Keeping an eye on the best credit card offers
Just in time for the summer movie season, Visa is bringing back its popular “Buy One Get One Free” movie ticket offer with Fandango.
Through this deal, Visa Signature cardholders who purchase two movie tickets through Fandango on Fridays will only pay for the price of one. Currently, this promotion is set to run each Friday from May 4, 2012 through August 17, 2012.
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You can now get a 20% discount on a Virgin American flight when you use your Visa card, courtesy of Visa NFL on Facebook. It’s good for a trip to anywhere Virgin America flies, subject to some restrictions.
This offer ends on February 29, 2012 and is valid for travel between January 10, 2012 and February 29, 2012 or between April 15, 2012 and June 15, 2012. Blackout dates are February 17, February 20, May 25 and May 28, 2012.
To receive your 20% discount code and to view the full terms of this offer, visit this page.
For a limited time, Visa Signature cardholders can get Gold Hilton HHonors status instantly by registering their card at www.hhonors.com/visasignature by August 31, 2011. If you’re not already an HHonors member, you’ll need to first join the program by visiting www.hhonors.com or calling 1-800-HHonors. If you also have 3 Hilton stays by August 31, 2011, you’ll extend your Gold membership through March 2013. After that time, you’ll need to fulfill the standard requirements to maintain your status.
If you already have Gold or Diamond Elite status, you’ll receive 5,000 free Hilton HHonors points just for registering your card. In addition, a glitch in the system currently allows you to register twice. You can enroll the first time to get Gold status, then re-enter your card info to get the 5,000 points. Even without double dipping, however, this is a very nice deal. See this link for the benefits of HHonors Gold membership.
If you have a Visa Signature credit card, you can save 15% off your next Southwest Airlines Wanna Get Away roundtrip fare.
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With MasterCard recently introducing its holiday Marketplace offers and Amex having run its Daily Wish program for many years, it’s only natural that Visa should also get into the act of providing discounted holiday deals for its cardholders.
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Visa Signature cardholders are eligible to receive two complimentary movie tickets to an advance screening of Secretariat hosted by Walt Disney Pictures. Each guest is also entitled to a free medium popcorn and soda. The number of free tickets are limited and this offer is only available in the following cities: New York, Chicago, San Francisco, Seattle, Detroit, Los Angeles, Philadelphia, Boston and Denver.
See this link for details. If you live in DC, you can visit this link. (Via SD)
Pentagon Federal Credit Union is now offering a new credit card that features absolutely no fees of any kind. The PenFed Promise Card is a no-frills, no annual fee card that currently offers an intro APR of 7.49% on both purchases and balance transfers for the first 36 months. After that, the interest rate is variable, tied to the Prime Rate, and currently set at 9.99%.
With no rewards program, it’s a credit card that’s about as easy to understand as possible. There are no transaction or penalty fees of any kind. That includes foreign transaction, balance transfer, cash advance, late payment, over credit limit or returned payment fees. Cardholders must sign up for e-statements for all their active accounts. For more info, see this link.
Visa just announced that it is introducing Visa SavingsEdge, a new automatic savings program for small business credit card holders. Under the free program, members will receive automatic discounts when they use their enrolled Visa Business credit and check cards at participating merchants. Savings will appear as an account credit on their monthly statement. The program is no doubt an answer to similar small business programs already offered by other networks, such as American Express’ Open Savings and the MasterCard Easy Savings program.
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In an effort to increase circulation of its dollar coins, the US Mint is offering free standard shipping on orders of its Presidential $1 Coins. Customers may order up to 500 of each $1 Presidential Coin and orders may be placed with any major credit card, including Visa, Mastercard, Discover or American Express. To spell out the obvious, this is an opportunity is the ability to purchase a cash equivalent on your credit card at cost, thus earning points or miles for “free.”
Those who have followed the recent credit card foreign transaction fee lawsuit and subsequent settlement are aware of the hidden costs of making a purchase in foreign currency. In the most common case, both the network (ie., Visa, MasterCard, Amex) and the card issuer will tack on a surcharge, usually totalling 1-3%, to every overseas transaction. (For a full table of these fees by issuer, see the FlyerTalk Wiki.)
Amex vs. Visa / Mastercard
I recently decided to perform a mini experiment to explore a little publicized aspect of making purchases in foreign currency–namely, to discover the difference, if any, between the underlying exchange rate used by American Express and that of Visa/Mastercard.
