

Arbitraging credit cards while traveling abroad - shivpatelssp
https://medium.com/@shivpatel/get-the-most-from-your-credit-cards-while-traveling-abroad-3808352b4586

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aianus
This would only be arbitraging if you were buying something on one card and
returning it on another card. It's not arbitrage if you're not making a
profit, it's just saving.

Nice cost-comparison tool though :)

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shivpatelssp
Great point! Wrong choice in words; will edit the post to make better sense.
Also looks like someone else edited the title of this post on YC. Any idea how
to change it back?

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jakozaur
Nice trick, though not that practical.

1% of oversee spending may be to little benefit for the cost: 1\. Get more
than one card with zero foreign transaction fees. Make sure you won't get
charged yearly fee on those.

2\. On every transaction, check the rate on smarthphone. Oh, you want to buy
$3 coffee, let me check my rate to see if I can save $0.03.

3\. More cards is more monitoring hassle. Harder to track, more hassle if they
get stolen and you need to block them all. Also payback program tracking is
much harder.

4\. Same with fees and interests. More card is more likely that you miss some
payments and get charged interests/overdraft. One incident and you whole
savings can go away. Even with autopayment you need to make sure you balance
your accounts.

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jannotti
I think, but I'm not sure, that you're overstating the complication. Looking
at your four steps: 1\. Everyone should have two credit cards. You don't want
a single point of failure (mistaken fraud freeze, for example.) 2\. You only
check every day, not every transaction. 3\. Again, I argue you should have two
(Visa + Mastercard) 4\. Again. You're just trying to make things sound hard by
repeating the same thing.

So. Have two cards. Make sure they autopay themselves. The only new work is
checking the exchange rates once a day.

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shivpatelssp
@jannotti Couldn't have explained it better! Only clarification I'd make is
you can use this for more than two cards.

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BonoboBoner
Interesting concept let me see his method..scrolling.. oh it is about
marketing his app.

Unless you invest the money you get from the credit card, isnt his approach
just min/maxing your cost to get money?

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jackgavigan
You also need to factor in any foreign currency fees your card issuer imposes.
For example, in the UK, most banks impose a "non-sterling transaction fee" of
2.75-2.99% on transactions in a foreign currency.

There's a UK startup called Revolut - www.revolut.com - which allows you to
hold GBP, USD and EUR on the same (pre-paid debit) card and convert money
between them at mid-market rates, using an app.

It's pretty slick - I've literally stood at the counter, converting GBP to USD
while the clerk rang up my purchase, then handed the card to the clerk and had
the notification hit my phone seconds after he swiped.

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aianus
> You also need to factor in any foreign currency fees your card issuer
> imposes.

He's specifically referring to cards that offer spot forex rates. There are
many such options in the U.S.

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jackgavigan
In the UK, the non-sterling transaction fee is separate from the currency
exchange.

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edent
That's really useful. You might want to take a look at
[https://supercard.io/](https://supercard.io/) \- it's a virtual credit card
which chooses the best daily rate for you.

I'm on the beta trial and finding it pretty useful.

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ollie87
I use the [https://revolut.com/](https://revolut.com/) app, which is awesome
as it doesn't change any fees ever.

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roel_v
It's sad that I have to say this in 2015, but the cheapest way to deal with
money oversees is to... use cash as much as possible. It's not as convenient
(although, everybody takes cash, credit cards - depends on where you go...),
but taking a wad of cash for trips <= 1 week or making weekly withdrawals for
travels longer than that is usually by far the cheapest option.

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aianus
As somebody who travels a lot credit cards are much, much cheaper than cash.
It's not even close. Banks / exchange shops have commissions (baked into the
exchange rate) from 2.5% to 5%.

My credit card charges $5 flat fee to take out cash, gives spot forex rates,
and gives me 1% cashback on purchases. So if I take out $500 cash and spend
$500 directly on the card I pay zero fees versus the $25-$50 in fees I'd spend
dealing with $1000 cash.

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roel_v
What card is that, and with which bank, if any? I don't have any cards with a
flat fee (both Mastercard and Visa).

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aianus
Amazon.ca rewards Visa card from Chase:
[https://www.chase.com/online/canada/amazon-ca-
home.htm](https://www.chase.com/online/canada/amazon-ca-home.htm)

I was wrong, it's 1% per cash advance with a minimum of $5. I've never taken
more than $500 in cash out at a time so that's how I remembered it. Also, the
above calculations assume you overpay the card beforehand so you don't incur
interest charges.

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tempestn
Without real-time rates available from multiple networks, this relies on that
back-tested effect that the card with the better rate tends to persist for
several days; is there a reason to be confident that will continue? Not that
there's much risk if it doesn't, but you could well just be wasting your time.

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learnstats2
So in the example, this method costs the user $7 compared to just always using
the Visa card.

The quoted "savings" are compared to the worst possible case - which can only
happen if... you use the suggested app.

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rmc
Less useful if you live in the Eurozone. I travel abroad a lot, and it's still
just Euro....

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mburst
Why not just get a card without foreign transaction fees?

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chillydawg
Because even with no fees, the rate your card uses to turn USD into whatevers
will vary from card to card. If you're not paying an up front transaction fee,
you're almost certainly getting rinsed on the rate offered.

