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Email this11:36 am
February 17, 2013
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I have been having my doubts about Amazon Visa's claim of 0% fee for foreign exchange rates. Their charges always seem to be more than I expect in comparison to the exchange rate posted by the Bank of Canada + other fees. Sure, there are fluctuations, even hourly, and the rate they charge is the "exchange rate set by Visa International". So I thought I would do a head-to head comparison. I was in the US today and bought 2 identical items for $6.12 USD + tax for a total of 6.72 USD.
When I got home I checked both web sites (they both show pending transactions almost immediately, which I find most convenient) to see what was posted. To my surprise, they BOTH have a pending charge of $9.36 CDN. I was expecting the Visa with a 0% foreign currency exchange rate to be slightly lower than the M/C charge with a 1.5% exchange rate. They both have a 1% rebate (Visa credited after accumulating 2,000.00 in charges and M/C every statement period), unless Tangerine considers it a grocery purchase (Fred Meyer) and gives me 2% on it, which would actually put the Tangerine card ahead of the 0% fee Visa. Now I am wondering if Visa is just claiming a 0% fee while visa International is jacking up the exchange rate to compensate. If that is the case, the Tangerine card is actually a better deal when using it in one of the money-back categories. Like I said, both transactions are pending, I will keep an eye on when they are actually posted, as that amount often changes with the rise/fall of the dollar from when first pending.
11:54 am
February 24, 2015
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yes, please post actual amount & 1% vs 2%. I have not seen this anywhere yet.
12:04 pm
October 21, 2013
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There was a fairly extensive discussion of this issue here:
https://www.highinterestsavings.ca/forum/credit-card-reward-programs/tangerine-cash-back-mastercard/page-3/
12:05 pm
December 23, 2011
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Good sanity check.:)
Sears MasterCard now Scotiacard says no other fees other than the "exchange rate set by Mastercard International". I would imagine those rates would always be a bit higher. I felt comfortable that I was paying less when using Sears MasterCard and Amex in the USA but never did an identical purchase as you. No doubt Scotiabank will screw it up as they did with ING? I will do same as you next time we cross.....one with the Scotiabank MasterCard and one with BMO MasterCard. Just to keep it all with the MasterCard International.
12:16 pm
October 21, 2013
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I would be very interested in hearing about a direct comparision that included AmEx.
12:22 pm
February 17, 2013
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Loonie said
There was a fairly extensive discussion of this issue here:
https://www.highinterestsavings.ca/forum/credit-card-reward-programs/tangerine-cash-back-mastercard/page-3/
That was done using posted numbers, and no one knows what "Visa International" set the rate at over and above the BOC rate. I physically charged items to get the real final number
Loonie said
I would be very interested in hearing about a direct comparision that included AmEx.
I have used both AMEX and a BOM M/C in the past when the dollar was quite a bit stronger and their rates were a bit higher than Tangerine and Amazon
10:33 pm
October 21, 2013
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Just to be clear, Rick, are you saying that Amex cost more than Amazon for purchase of same value when you last checked?
9:51 am
February 17, 2013
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Loonie said
Just to be clear, Rick, are you saying that Amex cost more than Amazon for purchase of same value when you last checked?
Loonie; I don't have records comparing two purchases of the exact price, but I did check my records for purchases on the same day. The Amex purchase exchange rate was 12.88% while the Amazon Visa was 9.75%. That was back in September of 2014 with plain Air Miles Amex, ...not one of their fee or special program cards
12:55 pm
April 5, 2012
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A small information about this subject:
I do a monthly Patreon contribution in USD using my Visa Amazon. It does show up in my pending transactions with an "X" amount but, when it's finally posted to my account, the amount tends to change a small bit.
I noticed because on a few occasion, I entered this pending transaction in Quicken and it would not balance when I reconciled my account with my statement at the end of the month.
1:01 pm
February 17, 2013
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malquin; I have noticed that as well. I presume it because of the fluctuations of the dollar between the time it is pending and the time it is actually posted. I will update the actual amount charged when they are posted to my account.
11:02 pm
February 17, 2013
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Amazon posted today. Cost ended up being $9.34 with an exchange rate of 1.389880952. Tang hasn't posted yet. Just to show how quickly the rate fluctuates,here are the exchange rates on the 5 transactions charged on the same day that were all posted today:
1.390627339
1.389880952 (these 2 were charged literally seconds apart)
1.390563565
1.391705069
1.390326209
That is the order they were posted, but not the order they were charged. I don't know about you, but I think calculating conversions to 8 decimal points is a bit excessive. All those fractions can really add up I guess. Wonder how many decimal points they calculate the cash-back rewards to?
