Banks just keep getting richer!

I’ve just been looking through my online statement for my Mastercard, checking out what our recent trip to Syracuse actually cost us. Unfortunately I got a bit of an extra shock (in addition to being shocked by how much was spent) when I noticed that despite the fact that the Canadian dollar was higher than the yankee dollar when we were there, purchases we made using our Mastercard ended up costing us MORE in Canadian dollars than the US price. WTF?!

I called up Mastercard (in this case President’s Choice Financial Mastercard) to see if they could explain what was going on. I knew that I wouldn’t be getting the best exchange rate of the day (which is where I thought they made their money) but I didn’t expect to actually pay MORE when our dollar is HIGHER! As it turns out they charge an “admin fee” of 2.5% on purchases that involve other currencies. 2.5%!!! They are making a killing! It’s my own fault for not knowing though, I’m sure it’s all there in the cardholder agreement. Perhaps it’s time to start shopping around for a new card that I can use while traveling…

Update: Here is the ‘fine print’ about the 2.5% fee from this page.

Foreign currency conversion – if President’s Choice Bank processes a foreign transaction (either a charge or a credit), you will be charged an administration fee of 2.5% of the amount as converted into Canadian dollars.

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