Amex Foreign Currency Exchange Rates

[JohnK]

I have been monitoring the exchange rates used by Amex on my overseas transactions and I am unable to reconcile the exchange rates used. I have been using a number of websites, xe, oanda, quoting interbank rates and the Amex exchange rate before the 2.5% commission is very low.

I stayed at HI Christchurch on 11/11/07 and checked out the next day paying NZ$159 for the night. The transaction has just hit my credit card and it has converted to A$137.40 (exchange rate 1.1572) with a commission charge of $3.44 giving a total of $140.84.

According to the websites I have searched the exchange rate has not gone below 1.17370 in the past week. Can anyone really reconcile the exchange rates used by credit card companies?

In the past I have been able to get close to the exchange rate used by Amex and have not worried about it. Even though in this instance the difference is only $2 I am about to purchase airfares and accommodation and the difference could be around $50.

 

[futaris]

Not sure what the exchange rate is supposed to be. But just for comparison, the Europcar hire on 09 Nov was:

NZ$145.29 = AU$125.42

Take away the $3.06 comm fee, and it becomes AU$122.36. $3.06 is 2.5% of $122.36, so I think I worked it out right.

NZ$145.29/AU$122.36 gives a rate of NZ$1.1873/AU$1

Rate doesn't seem that bad...

 

[JohnK]

You dropped the car off on the afternoon of the 11th and I paid the hotel bill early morning on the 12th. The charge for the hotel hit my credit card sometime last night or this morning with a transaction date of 12/11/07. I assume your car hire would have hit your card yesterday or today.

There is clearly a difference on the exchange rate of 3 cents between your transaction and mine. Should I be concerned?

 

[futaris]

I wouldn't be concerned. I don't think exchange rates change over the weekend.

XE.com - Free Chart seems to confirm that there was a 2-3 cent drop over the weekend.

 

[serfty]

Having a series of good samples using, I did some analysis using XE.com - Credit Card Charges Calculator .

It seems the calculations are based on when the charge hits the card; not the transaction date.

e.g. The NZD50 departure tax for the two of us on the 11th was charged at AUS43.61, a 2.7% rate for the 12th Nov. If based on the 11th it would have been 4.41%.

There appears to be an variance of up to .5% with these calculations, due to differences in dates/time zones and commercial issues.

 

[JohnK]

e.g. The NZD50 departure tax for the two of us on the 11th was charged at AUS43.61, a 2.7% rate for the 12th Nov. If based on the 11th it would have been 4.41%.

There is something seriously wrong with the way Amex calculates foreign exchange rates!

Using the tool you provided and inputting the actual A$ amount charged I get a commission of 5.757% on the 11th Nov, 4.380% on the 12th Nov and 4.880% on the 13th Nov. I thought they are only supposed to charge 2.5% as reported on the statement.

Does this look right? What am I doing wrong and why is the commission so high? The transaction amount is clearly NZ$159 and the charge on credit card including commission is A$140.84!

 

[oz_mark]

Does this look right? What am I doing wrong and why is the commission so high? The transaction amount is clearly NZ$159 and the charge on credit card including commission is A$140.84!

JohnK, using your figures

NZ $159

AUD $137.40 of which $3.44 is commission (therefore AUD before commission=$133.96)

2.5% 0f 133.96 = $3.35 (so 9c out there, but never mind, hmm, it is actually 2.5% of $137.40 though - interesting)

Exchange rate - 159/133.96 = 1.1869

 

[JohnK]

Sorry, I should have been more clear.

The charge on the credit card statement is $137.40 plus a commission of $3.44 giving a total charge of $140.84!

 

[oz_mark]

Sorry, I should have been more clear.

The charge on the credit card statement is $137.40 plus a commission of $3.44 giving a total charge of $140.84!

Oh I see Ignore my ramblings then!

 

[futaris]

$137.40 / 40 = $3.44, which is 2.5%.

 

[JohnK]

Not questioning the commission that is reported on the statement.

Based on the exchange rates you, 1.1873, and serfty, 1.175, quoted the exchange rate used for my transaction is very low. Where can I confirm that the actual exchange rate had dropped to 1.15 in the last few days? Both XE and Oanda quote the lowest exchange rate in the last 3 days as 1.17!

So as far as I am concerned Amex is getting a lot more than 2.5% commission from me. Can someone please explain what is happening? Am I doing something wrong in the calculations?