11:48 pm
October 21, 2013
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Remember the old Bell phone booths that charged 10 cents a call?, and you could talk for as long as you wanted or until somebody else banged the door in.
Ma Bell made a lot of money off those, 10 cents at a time.
5:39 am
June 29, 2013
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you are correct Loonie - that is why Bell was considered a top "widows and orphans" stock. Bell was very profitable through the whole 20th century and it continues. I think my mother scraped together whenever she had some meagre savings to buy Bell shares at perhaps $10 or $15 per share many years ago and they kept splitting and splitting as well as paying regular great dividends. Bell has certainly been a winner for ultra conservative investors (although there is more competition today with Telus, Rogers etc.) The Bell dividend as of today is around 4.8% and one gets a tax credit too - not too shabby!
7:48 pm
October 21, 2013
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yeah, my maiden great-aunt had those too, until the day she died, well into her 90s.
On the other hand, many people had a similar faith in Nortel...
8:10 pm
December 23, 2011
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Loonie said
yeah, my maiden great-aunt had those too, until the day she died, well into her 90s.
On the other hand, many people had a similar faith in Nortel...
My mother had 5 BCE shares too. She saved a scraped to buy. I wonder how much the commission fees were as she did not buy all at once.
Btw I remember BC Tel phone booths for a nickel.
10:37 pm
April 6, 2013
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Your mother may have paid commissions for just her first share, if at all.
BCE has a dividend reinvestment and stock purchase plan that allows optional, additional cash purchases. BCE covers the brokerage commissions on the common shares purchased with both dividends and additional cash.
BCE is no Nortel. BCE shareholders don't have to flip their shares to have a return. According to June 2015 Money Reporter article BCE among top Canadian dividend stocks, BCE common shareholders saw their dividend income grow by 78% from 2008 to 2015.
2:57 am
October 21, 2013
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I didn't claim that BCE and Nortel were the same, only that they have both inspired a lot of faith amongst investors. Nortel was considered a reliable core holding in its day, held in most mutual funds and recommended by most advisors. When you think nothing can go wrong, you and your money are at risk.
kanaka - I'm sure I'd remember the 5-cent phone booths too if I weren't so old! - 'cause I'm pretty sure I'm older than you. Memory ain't what it used to be. But I do remember when popsicles went up from 5 to 6 cents and cones were 10, critical issues of childhood. 
7:45 am
June 29, 2013
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Loonie said
yeah, my maiden great-aunt had those too, until the day she died, well into her 90s.
On the other hand, many people had a similar faith in Nortel...
That would be a very erroneous assumption to have "similar faith in Nortel" to Bell - Nortel was well known to be a technology stock with a high P/E (price to earnings ratio) - was in no way in the category of Bell.
If one wanted to invest in Nortel one should have put say a small/smaller % of such in one's portfolio - so overall one's portfolio will thrive, in the case of a loss of one individual stock. It is indeed too bad for those people who you say "had a similar faith in Nortel." They should not have considered Nortel equal to Bell because the fundamentals did not support that conclusion.
7:01 pm
October 21, 2013
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They shouldn'a, no doubt, but they did. This is the problem, that people so often don't notice the risk until afterwards, including market risk.
Your strategy re: Nortel is no doubt correct, Brian. Yet lots of otherwise-sober-and-intelligent-people did otherwise at the time, including little old ladies and their advisors. That's the problem: that was then, and this is now. In headier days, all kinds of people believed Nortel would come back and that the high P/E could be justified.
Now, everyone can see what was hard for many to see then, such was their faith.
The question I ask myself is, what are the risks that we are not paying enough attention to today? It's the ones you may not foresee or take seriously that "getcha". History is full of them, and no doubt there will be more.
7:49 pm
February 17, 2013
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Tangerine posted today... i guess they don't work on the weekends. Amount was $9.48 CDN but the CDN dollar took another half cent dive today. They posted it as groceries so a 2% cash reward equals 9.29 final compared to Amazons' 9.34 - 1% for 9.25. Fluctuation in the dollar had a big effect on the final cost. I leaning towards using the "pending" amount as a direct comparison.
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