[e63f67dd-065b]

The FX spread is fixed at around 25-50bps for Mastercard/Visa due to a settlement long ago. The foreign transaction fee is an additional charge on top of that, usually 3% of the gross transaction volume in USD.

The banks don't control the exchange rate, it's determined by the card network. So yes, when a card advertises 0% foreign transaction fee, it really does mean that they don't take an additional charge on top of the spread (which they don't control or profit from).

It's in fact quite easy to pay less than 100bps for a foreign currency transaction; everybody with a 0% FTF card is doing it right now (especially for high volume corridors like EUR/USD).

> No fees, plus 1% or less FX spread on major currencies. (My preferred credit card promises that.)

You bank can't promise what they don't control; Visa and Mastercard determines FX rates, and they're below 100bps because of an old settlement. So the bank is promising you something they had no role in creating; you're the one here falling for the marketing, not everybody else.

[yawn22222]

I think as a card provider you still make money on this, from what I remember the card provider can settle directly with the scheme for foreign transactions the next day. There's still a good margin on the mastercard rate, I've definitely observed more than 50bps spread, but that's GBP -> THB etc.. Would a fulltime forex trader cost more though?