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Capital One may start passing along credit card foreign exchange fees to the consumers at some point in the near future.
This could deal a major blow to credit card consumers who have relied on Capital One credit cards as being one of the last major credit card issuers that still doesn’t charge foreign exchange fees.
Credit card issuers started charging foreign exchange fees years ago to make up for the fees that MasterCard and Visa charge them, and many credit card issuers add an additional fee on top of this.
Only a few major issuers, like Capital One and Discover, still do not currently charge foreign exchange fees.
The credit card foreign exchange fees for several major credit card issuers are listed below.
0% – Capital One
0% – Discover
2% – American Express
2% – Pulaski Bank
3% – Citi Cards
3% – Chase
3% – Bank of America
3% – HSBC
3% – Providian
Capital One and Discover are 2 of the last major issuers that still don’t charge foreign exchange fees.
With Capital One to possibly change their policy in the near future and pass along the foreign exchange fees they are charged by Visa and MasterCard, this leaves Discover Credit Cards as one the only available options for many consumers, and Discover credit cards are currently only accepted in Canada, Central America, Mexico, the Caribbean and China.
The only option for many consumers will be to hope that there are still some smaller credit card issuers that will continue to not charge foriegn exchange fees for purchases outside of the U.S.
If you are planning on traveling soon with your Capital One card, you may wish to contact Capital One to make sure that they will not charge you for any foreign exchange fees during your travels.
If you are planning on traveling abroad soon, but aren’t visiting one of the countries where Discover cards are accepted, you may want to consider American Express Credit Cards, which offer various travel rewards and savings.
Another option is to try to find a smaller or more local bank that issues credit cards which don’t charge foreign exchange fees.
We ask that readers who know of credit card issuers that still don’t charge foreign exchange fees please comment on this article and provide any available information.
We will also research this further to provide information on credit card issuers that don’t charge foreign exchange fees.
Thank you for your help and enjoy maximizing money.
4 Responses to 'Capital One Credit Card Foreign Exchange Fees'
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Capital One Foreign Exchange Fees Policy
Capital One’s foreign exchange fee policy is currently indicated in their Frequently Asked Questions as follows:
17. Does Capital One charge fees for foreign currency transactions made with a credit card?
Capital One does not charge a fee for using your credit card for foreign currency transactions. Foreign purchases will be converted at the foreign exchange rate in effect at the time of posting the charge.
At this time, there are no indications that Capital One has changed this policy and they still do not charge or pass along any foreign exchange fees. (Updated February 18, 2008).
I obtained a Capital One Platinum card for purposes of foreign travel. While in South Africa, I would occasionally also use my AMEX card for certain purchases. When I used my Capital One for a purchase on 12/29/08, an exchange rate of 9.3395 RAND/US Dollar was listed. That same day, the exchange rate of 9.4502 RAND/US Dollar was calculated on my Amex statement. (my exchange rate for AMEX include the 2.0% conversion fee – note increasing to 2.7% on Jan 11, 2009). At first I thought that perhaps the exchange rate fluctuated throughout the day and that caused my AMEX with conversion fees to outperform the Capital One. Upon looking closer at the multiple purchases made that same day on my Capital One, although the rate shifted slightly throughout the day, it was not enough to account for the large difference in the two cards. In short, I now question whether there is value behind using the Capital One for foreign purchases.
Same thing happened on me. I used Capital One and AMEX on the same day while I was in India on Dec.2009. When I reviewed the statement I found the two cards has different conversion rate. AMEX was better than C.O. even with the 2% charge. I thought I was wrong, so I didn’t bother to call C. O. After I read your e-mail it seems like we need to find out the truth about Capital One’s free exchange rate from foreign purchasing.
BofA says they charge 3% over the rate published on their site, but that rate is about 6.5% worse for buying Euros than the yahoo finance listed exchange rate that is close to what AMEX lists. (I wonder if they *buy* Euros from us at that rate?) So, I am not surprised that CapOne uses the “foreign exchange rate in effect” loophole: *They* choose the rate that *they* put in effect.