Wizard Clear Adv MC - Exchange Rate issue

[i_drive]

Hello all,
Long time reader, first time poster.

Anyway I'll get straight to it (I hope this isn't too longwinded ) - as many are probably aware in the last few days the Aussie dollar has been very volatile, and I'm trying to confirm what exchange rate would be applied on a U.S. dollar transaction on my Clear Advantage MC.

The situation for me is that I purchased a few items in U.S. Dollars on the 6th October around 2pm EST using a PayPal account. At this time, the exchange rate was sitting at about 75 U.S. cents to 1 AU dollar (according to forex sites).

Upon immediately checking my online statement, my available credit indicated that I been charged around $550 AUD for all the transactions (the actual transaction listings always appear a few days later). Using this AUD amount I calculated based on the U.S. dollar cost of the transactions a rate of approx. 77 U.S. cents to the dollar (I can only guess the difference in rate from 75->77 would be because they used the rate from the previous day).

However, today when the individual transactions have actually appeared (all of which have Trans Date's of the 6th) on the online statement, the actual exchange rate for each transaction is at 70.9 US cents to the dollar.

Now I know that determining the exchange rate used by credit cards can be more of an art than science, and as the T&C's of the card it stipulates:

Those United States dollar equivalents and any purchase, cash advance or other charge incurred in United States dollars will be converted to an Australian Dollar equivalent at our discretion by: (a) MasterCard International Incorporated as at the date of processing in the United States; or (b) us as at the date of processing in Australia.

I tried to confirm with the lady from India what "date of processing" actually refers to - the date the charge was made, or the date it appears on the online statement - however she first said it would be the former, then said it would be the latter. I've been told to call during business hours tomorrow to speak to a 'supervisor' to get more clarity on the mater.

Has anyone had a similar experience to this, and has got an explanation to the exact manner in which the exchange rate is determined. In most instances I would admit to never have checking since currencies don't tend to fluctuate as violently as they have recently. In this case it would seem I've paid close to 10% more for items then what I was expecting! In a volatile market, this sort of thing wreaks havoc with knowing how much you are going to pay for something from overseas.

Thanks for any help in advance...

 

[serfty]

G'day i_drive, welcome to AFF

All I can suggest you do is check XE - The World's Favorite Currency and Foreign Exchange Site to get an idea of the exchange rate that was "in the market" on the day.

These rates are generally accurate to within a day - note that in these volatile times 24 hours can make a huge difference.

I would suggest you compare with "the XE rate" the day before and the day after as well.

 

[JohnK]

I have never been able to reconcile foreign currency transactions with any credit card. I have given up trying to reconcile and if the exchange rate looks close enough then it is good enough for me.

That being said so far so good using the Wizard Clear Advantage Mastercard....

 

[serfty]

Looks like Oct 6 was a bad day for an Aussie to transact in USD:

Mid-market rate for USD to AUD on 2008.10.05:
(Excluding bank charges) 1.29265 [0.775]

Mid-market rate for USD to AUD on 2008.10.06:
(Excluding bank charges) 1.40094 [0.714]

Mid-market rate for USD to AUD on 2008.10.07:
(Excluding bank charges) 1.38708 [0.721]

Also note that PayPal take their own cut of 2% on AUD/USD forex. So in this case the exchange rate for your transaction on 6th October would have been USD0.714 less 2% of that or 0.6997

 

[aspro2]

Looks like Oct 6 was a bad day for an Aussie to transact in USD:Also note that PayPal take their own cut of 2% on AUD/USD forex. So in this case the exchange rate for your transaction on 6th October would have been USD0.714 less 2% of that or 0.6997

Isn't that only if you permit PayPal to do the conversion before charging your card in AUD? I *never* let PayPal do the conversion for my credit card purchases via PayPal, which results in the lovely Wizard rate.

Perhaps the OP accidentally let the PayPal conversion happen, rather than billing the CC in USD.

Last time I calculated it (about a year ago), all of my transactions (PayPal or independent) on the Wiz. Clear Adv. MC have had a margin of no more than 0.8% over the interbank rate.

 

[mech]

I had a similar issue. I'm currently in Japan and the rate is all over the place - on Thursday night it was going from 72 to 64. I bought when the rate was at about 71, 72. I then rang Wizard to ask how they do it - the guy told me to go to 'asx.com' and check the rate there. So he didn't know at all. He told me the rate I got at the time was 72.5 or so so I was pretty happy. However it finally came through on my online account and the rate was 68.5. Not so happy.

He also said they convert to USD and then to YEN...?

