Yes, Mastercard generally offers very competitive currency conversion rates, often close to the mid-market or "real" exchange rate, making it a solid choice for international travel. Studies show it is comparable to, and sometimes better than, Visa, with rates usually applied on the date the transaction posts.
Does this mean that you should always use a MasterCard card when you're overseas? All else being equal (leaving aside card fees/rebates/benefits), MasterCard does generally provide the best exchange rates for the cardholder.
The currency conversion rates applied by Visa and MasterCard when you use your card overseas are generally on par with market rates.
Mastercard's exchange rate is typically very close to the Google rate but may be slightly different due to real-time fluctuations and processing costs. However, unlike many banks, Mastercard does not add hidden markups to its exchange rate.
A "good" CAD to USD exchange rate means getting more US dollars for your Canadian dollars, so anything above the recent average of around 0.718 - 0.720 USD for 1 CAD is generally favorable, with rates fluctuating daily, but look for rates closer to 0.72 USD or higher if you're converting from CAD to USD, keeping in mind that the mid-market rate (around 0.72) is ideal, while services add fees.
MasterCard® - Cross Border Fee (CBF)
This MasterCard® fee is in addition to any DCC fee charged by the foreign merchant to accept the purchase in U.S. dollars. For transactions involving currency conversion, MasterCard® applies a 1.0% fee. This fee will appear as a separate line on the cardholder's statement.
MasterCard vs Visa (and why MasterCard is better)
This is because, as per our extensive research, Visa offers worse FX rates than MasterCard in every currency we analysed. This means that in almost all instances, your purchase will be more expensive if you use a Visa rather than a MasterCard on an overseas transaction.
Using a credit card abroad often provides better exchange rates compared to exchanging cash at a currency exchange office or bank.
Mastercard often provides better currency conversion rates for international travelers. Both networks offer comparable security features, with Visa's Advanced Authorization and Mastercard's ID Theft Protection. The issuing bank, not the network, typically determines rewards programs, interest rates, and fees.
The short answer is…you don't lose money when you exchange currencies. If you did, there would be a way to make money. For example, in January of 2016, 1C$=HK$5.37 which means for every Canadian loonie you hold, you would get 5.37 Hong Kong dollars.
The following steps will help you avoid foreign transaction fees:
Currency can fluctuate throughout the day too, with the morning or late afternoon cited as the best times to buy. These are just trends though and the currency markets fluctuate regularly, so keep your eye on them if you're looking to exchange currency soon.
The best Mastercard with no foreign transaction fee is the Capital One Venture Rewards Credit Card because it offers a sign-up bonus of 75,000 miles for spending $4,000 on purchases within 3 months from account opening (the bonus is worth $750 in travel). Plus, you can earn 2 - 5 miles per $1 spent on purchases.
Your Visa or Mastercard credit card is accepted worldwide and gives you access to many ATMs if you need cash. To avoid any unexpected fees and charges, you should factor cash advance fees and International Mastercard or Visa transaction fees into your travelling budget.
The 2/3/4 rule is a guideline, primarily used by Bank of America, that limits how many new credit cards you can get: no more than 2 in 30 days, 3 in 12 months, and 4 in 24 months, helping to prevent over-application and manage hard inquiries on your credit report. While not universal, it's a useful benchmark for responsible card application, though other banks have different rules (like Chase's 5/24 rule).
Though there may be a small fee if you exchange less than a certain amount, your bank or credit union will almost always be the cheapest place to exchange currency.
If you choose to pay in the foreign currency, then the transaction amount is converted by Mastercard using rates that generally reflect either wholesale market rates, or government mandated rates. Exchange rates can fluctuate from the time your purchase is authorised until the time we debit your account.
You are charged a fee of 2.5% of the converted amount, on both debits and credits. This fee is charged on currency conversion. A foreign currency Convenience Cheque or payment is converted at CIBC's branch selling rate for Canadian dollars in effect at the time it is processed by CIBC.