Beat Forex Fees: Best Credit Cards that offset mark-up fee with Rewards

[sourpai]

Rental mcc is one, here we don't do for Rental, we are paying for a sightseeing or any large organization that comes it's automatically goes to Rental i mean outside countries where vendor has his own categories and there i mean for a foreigner if he has credit card no such surcharge nonsense like india and they swipe they are good to go but we what can we do, now banks have introduced Rental for a person who actually pays rent or tries to rotate money that's the purpose of surcharge. This surcharge has not come like fuel like govt imposed it's imposed by banks. When a person has paid for a sightseeing if the vendor has in Rental mcc where it won't be shown usually that to in foreign transactions you won't have any idea about that. Later to your surprise Rental has been added. During forex transactions no bank adds Rental surcharge either they charge forex or just 0 forex how come Rental is posted for a forex transaction. It's bank classification, so in a case when a customer pays for sightseeing it's the duty of bank when necessary documents proof of tickets, email etc are submitted to bank so bank has to revert the charges and cannot claim Rental surcharge. Reward points i can agree but purpose of buying forex 0 is for this reason where your money is going out of country for the purpose of to avoid such charges they use 0 forex name and charge other nonsense if it was clear cut said or in simple way, i could have used cards which gives more rewards than this card to minimize the risk. What's the purpose when your intentions were genuine but banks classified it as rent (and mcc asking everytime is absolutely rubbish and no one says I have in this or that kindly think before paying)

I think you are explaining things many people know here on TF already.

Let me clarify. MCC is determined by Visa/Matercard networks. It has nothing to do with bank. Lot of vendors are registered under rental MCC and hence once this MCC is detected, bank charges 1%

All Indian banks have started charing for rental MCC. It is not specific to foreign transactions or the bank.

For example - If you buy Dubai monorail ticket from the ticket counter to go to Palm, you get charged as 1% rental fees. The merchant collecting ticket fare is registered as real estate company and has registration under rental MCC. In this case, all Indian banks will charge rental fees not just IDFC

 

[helloworld]

@hellloworld kindly note to check any surcharges etc like useless bank IDFC bank who charges rental surcharge or hidden charges for a forex transactions under the name of 0 forex. Such cards just put disclaimer on such things in the list

Is it wrongly categorized as rent for forex transactions? Offline POS or Online?

 

[helloworld]

which card is best of foreign offline spend

All works for offline too except those mentioned two cards. Let me know if any changes.

 

[helloworld]

I think you are explaining things many people know here on TF already.

Let me clarify. MCC is determined by Visa/Matercard networks. It has nothing to do with bank. Lot of vendors are registered under rental MCC and hence once this MCC is detected, bank charges 1%

All Indian banks have started charing for rental MCC. It is not specific to foreign transactions or the bank.

For example - If you buy Dubai monorail ticket from the ticket counter to go to Palm, you get charged as 1% rental fees. The merchant collecting ticket fare is registered as real estate company and has registration under rental MCC. In this case, all Indian banks will charge rental fees not just IDFC

@bing1309

Agree with it. Even in India if that POS or Payment gateway categorized as rent mcc then we can't do anything. Banks clearly mentioning about rewards or exclusions based on MCC only. Few banks allow further verification but that is only few banks, most of them saying it is what it is. Its always do test transaction or if in doubt utilize milestone card for better rewards, IMO.

What's the purpose when your intentions were genuine but banks classified it as rent (and mcc asking everytime is absolutely rubbish and no one says I have in this or that kindly think before paying)

Btw, its applicable for all banks not only limited to IDFC. If you use any card in that POS, they'll charge surcharge depends on their latest T&Cs. Axis completely not calculating for milestone/annual fee waiver itself if they see Rent MCC.

 

[bing1309]

I think you are explaining things many people know here on TF already.

Let me clarify. MCC is determined by Visa/Matercard networks. It has nothing to do with bank. Lot of vendors are registered under rental MCC and hence once this MCC is detected, bank charges 1%

All Indian banks have started charing for rental MCC. It is not specific to foreign transactions or the bank.

