topic Re: Cap1 foreign exchange rates in Credit Cards

Cap1 foreign exchange rates

MrDisco99 — Fri, 19 Apr 2019 16:11:17 GMT

Cap1 likes to brag that they don't charge FTFs. But has anyone actually looked at the currency conversions?

I did recently, and was surprised to find Cap1 appears to be adding an extra 3.5% or so after the currency conversion.

I even checked the conversion on the Master Card website (which also lets you specify the date), and while their conversions were slightly higher than Morningstar, it wasn't by much, and certainly not 3.5% higher.

My recent transactions:

3/16 UKP 32.80 -> $45.33 ($43.80 on MC currency converter)

4/11 UKP 18.00 -> $24.27 ($23.59 on MC currency converter)

4/12 EUR 222.18 -> 258.58 ($251.60 on MC currency converter)

4/18 UKP 12.00 -> $16.15 ($15.66 on MC currency converter)

All of these are about 3.5% higher than the MC conversion rate. Is Cap1 inflating their conversion rates?

Re: Cap1 foreign exchange rates

Anonymous — Fri, 19 Apr 2019 21:01:40 GMT

Is the merchant doing a DCC (dynamic currency conversion) without you noticing? There is a fee associated with that, from the merchant's end. To avoid this (if it is the problem), always pay the bill/total due in local currency, never have the merchant convert to USD.

Re: Cap1 foreign exchange rates

simplynoir — Fri, 19 Apr 2019 21:12:55 GMT

@Anonymous wrote:
Is the merchant doing a DCC (dynamic currency conversion) without you noticing? There is a fee associated with that, from the merchant's end. To avoid this (if it is the problem), always pay the bill/total due in local currency, never have the merchant convert to USD.

This is what it sounds like to me, too.

Re: Cap1 foreign exchange rates

Anonymous — Fri, 19 Apr 2019 22:19:46 GMT

Yes. Conversion (non-DCC) is done by the network, not by the issuer, and then the issuer adds on a FTF is applicable. If you were really charged in local currency, and you see these exchange rates, there is an issue!

Also, make sure you are checking the rate on the posting date, not the date of transaction.

Re: Cap1 foreign exchange rates

Shadowfactor — Fri, 19 Apr 2019 23:25:23 GMT

Its been over a while since I had a cap 1 card, but I always thought the exchange rate was fair.

I compared all the banks in a previous thread about a similar topic and if memory serves me correctly capital one was about average.

Re: Cap1 foreign exchange rates

MrDisco99 — Fri, 19 Apr 2019 23:40:49 GMT

Yes I am checking the rate on the date of the transaction. The MC exchange rate site lets you do that. It's actually pretty cool how far back you can go.

So one other thing these have in common is they are all PayPal transactions. According to PayPal I was charged in the local currency (pounds, euros), but is it possible PayPal is doing their own conversion? I got alerted from Cap1 that it was a foreign transaction, so I'm honestly not sure what's going on.

The thing that made me suspect Cap1 was that the fine print on the MC site says "Your bank may or may not use Mastercard foreign exchange rates to bill you." This made me think maybe Cap1 is skimming on the exchange rate and making it look like there's no FTF when there is.

EDIT: I just checked an old but similar PayPal transaction paid with my Amex card. The converted posted amount is less than 0.1% off from the MC exchange rate that day.

Re: Cap1 foreign exchange rates

fuzzle — Sat, 20 Apr 2019 00:10:43 GMT

wouldn't be surprising if PayPal tricked you. Is there anything noted in the cap1 transaction indicating it was not in dollars?

Re: Cap1 foreign exchange rates

Anonymous — Sat, 20 Apr 2019 00:45:49 GMT

It’s PayPal thats doing it.

https://roman-reviews.com/how-disable-paypal-currency-conversion-save-money-fees/

PayPal doesn’t have this option for Discover, it’s probable they don’t have it for Amex either and they for some reason don’t try to force their own exchange rate on you but VISA and MasterCard are all set to be converted by PayPal by default - you have to turn it off for every card.

Re: Cap1 foreign exchange rates

MrDisco99 — Sat, 20 Apr 2019 01:43:26 GMT

Wow... Thanks!

Re: Cap1 foreign exchange rates

Anonymous — Sat, 20 Apr 2019 02:13:11 GMT

No problem!

I found out about it a few years ago when I signed up for my VPN and noticed that the currency conversion from XE was much lower than what I got charged. So annoying that it’s automatically the default for any card you add to PayPal.

Re: Cap1 foreign exchange rates

Anonymous — Sat, 20 Apr 2019 16:32:23 GMT

@MrDisco99 wrote:
Yes I am checking the rate on the date of the transaction. The MC exchange rate site lets you do that. It's actually pretty cool how far back you can go.

Sounds like the issue has been identified, but it's the rate on date of posting you need, not the rate on date of transaction.

Re: Cap1 foreign exchange rates

joltdude — Sat, 20 Apr 2019 16:51:54 GMT

Im a big fan of using Discover with Paypal when possible..Also means Disco is accepted at more places... esp when currency conversion is involved...