How credit cards make money

Re:How credit cards make money by computator on Friday November 05, 2021 @04:00PM (#29124111)

If you have a credit card that charges no foreign exchange fee, could you overpay your credit card (i.e., leave a balance in your favor on the card), then withdraw cash at foreign ATM machines, thereby avoiding both forex fees and credit card interest?

The terms & conditions on my credit card sound like it should work (I shouldn’t be charged interest if I have a credit balance), but I’ve never tried it.

Failing that idea, do you have any tips for frequent American travellers on how to get foreign cash without paying excessive conversion fees?

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Re:How credit cards make money by toast0 on Friday November 05, 2021 @05:07PM (#29124758)

> Failing that idea, do you have any tips for frequent American travellers on how to get foreign cash without paying excessive conversion fees?

Many credit union deposit accounts with ATM access can use some foreign ATMs with no fees and reasonable forex rates. Some online deposit accounts with ATM fee reimbursements will also reimburse foreign ATM fees and have reasonable forex rates. Things like Schwab and Fidelity, IIRC. My personal experience is a bit dated, but I'd try to have two separate cards on different networks if possible, because my ATM card only worked in half of the UK ATMs I tried, and that wasn't very convenient, as the ATMs I couldn't used were at the chunnel station and I needed cash for an unlicensed taxi.

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Re:How credit cards make money by divbzero on Saturday November 06, 2021 @02:12AM (#29127929)

I second the parent’s suggestion of using a checking account that supports low-fee foreign withdrawals. Charles Schwab has worked for me at many international ATMs.

Some people advise sticking with four-digit PINs for compatibility with older ATMs [1] but I don’t know if that’s a practical limitation at this point.

[1]: https://www.latimes.com/travel/deals/la-tr-spot-20140713-sto...

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Re:How credit cards make money by hammock on Friday November 05, 2021 @07:10PM (#29125725)

There is usually a fixed cash advance fee to pull money out of a credit card at an ATM. Last i checked it could be $20-30.

There are plenty of debit cards that you can use at foreign atm's with no ATM fee or foreign transaction fee.

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Re:How credit cards make money by leesalminen on Friday November 05, 2021 @05:16PM (#29124836)

I just used a US Capital One 360 debit card to withdraw Costa Rica Colones today. Based on Google’s currency conversion for today, it cost me $0.80 more than it should have. Maybe other banks / countries are more egregious?

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