How do you calculate exchange rates?

The American Express exchange rate varies on the type of currency conversion you select at the time of purchase. So, there’s a different Amex exchange rate between the U.S. dollar and approximately 80 other currencies, and they all fluctuate from day to day. Popular Amex currencies include the Canadian Dollar, the British Pound, the Euro, and the Mexican Peso.... read full answer

What you should know about the American Express exchange rate:

• The Amex exchange rate is automatically applied to international purchases charged to Amex credit cards.
• American Express FX International Payments customers can access their accounts online to get the day’s exchange rates. These rates are not available to the public, but you can enroll for free if you have a U.S. business bank account. An American Express card is not needed.
• Exchange rates between the U.S. dollar and all other currencies fluctuate daily. But because American Express does not publish them openly, it’s difficult to track them. Visa and Mastercard on the other hand, publish their exchange rates continuously.

It’s also useful to know that if you make a foreign transaction using your checking account, debit card or prepaid card, the exchange rates are the same as those used for credit cards.

The usual credit card exchange rate used for purchases made abroad is 2-4%. Credit card networks (i.e. Visa, Mastercard, American Express, and Discover) generally use conversion rates based on interbank rates they select from customary industry sources on the business day prior to the processing date.

Visa and Mastercard provide calculators you can use to get an indication of the rate you may receive when using your card abroad.... read full answer

Other things to know before using your credit card abroad:

When shopping abroad, a merchant may ask you if you would like to convert your credit card transaction from the local currency into U.S. dollars. This is called Dynamic Currency Conversion (DCC). This conversion rate is very expensive for the cardholder and should be avoided. Generally, when overseas merchants make this offer, they will use a conversion rate that is far higher than the actual going rate – as much as 7 percent higher.

When making foreign transactions, you should also be aware of foreign transaction fees. These fees are tacked on to any point-of-sale purchases outside of the United States, or purchases made through an internationally-based merchant. So, it’s best to use a credit card with no foreign transaction fees in this case. Some good examples include the Capital One Venture Rewards Credit Card and Chase Sapphire Preferred® Card.

No foreign transaction fee means that a credit card or debit card does not include a surcharge for international purchases. In other words, a consumer won’t be charged extra for using the card outside of the U.S. Foreign transaction fees are usually charged as a percentage of every transaction made abroad. Most issuers charge around 0%-3%, but many offer at least one card that does not come with a foreign transaction fee. Some issuers, such as ... read full answerCapital One and Discover, do not include the fee on any of their cards. Refer to the card’s terms and conditions to know for sure if it comes with a fee for foreign transactions.

It’s important to note that you don’t have to physically use a card outside of the U.S. to get hit with a foreign transaction fee. The fee can also apply when you buy something online from a company based in another country. So, getting a no foreign transaction fee card can be very helpful if you buy a lot of things from abroad. It also offers consumers the best value for currency exchanges. On average, a no foreign transaction fee credit card saves international travelers 7.14% over the average bank or credit union. When compared to foreign exchange company Travelex, the savings jump to 9.31%.

However, not all credit cards with no foreign transaction fee are equal when it comes to worldwide acceptance. The card’s network dictates where you can use it outside the U.S. Cards on the Mastercard networks are accepted by merchants in more than 210 countries and territories, while Visa credit cards are accepted in more than 200. Discover cards work in about 185 countries and territories, and merchants in 160+ countries and territories take American Express cards.