For example - If you buy Dubai monorail ticket from the ticket counter to go to Palm, you get charged as 1% rental fees. The merchant collecting ticket fare is registered as real estate company and has registration under rental MCC. In this case, all Indian banks will charge rental fees not just IDFC

Yes I already know, mcc is determined by visa master etc. But this surcharge is levied by bank not by visa/master. If visa and master it's a different case and i know they won't charge as you know forgin banks who is a foreigner who has cc wont be charged and visa master don't charge such . If bank charges the purpose of charging is determined. Just because it's in rent mcc doesnt mean it can't be reversed. Purpose of rent surcharge added by bank is important and the purpose of swipe by customer also plays a role, the whole situation is explained. So do you think its fair to charge? I don't think so.
Well then only bank exclusion is sbm, fintech or forex cards. (And if mcc is crucial and i have to pay, i won't. if mcc is shown in online payment definitely i won't pay extra for a payment which is genuine i would go by cash.) Hence it's a fight with bank for going under deceiving way. Or master and visa will be bought to rbi to make a rule to show mcc mandatory when a payment is going through.

 

[bing1309]

@bing1309

Agree with it. Even in India if that POS or Payment gateway categorized as rent mcc then we can't do anything. Banks clearly mentioning about rewards or exclusions based on MCC only. Few banks allow further verification but that is only few banks, most of them saying it is what it is. Its always do test transaction or if in doubt utilize milestone card for better rewards, IMO.



Btw, its applicable for all banks not only limited to IDFC. If you use any card in that POS, they'll charge surcharge depends on their latest T&Cs. Axis completely not calculating for milestone/annual fee waiver itself if they see Rent MCC.

Yes but they reverse if your payment was genuine categories with bill submission etc. Every bank does that. But idfc has stopped now.

 

[sourpai]

Bhai.. getting rental MCC on PoS transaction is sheer bad luck... no point in blaming anyone or any bank

 

[helloworld]

Yes but they reverse if your payment was genuine categories with bill submission etc. Every bank does that. But idfc has stopped now.

hsbc, Axis, yes, sbi - won't do that for sure behave like idfc.

as you said, it would be good if they considered bills because they charge based on mcc.

sad to know that idfc also following same.

 

[wiizzard]

Yes I already know, mcc is determined by visa master etc. But this surcharge is levied by bank not by visa/master. If visa and master it's a different case and i know they won't charge as you know forgin banks who is a foreigner who has cc wont be charged and visa master don't charge such . If bank charges the purpose of charging is determined. Just because it's in rent mcc doesnt mean it can't be reversed. Purpose of rent surcharge added by bank is important and the purpose of swipe by customer also plays a role, the whole situation is explained. So do you think its fair to charge? I don't think so.
Well then only bank exclusion is sbm, fintech or forex cards. (And if mcc is crucial and i have to pay, i won't. if mcc is shown in online payment definitely i won't pay extra for a payment which is genuine i would go by cash.) Hence it's a fight with bank for going under deceiving way. Or master and visa will be bought to rbi to make a rule to show mcc mandatory when a payment is going through.

I think everyone needs to understand how credit cards work to understand why this surcharge is needed.

Credit Cards use a concept called MDR to cover for the costs associated with facilitating this transaction. So when you pay 100Rs via Credit Card , 2-3% of that is charged as MDR and the merchant gets the remaining 97/98%.
This MDR is then distributed between the network (VISA/MC/Diners etc.) , the processor ( e.g. PayU, Razorpay ) and the Card issuing bank.
The banks gives this MDR back as reward points to customers.
Now you might be wondering how this MDR is decided? This MDR rate is decided by the networks who create a complex set of rules based on MCC and Card Scheme Type .
So premium card schemes ( Visa Infinite , MC World etc. have higher MDR).
They also define a few categories where the MDR is very low / non existent, an early example of these is Fuel . Since fuel is a very low margin , high volume business, it's not possible to charge a 2-3% MDR on fuel transactions. Hence, banks instead charge a surcharge for these.
Similar is the story for categories like Rent, Utilities etc.
Earlier, India didn't have people paying rent through Credit Cards , so it didn't impact the banks if they gave reward points on a small number of transactions. But with advent of platforms like Cred etc. there was a huge increase in Rental transactions and ofcourse banks had to put a surcharge on these as otherwise they would have started making a loss .

