Bank that doesn't charge 2.5% overseas conversion fee

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tcpdump

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Master Geek

Topic # 106901 2-Aug-2012 14:56
Hi, Are you aware of any bank that will offer a credit card that doesn't charge 2.5% when paying in foreign currency? I've checked the big banks (ASB, ANZ, BNZ, Kiwibank, Westpac) and all of them do it. The One Smart AirNZ card doesn't have this commission but it's a hassle that the loading of the funds take at least a business day. Thanks.

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Reply # 666268 2-Aug-2012 15:01
I think you'll find they all do. As we all know, it costs 2.5% of the total dollar amount to cover the cost of running a computer for a microsecond. Bigger numbers make the computer think harder you see. iPad + iPhone 4S + 2degrees 3G data 4tw! These comments are my own and do not represent the opinions of 2degrees.

k14

204 posts

Master Geek

Reply # 666270 2-Aug-2012 15:01
The onesmart card uses an inferior exchange rate to the banks so I found that in the end that even though onesmart was still a fraction cheaper it usually worked out at less than 0.5% savings over the better exchange rate from the banks plus the 2.5% exchange fee.

ajobbins

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Reply # 666275 2-Aug-2012 15:07
Not in NZ. Some overseas cards don't (Eg. Some of the top tier Citibank cards in the US don't) Twitter: ajobbins

tcpdump

233 posts

Master Geek

Reply # 666297 2-Aug-2012 15:22
k14: The onesmart card uses an inferior exchange rate to the banks so I found that in the end that even though onesmart was still a fraction cheaper it usually worked out at less than 0.5% savings over the better exchange rate from the banks plus the 2.5% exchange fee. When I initially checked the exchange rate it was identical to the one that ASB had. This, however, is no longer the case. After some calculations it seems that you may not save anything for small purchases (few hundred dollars) and maybe you save $50 for $10,000 spent. But if the rate drops slightly you may not save anything. Thanks for pointing this out, really appreciated.

Oblivian

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Ultimate Geek

Reply # 666317 2-Aug-2012 15:54
As pointed out its better to only use CC for big ticket items should you find any. As a general rule work out how much living costs are, and allocate yourself a daily limit.. get that out in cash. You pay the selling fee and a $12 charge for over-counter usually. If you get short, take the hit on the $10 fee or whatever on eftpos and get more cash (with a conversion naturally). The $12 usually works out a lot better than 2.5% of the cash :) If its australia, you claim back any tax on items totalling $300+ from 1 store at the airport on the way home anyway, they will credit straight back to a CC so keep that in mind when working out pricing.

billgates

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Reply # 666318 2-Aug-2012 15:56
ASB is is the lowest I have found with currency conversion fees @ 2.1% Microsoft\|Outlook\|Skydrive\|Windows Live Admin Center\|Skype\|Office Web Apps\|Office 365\| Windows Phone\|Windows 8\|Xbox\|Hyper-V\|Office2013\|Bing\|Security Essentials\|Server 2012

tcpdump

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Master Geek

Reply # 666319 2-Aug-2012 15:58
That works out just fine as I have everything with ASB :)

bazzer

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Reply # 666361 2-Aug-2012 16:33
Oblivian: As pointed out its better to only use CC for big ticket items should you find any. As a general rule work out how much living costs are, and allocate yourself a daily limit.. get that out in cash. You pay the selling fee and a $12 charge for over-counter usually. If you get short, take the hit on the $10 fee or whatever on eftpos and get more cash (with a conversion naturally). The $12 usually works out a lot better than 2.5% of the cash :) If its australia, you claim back any tax on items totalling $300+ from 1 store at the airport on the way home anyway, they will credit straight back to a CC so keep that in mind when working out pricing. How do you figure that? If the CC uses a straight % it shouldn't matter if you use it for large or small purchases. Considering the bank charges at least 1% commission anyway (or a rubbish rate and no commission) and you might get rewards on your CC (e.g. 1% on ASB Visa Platinum), other than the fact that cash locks in a good (or bad!) rate, the extra cost of using your CC is negligible. If you withdraw a lump sum with a fixed cost (i.e. $10/$12) then the size of the withdrawal affects the overall cost ($10 on $100 withdrawal compared to $10 on $1000).

tcpdump

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Master Geek

Reply # 666364 2-Aug-2012 16:40
Forgot about the 1% in true rewards. In this case, the ASB actually is better!

rayonline

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Ultimate Geek

Reply # 666366 2-Aug-2012 16:41
Money changers may not but their rate may not be as good ... HSBC Premier Free exchange of foreign currency offered through all HSBC Branches worldwide. Eligibility http://www.hsbc.co.nz/1/2/hsbcpremier/eligibility

Amosnz

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Geek

Reply # 666380 2-Aug-2012 16:51
Gem Visa do 1.25% International transaction fee, and 6 months interest free on any purchases over $250.00 http://www.gemvisa.co.nz

Oblivian

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Ultimate Geek

Reply # 666383 2-Aug-2012 16:53
bazzer: How do you figure that? If the CC uses a straight % it shouldn't matter if you use it for large or small purchases. Considering the bank charges at least 1% commission anyway (or a rubbish rate and no commission) and you might get rewards on your CC (e.g. 1% on ASB Visa Platinum), other than the fact that cash locks in a good (or bad!) rate, the extra cost of using your CC is negligible. If you withdraw a lump sum with a fixed cost (i.e. $10/$12) then the size of the withdrawal affects the overall cost ($10 on $100 withdrawal compared to $10 on $1000). I did say general rule.. its up to each individual of course. Based on say more than a 4hr stopover ($100 withdrawl?!?!?) where it would come into effect.. IE for more than 4-days to a week I take at least $600 foreign. (where the $12 is already cheaper than 2.5% of that) The 2.5% on CCs is also added after the conversion rate applied if I recall.. and any additional fees you may be hit with from foreign banks for processing the transaction in the machine. Which can vary greatly depending. So it can vary either side of that Each to their own, I just find it easier to avoid spending more than you hope with folding. Mate I went with last time had a set amount he was targeting for.. and was quite shocked to see how much extra it was ontop of that by using the card for everything once the CC bill come in (remembering CC transactions can take up to 2 weeks to be applied at the rate on that day)

sbiddle

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Reply # 666474 2-Aug-2012 19:22
There are two parts to the fee - the Mastercard/Visa fee and the foreign exchange rate and conversion fee. Mastercard/Visa take (from memory) just over 1% before it reaches your bank so reastically no bank could offer a 0% conversion as they would be losing money on the deal. *Need help configuring your Linksys ATA or IP Phones for New Zealand? Check my blog post

Amosnz

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Geek

Reply # 666487 2-Aug-2012 19:39
I used to have a 28 degrees card in Australia... they definately had no intl fees\charges. http://www.28degreescard.com.au/features.html?gemid2=May11-28deg-hp-heroMore

richms

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Reply # 666512 2-Aug-2012 20:19
Gem visa are somewhat misleading with their claims of interest free IME. I am about to put a complaint thru to them about it, but if they dont do anything I cant really do much since they are not a bank. When the loaded card wasnt charging the fee, it worked out quite well, but all of them seem to convieneanly choose a rate thats not the same as the rate that the rates thing at work is spitting out. Paypal choose even worse rates if you allow them to convert but that means no % fee from the NZ bank. Richard rich.ms

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