So I'm pretty annoyed... I've been trying to time my runs to the bank to get a decent rate, but what's the point if that's not the rate they use? It's ridiculous volatile at the moment - when I checked rates before it was up to 68.75, by the time I got to the ATM it had dropped to 66.43 and is now down to 65.43... this all in a couple of hours. It makes a big difference to me, especially when timing payment of my hotel room...!

Wish they were more transparent about it. Well, what I really wish was I'd prepaid the accommodation back when I booked it and the dollar was hovering just under 100 yen! Such is life...

 

[serfty]

I don't think hour by hour timing matters. I believe the rate used is that when the transaction is charged against your account; this can be several days after the actual purchase.

 

[pongie]

Wish they were more transparent about it. Well, what I really wish was I'd prepaid the accommodation back when I booked it and the dollar was hovering just under 100 yen! Such is life...

I was in Japan the last two weeks. Had about $5k converted to yen back when it was 100 yen/dollar and about $4k dumped into the wizards clear advantage card (didn't want to carry too much cash around). Then our dollar crashed ! I was so reluctant to withdraw any more money from the card and started budgeting what was left of my cash (losing 20-30% value if I did withdraw).

Ended up not being able to afford big purchases f(electronics and gadgets). Would of been nice if I had converted all of it at the time and had left over yen to convert back and make a nice profit. However, a relative borrowed that amount at the time...

 

[Danger]

I wrote two very long, detailed letters to GE Money (Wizard) after I paid for a DONE4 (out of South Africa) on my card and was overcharged $112. They rejected both letters and stood by their rate. I then lodged a formal complaint with the Financial Ombudsman Service and - knock me over with a feather - yesterday I get a call from Wizard. The very same lady who last dismissed my complaint said they had been advised of my complaint with the ombudsman and 'while we stand by our decision, in the interest of resolution we are prepared to refund you the $112'.

Why does it have to get this far?

 

[NM]

Why does it have to get this far?

because they assume most people won't take it as far as you did.

 

[Danger]

It was a rhetorical question but, yes, I completely agree.

 

[Alanslegal]

I wrote two very long, detailed letters to GE Money (Wizard) after I paid for a DONE4 (out of South Africa) on my card and was overcharged $112. They rejected both letters and stood by their rate.

what kind of rate difference are we talking about?

 

[Danger]

what kind of rate difference are we talking about?

They used a rate of 6.64 when it should have been 6.73, significant when we're talking thousands of dollars.

I could have lived with whatever rate they used (well, almost) - except countless phone calls (and I'm talking well over 10) to their 1800 number saw me given information that pointed to a rate of 6.73. In other words, they were telling me it was 'made in Australia' but the label said 'made in Uganda'!

 

[auriga]

They told you the rate should be 6.73, yet used the rate of 6.64?

Don't really understand this. How did they explain this?

 

[Danger]

Very, very long story but, essentially, prior to engaging in the transaction I phoned their 1300 number several times seeking information on how they calculate the exchange rate used on foreign transactions. Responses received included:

• "the daily rate for that country" (!)
• "whatever rate is running in the market" (!)
• "the global rate" (!)
• "using the MasterCard process . . . it is based on the day rate".

The most common response (across a dozen or so calls, before and after I made the transaction) was that they use the rate set by MasterCard. Each time I was told this I called MasterCard on the number given to me by Wizard and asked what the exchange rate was for the day of my transaction and each time I was given the same rate - at least someone's consistent!

The rate, however, differed from the one used by Wizard in calculating the charge, hence my beef with them. So, yes, they told me (by referring to MasterCard's process) that the rate should be 6.73 but the used the rate of 6.64.

 

[auriga]

Ah.... I see.

Thanks for explaining.

 

[one9]

Looking at this thread and another on Wizard removing the advertising about fee free international transactions, makes me ask the question:
Is it still worth applying for this card?

Current cardholders - Is the rate still OK? Or has it got worse to make it not worthwhile?

 

[zzyss]

Looking at this thread and another on Wizard removing the advertising about fee free international transactions, makes me ask the question:
Is it still worth applying for this card?

Current cardholders - Is the rate still OK? Or has it got worse to make it not worthwhile?

A transaction that I made last week was within 0.3% of the mid-market rate published on xe.com, so I'd say that it's still worth it. Whether it will change in the future... couldn't tell ya, but considering that there's nothing to lose and everything to gain from getting one, I'd go for it.

 

[Danger]

Yes, I would still say it's worth it. Just watch them and be prepared to make a stink if it's a particularly poor rate.

 

[gibspmuh]

Add me to those that loves the Wizard MC - the exchange rate offered has remained pretty close to the mid-market rates in my experience, and with no fees for ATM use internationally it's tough to find a better option (I certainly haven't anyway).