Now, I agree with you that these MCC based rules are unfair for the customer as the MCC is not displayed anywhere when a customer makes a transaction and I think RBI / networks should make this mandatory for the OTP pages and terminals to clearly display the MCC.
But banks are not liable for what MCC merchants use and have no liability to reverse these charges .

 

[drsel]

IMO, when it comes to credit cards, >0% rewards is always better than 0%, especially when dealing with mark-up fees (foreign transaction fee)!

I wanted to share some tips for those of you who frequently travel or make purchases from international websites. You might already know that many credit cards charge a foreign transaction fee (usually 4.13%) whenever you buy something in a different currency. Unfortunately, these fees can eat into any rewards or cashback you’re hoping to earn.

There are credit cards that still provide positive rewards even after these fees, meaning you can earn more than what you pay in fees.

# How it works?
Sample:

Post in thread 'Credit card suggestion for international Payment'

Nov 22, 2022

1. Convert that USD to INR (usually consider settlement date conversion rate).

440 USD = 35928 Rs. (assuming 1 USD = 81.65 Rs.)

+

2. Add markup fee and corresponding GST

(amount × markup fee of that card) + GST

35928 x 3.5% = 1257.48 + 18% GST = 1483.83 (4.13%)

3. Amount you're paying overall in INR.

~ 37422 Rs. you're paying.

---

SBI Cashback mostly will give 5% unless that certification site report as Utility in that case 1%.

Note: Same process for both Credit and Debit Cards, and not all Credit and Debit cards charge 4.13%. There are cards with 0% markup-fee.

• helloworld

• 

# How to choose >0% Card Rewarding After Forex Fees?

• High Reward Rates: Credit cards should provide higher reward rates than they charge as mark-up fee.
• Forex Mark-up Waiver: Some cards reduce mark-up fee from 2% to 0%.

# Credit Cards Offering Positive Rewards After Forex Fees:
Note: Below reward rate is minimum value that you can obtain with that card, more definitely possible if transferred for Miles (2x more value) or depends on redemption.

Credit Card	Reward Rate on International Purchase	Forex Mark-up Fee (incl. GST)	Net Return
BOB Eterna	3.75% (Cashback)	2.36%	1.39%
YES Reserv*	6% (Flights/Hotels) w/3x subscription 3% (Flights/Hotels) w/out subscription	2.07%	3.93% // 0.93%
YES Marquee*	4.5% (Flights/Hotels)	1.18%	3.32%
AU Zenith+	2% (Voucher/Flights/Hotels)	1.18%	0.82%
AU Zenith	2.5% (Voucher/Flights/Hotels)	2.36%	0.14%
StanC Ultimate	3.33% (Marriott/ITC Vouchers)	2.36%	0.97%
HDFC Infinia / DCB Metal	3.33% (Flights/Hotels) w/out subscription 4.33% (Flights/Hotels) w/GVP subscription	2.36%	0.97% // 1.97%
HDFC Millennia / Swiggy^	5% (Cashback)	4.13%	0.87%
SBI Cashback^	5% (Cashback)	4.13%	0.87%
IDFC Wow	0.67% (Vouchers)	0%	0.67%
IDFC Ashva	1.25% (Vouchers) on 40k spends	1.18%	0.07%
IDFC Mayura	1.25% (Vouchers) on 40k spends	0%	1.25%
AMEX Platinum Travel*	5.43% (Vouchers) on 4L spends	4.13%	1.3%
AXIS Atlas*	~5% (Flights/Hotels) on 5L spends	4.13%	0.87%
HDFC Regalia Gold*	~5% (Flights/Hotels) on 5L spends	2.36%	2.67%

* Additional Info:
- YES Reserv vs Marquee reward rate: https://www.technofino.in/community/threads/yes-marquee-vs-yes-reserv-3x-vs-yes-reserv-5x.24652/
- AMEX cards reward rate: https://www.technofino.in/community/threads/amex-mrcc-vs-gold-vs-travel-vs-reserve.30606/
- Atlas vs Regalia Gold reward rate: https://www.technofino.in/community/threads/atlas-vs-regalia-gold-vs-horizon.26500/

More value can be obtained with some milestone cards: https://www.technofino.in/community/threads/credit-cards-with-quarterly-annual-milestones.2491/

^Online spends only. Remaining cards work for both Online and Offline.

