Which Cards Give the Best Exchange Rate on Foreign Transactions?

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Which Cards Give the Best Exchange Rate on Foreign Transactions?

Million Mile SecretsWhich Cards Give the Best Exchange Rate on Foreign Transactions?Million Mile Secrets Team

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When you travel abroad, you’ll save money by using cards that don’t add foreign transaction fees.  Otherwise you’ll be charged an extra ~1% to ~3% on each purchase!

But did you know you’ll usually pay a different exchange rate depending on the card issuer?  Milevalue, One Mile at a Time, and View From the Wing suggest MasterCard offers the best rates.

So I decided to run an experiment with the help of a Million Mile Secrets team member who recently traveled to Canada.

Which Cards Give The Best Exchange Rate On Foreign Transactions
Traveling Outside the US? You’ll Get a Better Exchange Rate With Certain Cards!

I’ll let you know what we found out!

Are All No-Foreign-Transaction-Fee Cards the Same?

Link:   MasterCard Currency Conversion Tool

Link:   Visa Currency Conversion Tool

Even though there are lots of great cards that don’t charge foreign transaction fees, including some with no annual fee, there is a difference in the exchange rate you’ll pay between certain cards.

And if you spend a lot overseas, using cards with a better exchange rate can mean a substantial savings.

Which Cards Give The Best Exchange Rate On Foreign Transactions
Be Careful! Some Cards Charge More for Currency Conversion Than Others!

While Visa and MasterCard offer currency conversion tools online, folks report there’s no guarantee they’ll use those exact rates on the date of your transaction.

I wanted to see for myself, so I asked a team member to visit a store in Canada to make purchases of the same amount, at the same time, with different cards.  And see which issuers gave the best (and worst!) exchange rates!

The results are in!

MasterCard Comes Out on Top!

As folks have suspected, MasterCard had the most favorable rate.

Here are the cards we tested:

Note:   We used both personal and business cards from American Express and Chase to see if that made a difference.  It did NOT.

Which Cards Give The Best Exchange Rate On Foreign Transactions
Six $25 (Canadian) Transactions, Each With a Different Card. Thank Goodness for Patient Cashiers!

Each transaction was for 25 Canadian dollars.

1.   American Express Mercedes-Benz Platinum

American Express converted 25 Canadian dollars to $19.22 using the American Express Mercedes-Benz Platinum card.  That works out to an exchange rate of $1 = ~1.3007 Canadian dollars.

Which Cards Give The Best Exchange Rate On Foreign Transactions
The Exchange Rate With an American Express Personal Card Was 1 US Dollar = ~1.3007 Canadian Dollars

2.   American Express Starwood Preferred Guest (Small Business

Using an American Express small business card did NOT make a difference in the exchange rate.  The American Express Starwood Preferred Guest Small Business card rate was the same as the American Express Mercedes-Benz Platinum, $1 = ~1.3007 Canadian dollars.

Which Cards Give The Best Exchange Rate On Foreign Transactions
Using an AMEX Small Business Card Resulted in the Same Exchange Rate as an AMEX Personal Card

3.   Chase Ink Plus

The Chase Ink Plus is a Visa small business card, and the 25 Canadian dollar purchase posted as $19.28.  That’s a rate of $1 = ~1.2967 Canadian dollars.

This was the worst rate of the experiment!

Which Cards Give The Best Exchange Rate On Foreign Transactions
Not As Good a Rate! The 25 Canadian Dollar Purchase Costs More With the Chase Ink Plus Visa

4.   Chase Sapphire Preferred

Using a personal Visa card did NOT make a difference.  The Chase Sapphire Preferred also posted the transaction as $19.28.

Which Cards Give The Best Exchange Rate On Foreign Transactions
There Was No Difference Between Chase Personal and Business Visa Exchange Rates

5.   Citi Prestige

The Citi Prestige is a MasterCard, and it had the best exchange rate.  The 25 Canadian dollar transaction posted as $19.14, or a rate of $1 = ~1.3061 Canadian dollars.

Which Cards Give The Best Exchange Rate On Foreign Transactions
The Citi Prestige MasterCard Wins!

6.   Discover it

The Discover it card came in 2nd place for the best exchange rate.  It charged $19.17 for the 25 Canadian dollar purchase, or a rate of $1 = ~1.3041 Canadian dollars.

Which Cards Give The Best Exchange Rate On Foreign Transactions
Discover Is a Close 2nd to MasterCard With a Very Similar Exchange Rate

Putting It All Together

In summary, here’s a list of cards and the rates they charged (in order of best to worst):

Card Name25 Canadian Dollars Converted to US DollarsExchange Rate ($1 USD to Canadian Dollars)
Citi Prestige® Card $19.14~1.3061
Discover It®$19.17~1.3041
Starwood Preferred Guest® Business Credit Card from American Express$19.22~1.3007
The Platinum Card® from American Express Exclusively for Mercedes-Benz$19.22~1.3007
Ink Plus® Business Credit Card$19.28~1.2967
Chase Sapphire Preferred® Card$19.28~1.2967

To compare, I checked the Visa and MasterCard online currency conversion tools.  MasterCard’s tool did not work for the transaction date, but the Visa tool returned the same rate as the Chase Sapphire Preferred and Chase Ink Plus.

