This site is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as CreditCards.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. What is written in the article is the editor's opinion.
- New App Alert: Mercez Helps You Pick the Right Card to Use Abroad
- Booking Martinique: My Experience With Citi Prestige Concierge and 4th Night Free Benefit
Lots of cards advertise “no foreign transaction fees” which means they don’t add extra fees to the amount they convert.
But what’s interesting is not all banks convert cash at the same rate.
The amounts can add up, especially if you spend a lot (or live) abroad.
Rates according to Mercez
For simplicity, let’s look at the exchange rate of 1000 Euros into dollars.
According to Google, you’d spent ~$1,088 if you on a purchase of 1000 Euros.
A 3% foreign transaction fee (FTF) on that amount is an extra ~$33, so it’s easy to see why people want to avoid paying them.
Even if there are no FTFs, the bank that issues your card won’t necessarily give you the going exchange rate.
Mercez is a slim iPhone app that lets you plug in your cards, and tells you the final cost in USD of various foreign currencies.
Because I’m heading to Europe soon, and paying for a hotel room in Martinique (it’s on the Euro because it’s a French island), I wanted to see which could would give me the best rate.
I plugged in:
- AMEX EveryDay Preferred (which includes the card’s ~3% FTF)
- Chase Sapphire Preferred
- Citi Prestige
- Discover it
All of the cards have different bank exchange rates.
The runner-up was Discover it, which met the current exchange rate almost to the cent.
Update 12/13/15: I confirmed via Twitter with Mercez this issue has been resolved. I still recommend checking Mercez for large purchases abroad, or if you plan on staying overseas long-term.
But surprisingly, the Chase Sapphire Preferred actually had the worst bank exchange rate – a full $41 more than Citi Prestige.
That’s because each card handles the exchange based on different issuers.
For example, the Chase Sapphire Preferred transfers are processed by Visa, Citi Prestige is processed by MasterCard, while Discover and AMEX handle the exchange for their own cards.
Even still, using a credit card for foreign purchases is still better than exchanging cash.
In this case, you’d spend a full $140 more than the best credit card exchange rate (Citi Prestige) if you had to exchange your US dollars into Euros.
While I like the idea of “no foreign transaction fees,” that’s only the beginning. Each bank has its own exchange rate. And who processes the transaction also influences the final amount you’ll pay (Visa, MasterCard, AMEX, or Discover).
The Mercez app for iOS is all of ~9MB, so it hardly takes up any space on your phone. It supports nearly every card you can think of, and tells you this information for whatever amount you want to spend.
It’s worth a download if you spend a lot overseas, or if you plan an extended trip. Lots of transactions can really add up over time.
Anyway, thought this would be interesting to share. For real road warriors, I’d call this app a must-have.
Of course, it doesn’t take into account bonus points on certain categories. So even if you want a certain type of points, you still might be curious about how the bank exchange rate compares overall.
BEST Current Credit Card Deals
- Amex Business Platinum Card - 100,000 Amex Membership Rewards points! - If you spend a lot, you can end up with 125,000 points after meeting the spending requirements.
- Chase Ink Cash - $500 CASH! (50,000 Chase Ultimate Rewards points) - Useful 5X for phones and office supplies and NO annual fee! COMPARE HERE.
- Blue Business Plus Amex - 10,000 Amex Membership Rewards points - The BEST card for 2X on everyday spending.
- Discover it® Cashback Match™ Card - $50 after 1st purchase within 3 months of account opening - Earn $600 cashback the 1st year.