These are just a few options, but I’d love to hear what cards you all use for international purchases! Are there any other great cards that help you come out ahead even with forex fees?

You need need to include the cost of the joining fee + subscription fee (3540) for Yes Reserv 3x and the joining fee (11800) of Yes Marquee (less benefits)

 

[nayra]

One Card is a dark horse in the above mentioned list. Easy to get,no charges and almost everytime zero charges on foreign expenses

To add on this, if you get the transaction category eligible to 5x category, you will get 1% points. Conditional but still cool

 

[NOOBY]

Credit Card	Reward Rate on International Purchase	Forex Mark-up Fee (incl. GST)	Net Return
HDFC Millennia / Swiggy^	5% (Cashback)	4.13%	0.87%

Hey, are you sure Millennia gives 5% on international online spends ?

I could see 3.5% markup (which becomes approx 4.13% after GST same as your calculation) but always thought that it would give 1% CB which would mean approx loss of 3%

Asked this as there is an upcoming intl payment coming (in USD, educational) for which I was looking for options when I stumbled upon this post, please share about Millennia CC's intl spend CB category.

 

[Satish]

I have used IDFC WOW card. It's LTF, since it's secured card anyone can get it, zero forex and positive returns

Does it provide return on international transaction?

 

[helloworld]

Hey, are you sure Millennia gives 5% on international online spends ?

I could see 3.5% markup (which becomes approx 4.13% after GST same as your calculation) but always thought that it would give 1% CB which would mean approx loss of 3%

Asked this as there is an upcoming intl payment coming (in USD, educational) for which I was looking for options when I stumbled upon this post, please share about Millennia CC's intl spend CB category.

right, that is for swiggy later added Millennia. Will correct it. t!

Millennia its 1% CB + 1% Milestone + 1% GVP = 3% (net: -1.13%)

 

[helloworld]

Does it provide return on international transaction?

added in post.

 

[amitr29]

Olympus not yet widely available, so kept on hold for now.
M4B is itself an investment like 10L MAB and 35K+ annual fee, not sure will include in list or not. Also, it has that complicated milestone structure. Above list of cards mostly compensated renewal fee with equal points and if any for fee payment returns after fee payment, in that scenario not sure m4b calculations. Anyway, will check and update this card.

I travelled Europe last month and crossed 1.50 lacs monthly spent before leaving. Used M4B everywhere and the returns will be awesome. 35 points on every 200 spent. It's awesome return.

 

[msankadi]

Where is Samsung Axis and Axis Burgundy...I am an LTF Burgundy Salary account holder and these are my goto cards for international spend...I dont even use my HDFC Infinia with Globalvalue activated as these are much better

 

[helloworld]

Where is Samsung Axis and Axis Burgundy...I am an LTF Burgundy Salary account holder and these are my goto cards for international spend...I dont even use my HDFC Infinia with Globalvalue activated as these are much better

Will check update samsung axis.

If allowed can edit the wiki with required changes, if already known. TIA

 

[helloworld]

I travelled Europe last month and crossed 1.50 lacs monthly spent before leaving. Used M4B everywhere and the returns will be awesome. 35 points on every 200 spent. It's awesome return.

Good to know.

 

[helloworld]

Where is Samsung Axis and Axis Burgundy...I am an LTF Burgundy Salary account holder and these are my goto cards for international spend...I dont even use my HDFC Infinia with Globalvalue activated as these are much better

Tried to find related Samsung Infinite:

Gives 15 EP / 100 = 3% ( if 1 EP = 0.2, default value) but charges 4.13% as markup fee, so net (-1.13%). Also, transfer as per this 10:1, couldn't get any positive value.

Axis Bank Miles Conversion - Miles Transfer Program

Axis Bank Miles Conversion. Select credit card holders can convert EDGE REWARD points & EDGE Miles to loyalty program partners across hotels and airlines. Transfer now!

www.axisbank.com

If possible and something wrong with my calculations, could you share International tranvel purchases reward return with Samsung Axis?

Note: Consider alone and not assumed along with M4B.

Axis Burgundy:

LTF currently not available but with 35k fee without renewal benefits + 10L MAB, not a suitable card. Anyway, added as a note for this card since many wanted to include in this list.

Do update about Samsung AXIS reward rate. TIA