That said, there’s no guarantee these results will apply for every card and with every currency or date.  But I was happy to see for myself what other bloggers have already suggested – MasterCard will likely give you the best exchange rate when you travel overseas.

Remember to Factor in Bonus Categories

It might be worth paying a slightly poorer exchange rate if the card you’re using earns bonus miles or points for a purchase.  Or if you prefer certain types of miles or points.

Especially for smaller purchases!  Let’s look at an example.

Suppose you go out for dinner in Toronto and spend 75 Canadian dollars at a restaurant.  And you’re deciding between using your Chase Sapphire Preferred Visa or Citi Prestige MasterCard.

Both cards earn 2X points on dining.  And (using the sample exchange rates above) you’d pay:

  • ~$57.84 using the Chase Sapphire Preferred ($1 = ~1.2967 Canadian dollars)
  • ~$57.42 using the Citi Prestige ($1 = ~1.3061 Canadian dollars)

That’s a difference of 42 cents (not much!).  And with either card, you’d earn ~115 points.  So it really depends on which program you prefer to earn points in, though I consider Chase Ultimate Rewards points to be most valuable.

That said, if you’re spending hundreds or thousands of dollars, especially in non-bonus categories, it usually makes more sense to use the card with the better exchange rate.

The Reason Visa Seems to Charge a Bit More

According to some, Visa charges ~1% more because, unlike MasterCard, they guarantee the rate on the day of your transaction.  You might feel more comfortable knowing how much you’ll pay in US dollars when making a purchase internationally.

On the other hand, the transaction doesn’t post right away.  So in that time, the exchange rate can go up or down.  So Visa might lose money due to currencies changing values.  The extra bit they charge is to guard against that.  But what you care about is if YOU pay more! 🙂

Bottom Line

We experimented with different cards with overseas transactions of the same amount, at the same time, to see which issuers gave the best exchange rates.  None of the cards tested add foreign transaction fees:

The best exchange rate (as other folks have reported) was with MasterCard.  And the least favorable was with VisaDiscover and American Express were in between.

This isn’t a guarantee you’ll always get the best or worst exchange rates with these cards.  But the results are in line with what others have suggested – that MasterCard is typically the  card with the best rate for overseas purchases.

For smaller purchases, the difference in exchange rates might be insignificant – so choose the card that earns your favorite points (especially if it awards category bonus points for your purchase).

Have you noticed a difference between card exchange rates when you travel?  Please share your experiences in the comments!

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Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

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I’ve been using Capital One Quicksilver (Mastercard) for about a year now, for foreign transactions only. I have used it in Dubai for two weeks and a lot in Canada, for eight months. No transaction fees! Best exchange rate!

I usually check the exchange rate at the time of the transaction and it’s often equal to the rate Siri or Google give you. It has saved me tons of money so far.

I’ve had to exchange money for situations where I wasn’t able to use a credit card and I ended up paying a lot more, just because I was doing an exchange, even with the bank’s best rate.

What’s even more satisfying, is I get unlimited 1.5% cash back on all those foreign transactions too!

How can I get Euros before leaving the USA and turn our Euros back into Dollars on our return?

Recently we went to France where we needed Euros to pay the BnB who didn’t take credit cards. At the time the online rate was $1.19= 1 Euro. The only place I knew to get cash was at the Airport or an ATM. I had NO way to find an ATM so I paid $1.39 per 1 Euro, plus a 3.0 Euro processing fee. I have learned that Google Maps will find ATMs in France.

We hit an additional snag. Not all of our credit card companies processed our notice of travel to Iceland and France. Some ATMs and automated toll booths would not process our credit cards. We were fortunate to have Master, Visa, and Discover with us. the Master Card worked in the toll booths but not the ATMs. We had to call the 1-800 number to have the credit card companies to annotate our travel status.

We tried to spend our left over Euros prior to coming home, but ended up with 30 Euros in paper and 7.50 Euros in coins. We found a Currency Exchange in the International Mall in Tampa. The buy back rate was $1.08 for one Euro plus a $3 transaction fee. The 1 and 2 Euro coins would only fetch $0.60 per Euro and the remaining 2.50 Euro 0.50 cent coins would net $0.29 because they were exchange by weight.

I will really appreciate if you can suggest which card should I use from below list when I travel to India.

Citi AAdvantage Platinum
Chase Ink Business Preferred
United Mileageplus explorer

Is this calculated by payment processor or by card issuer? TPG had something on this last year and it varied by card issuer.

Interesting. I’ve seen another small sample that showed MasterCard and Visa winning about the same % of the time (actually Visa edged out MasterCard by a little).

Both MasterCard and Visa are supposed to use forex rates from the settlement date for your transaction. American Express uses a forex rate from the date the transaction is processed by the merchant. That probably doesn’t make a big difference except during times of events like Brexit votes. : )

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