The experiment
In the past, I had heard that Amex used inferior exchange rates, so to test that theory I set up an admittedly imperfect experiment, pitting my Starwood American Express against my Chase Visa.
Last week, I ran a series of charges against each card. On Jan. 28, I charged 25 British pounds on each card, with each charge coming within minutes of one another. I repeated this again on Jan. 30 and Feb. 1. In theory, the Starwood Amex with its 2% forex fee should beat the Chase Visa with its overall 3% forex fee (1% from Visa + 2% from Chase), assuming that their underlying exchange rates were comparable.
The results
Unfortunately this test didn’t yield the information that I was hoping for. For one thing, I found that while Amex processed each transaction on the day that it occurred, Visa took until the next day, meaning that I couldn’t directly compare the exchange rates.
When I tried to calculate the foreign exchange fee using the average daily Interbank rate, as quoted by Oanda.com, I got the following results:
| Date Charged | Amount Charged | Card | Date Processed | Charge in dollars | Interbank rate* | Fee |
|---|---|---|---|---|---|---|
| 1/28 | 25 GBP | Amex | 1/28 | $50.71 | 1.98370 | 2.3% |
| 1/28 | 25 GBP | Chase | 1/29 | $51.21 | 1.98190 | 3.4% |
| 1/30 | 25 GBP | Amex | 1/30 | $50.88 | 1.98640 | 2.5% |
| 1/30 | 25 GBP | Chase | 1/31 | $51.24 | 1.990 | 3.0% |
| 2/1 | 25 GBP | Amex | 2/1 | $50.87 | 1.99830 | 1.8% |
| 2/1 | 25 GBP | Chase | 2/2 | $50.73 | 1.98490 | 2.2% |
Further Research
Since these results weren’t exactly what I was expecting, I did a bit more research and found some information that helps explain why I didn’t get nice, round numbers. American Express describes how it determines its conversion rate in the fine print of your billing statement:
If you incur a Charge in a foreign currency, it will be converted into US dollars on the date it is processed by us or our agents. Unless a particular rate is required by applicable law, we will choose a conversion rate that is acceptable to us for that date. Currently, the conversion rate we use for a Charge in a foreign currency is no greater than (a) the highest official conversion rate published by a government agency, or (b) the highest interbank conversion rate identified by us from customary banking sources, on the conversion date or the prior business day, in each instance is increased by 2%. This conversion rate may differ from rates in effect on the date of your charge.
Visa also explains how it handles foreign currency transactions:
Will the rates shown be the rates charged to my account?
The exact rate you receive depends on when the transaction is posted to the Visa system. The day the charge actually posts may be later than the day on which you made the purchase, depending on how promptly each merchant handles their Visa transactions.
How does Visa calculate its rate?
Every day—except weekends, Memorial Day, Christmas Day and New Year’s Day—Visa calculates the rate for the next day’s transactions. The Visa rate is selected from a range of rates available in wholesale currency markets or the government-mandated rate in effect one day prior to the applicable central processing date. Visa makes this rate available to issuing banks, which may adjust the rate when billing cardholders by applying a foreign transaction fee. The rate Visa makes available to issuing banks may vary from the rate Visa itself receives. Most consumers find that using Visa is a convenient and cost-effective way to make purchases and obtain cash when traveling internationally.
How accurate are the rates?
The rates you are shown are generated with Visa’s internal database for exchange rates and are accurate to two decimal places. However, they are only meant to serve as an indication of the rate you could expect to receive from your issuing bank. As exchange rates change constantly, the rate is only accurate for one day. The exact rate you are charged depends on when the transaction is posted to the Visa system, which may be later than the day on which you paid, depending on how promptly each merchant handles their Visa transactions. Additionally, your final transaction amount may differ depending on whether the merchant converts the currency at the point of sale or if the bank that issues your card assesses a foreign transaction fee.
My conclusion?
Based on this information, I learned that a direct comparison of exchange rates will always be difficult given how much latitude the networks have afforded themselves in determining the conversion rate, especially with regards to the timing of the transaction. From a practical standpoint, it’s more important to look at the other components of foreign currency fees rather than the underlying exchange rate.
Instead, focus on the fees that are documented and well-defined. See the table below for a summary of these fees for major issuers:
| Issuer | Total Foreign Currency Fee |
|---|---|
| Amex | 2% |
| Cap One | 0% |
| Citi | 3% |
| Chase | 3% |
| Discover | 0% |
| FIA | 3% |
| HSBC | 3% |