarding Foreign Exchange Fees

Anonymous — Sun, 10 Jan 2016 06:07:54 GMT

train tickets I got from Virgin.. I paid with Sapphire; Discover seemingly didn't work anyways..

As for getting hard currency.. I use consumers credit union, which it seems a fair amount of people on here also use.. I know they refund ATM fees, but I'll need to look more into what the foreign fees entail..

Trip is slated to be London to York to Northeast to Edinburgh back to London

Re: Questions regarding Foreign Exchange Fees

azguy13 — Sun, 10 Jan 2016 06:21:48 GMT

@redbeard wrote:
Like Ghoshida said, where you physically are has nothing to do with foreign transaction fees. Its where it is processed from.

I've almost always used either American Express or a debit card overseas. Even though its been a while, I didn't pay FTF with either of those. See if you have a card that doesn't charge them.

Dan

Debit card overseas? Ballsy.

Re: Questions regarding Foreign Exchange Fees

msaigh — Sun, 10 Jan 2016 16:08:23 GMT

redbeard, What American Express card are you using overseas that doesn't charge an FTF. I need that card. AMEX has always charged me a 2.7% FTF if I use their card.

Re: Questions regarding Foreign Exchange Fees

NRB525 — Sun, 10 Jan 2016 16:17:43 GMT

@msaigh wrote:
redbeard, What American Express card are you using overseas that doesn't charge an FTF. I need that card. AMEX has always charged me a 2.7% FTF if I use their card.

PRG converted to no FTF in mid-2015

The Delta AMEX cards went to no FTF in 2014

SPG went to no FTF in late 2015

Some others like Platinum should be no FTF.

Cards like EDP, ED, BC, BCP, Hilton and many other AMEX still charge the FTF.

Re: Questions regarding Foreign Exchange Fees

msaigh — Sun, 10 Jan 2016 16:21:30 GMT

Thank you NRB525, When I leave "the garden" I will give one of those cards a hard look.

Re: Questions regarding Foreign Exchange Fees

NRB525 — Sun, 10 Jan 2016 16:24:28 GMT

@Anonymous wrote:
seems like everyone is more or less on the same page... If hitting the spending limits was a sure thing (which it is close to being since I made my gf an authorized user for the purposes of this trip), then I'm thinking it would be best to use discover for trains abroad (I don't have double cashback, I just have an older card that isn't even technically called DiscoverIT but it seems to have the exact same rewards scheme).. If I needed those extra few hundred bucks, then sounds like Sapphire is the way to go

As someone said above, the freedom will hurt me with the FTFs and using either Chase over the automatic 5% Discover (assuming it is accepted), would probably really only make sense if you transfer everything to Sapphire and then transfer those to specific expensive airlines. Seems a little too complicated for someone like me (who flies at most once per year)

Also, sounds like I shouldnt do any "pre-exchanges" abroad if given the option... Chase/Discover would have a better conversion rate for sure? You guys think I should come with actual currency as well? if so whats a cheap way to get that

You mean to say you and DGF are going to spend $1,500 in the quarter on gas and ground transportation? If so, perhaps route some of that to the Discover card in the US, and consider the Freedom card for some of the England trip charges? No guarantee they will code correctly in Category Spend, so that becomes something of a risk. But it would be a "fun travel activity" just to use the Freedom card sometimes, then see how those charges post. As soon as they show up on your Chase on-line account, you will know how they coded for bonus earnings, or not, and can adjust accordingly. It's not like AMEX MR points where it is two months before you get an indecipherable points earnings lump.

Regarding moving UR points, the Hyatt hotels are a good option also. You can find very valuable redemptions for UR transfers there, though you would have to be patient for the timing of the redemption. The point is, there can be other destinations for those UR points besides airlines. Marriott and IHG? Not good. Hyatt: Very good.