Visa vs MasterCard vs Amex vs Diners Club – Which has the Best Foreign Exchange Rate?

By | July 13, 2017

Foreign Currency transactions are getting quite common these days as foreign vacations are increasing like never before. And as there are unique products available under low price in websites like Ali-Express, even a typical consumer started spending on foreign currencies. However, i still see people charging 1000’s of $ on their credit/debit card that has 3.5% foreign transaction fees with poor reward rate.

For those, we’ve listed best credit cards for international transactions which can help you save really a lot of money. Now this article will help in further fine tuning that to next level. Most of the time, the differences in exchange rates are small – not something you’d notice when spending $10 or $20 a time. It basically helps those who spend in high volumes.

Visa vs MasterCard vs Amex vs Diners – Which has the Best Foreign Currency Exchange Rate?

Exchange Rates on Foreign Currency Transactions:

I’ve done a quick research couple of months back by charging all cards a tiny amount to see the differences of actual charges on multiple card networks and here are the results. We’ll take Xe.com rates as benchmark and see how the results vary.

To makes things simple, i’ve taken out the components like forex makeup fees & taxes on it put by banks. Hence the numbers you see are the conversion rates of the respective card network. Remember, you’ll be charged additional Forex Markup Fee (varies from card to card) and GST on that markup fee. Here you go,

  • XE value: 1$ = Rs.66.4
  • Visa: Rs. 66.7
  • Amex: Rs. 66.8
  • MasterCard: Rs. 66.6
  • Diners: Rs. 67.3

Its important to note that each card network/bank might “settle” the amount at different times which makes it almost impossible to find the “exact” conversion rate this way unless we test extensively over a period of month, but it helps us to understand the numbers to certain extent and it appears that the stats stand similar to what i heard from others.

Visa/Mastercard display’s their live conversion rates on their respective websites while Amex/diners don’t, AFAIK.

Which Card Network has the Best Foreign Currency Exchange Rate?

Inferences from the tests:

  1. MasterCard is the Best: MasterCard has the lowest forex conversion rate ever. Verified multiple times and also acknowledged by many card users.
  2. Visa/ Amex are Good: Visa and Amex rates are almost same. I see that the differences go up and down, though its lesser than Mastercard, most of the time.
  3. Diners Club is the Worst: Diners Club conversion rates are very high, usually 1% more than the actual XE rate. So if you’re using some of the Diners Club Credit cards in India to enjoy 2% forex markup rate, you’re actually paying around 3%

Currently, foreign transactions are not taken that seriously by credit card companies in India these days but hopefully it gets better soon. We’re seeing some small promos like this and this and this on foreign txns which is a good sign, but most of them needs “few” international POS spends to be eligible to avail the offer.

Basically banks are trying to tap into the wallets of the HNI – foreign travelers rather than those who randomly spend online in foreign currency.

Hopefully banks come up with zero or lower markup fees on Credit Cards as unique value proposition on high end cards to shine in this competitive market. What say?

19 thoughts on “Visa vs MasterCard vs Amex vs Diners Club – Which has the Best Foreign Exchange Rate?

  1. Meet Sharma

    I have an upcoming Singapore trip in December. Would be my first overseas trip. Would it be better to use a credit card or a forex card?

    Reply
    1. Siddharth Post author

      Very tough to answer without knowing which cards you hold!

      Reply
      1. Meet Sharma

        ICICI Platinum CC, visa variant. Going to apply for SBI Elite Mastercard variant as well.

        Reply
    2. Shafwan

      IndusInd Signature Exclusive it is ! Just go and get it ! You are charged nothing !! Except the fact that it is Visa and visa rates are always 1% higher than Xe .

      Reply
  2. Anonymous

    If one were to compare using Diners Black for international transactions (assuming it will be accepted to begin with) then Diners Black would still offer a better net deal than say Yes First Exclusive, right? I’m saying based on the 3.33% reward earn versus 2.5% earn. Of course the best of both worlds would be Infinia.

    Reply
    1. Abhishek Roy

      No, Yes First Cards have a markup fees of 1.75% which further narrows the gap.

      Reply
      1. Anonymous

        Narrows it. But does it fill up the gap completely? What is the markup fee on Diners Black?

        Reply
      2. Prashant Gupta

        On excel if you do calculation you can see that Diners black will still give better return than exclusive

        Reply
    1. Saravanan R

      A very useful article. This article shows hidden charges of how much extra do they charge for transacting on foreign currency. I was thinking wrongly that this rate was fixed by Bank and it is same for all card transactions.

      Reply
  3. Suhas

    I’ll be making a trip to the UK next month. I hold a Regalia First CC . My question is, is it still worth considering a forex card? I know that Regalia First has a lower currency markup value than most credit cards out there, but I am not sure to what extent interest rates, GST etc are factors which may be added to transactions.

    Reply
    1. Anish

      If you are holding HDFC Regalia first card, it does not have a good reward rate for Foreign Transactions. It’s always better to take a Forex Card. If you are traveling to the UK, I would strongly recommend you to take a forex card with contactless payment enabled it will be a lot more comfortable there since almost all shops accept contactless payments for GBP 30 and less. As far as I know, only HDFC bank forex card has contactless cards.

      Reply
      1. Suhas

        @Anish: Thanks for the inputs. It looks like the Axis Bank Multi-Currency Forex Card is also a contactless card and offers better exchange rates at the time of loading than HDFC, but will have to compare them more in detail. @Siddharth: The Axis Bank Forex Card is one that might be worth reviewing in the future.

        Reply
  4. Prashant Gupta

    I use Bookmyforex for forex requirements they charge no commision and have the best rate in market.

    Reply
  5. valliappan

    Hello Sid,
    A quick tip which might be useful for many of them for forex. I hold salary previlege account with ICICI. During my business trip to Thailand i happen to use my debit card for a small purchase to check the charges, absolutely nothing was charged for a pos transaction. But when i checked with bank they are telling charges will come along with Mark up fee so to confirm this i swiped it. i calculated the rate using Google convertor and the value is absolutely same. for example is 1000thb is 2k inr then my account is charged with same! Surprised but it works for all of my colleagues too! it is a visa variant – previlege debit card.

    Reply
    1. Siddharth Post author

      You mean no Markup fee/taxes being added? If so its a hidden gem!

      Reply
      1. valliappan

        Yes no mark up fee no taxes! type in the conversion rate in Google then swipe it you will find same conversion rate. In fact a small percentage lesser than Google rate itself!

        Reply
        1. Siddharth Post author

          Incredible. I’ve that privilege debit card (gold colored).
          Will try sometime.

          Reply

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