[JohnAllman]

What is the difference between the conversion rate and the market rate used, part of the so-called "spread"? Or is the transaction charge the only charge? (The spread is a way of imposing a hidden charge, by converting the currency at a less favourable rate to the customer than the market rate. This creates two rates for each currency pair, depending on which currency the customer is buying and which he is selling.)

2.75% isn't too a bad transaction charge in itself. Even Transferwise charge 1% to transfer money up front to a foreign bank account. But if added to that 2.75% the currency was converted at a rate 2% less favourable than the market rate, the true additional cost for convenience would be 3.75% above the Transferwise benchmark.

[JOEL]

The conversion rate is determined by MasterCard's rate at the time of the purchase. The 2.75% fee, is all we apply to non-sterling purchases. The fees will be itemised under each transaction on the statement to ensure they are made clear to the customer.

[JohnAllman]

Thank you for your prompt reply, Joel. Unfortunately, your telling me that the currency conversion rate is chosen and applied by Mastercard, does not answer my question whether it is a less favourable rate than the market rate, because of a spread, giving rise to a hidden charge.

It is helpful that you have clarified that the conversion rate is the one that prevailed at the point of sale, rather than a some later stage of the processing.

The processing, I have noticed, is very slow. I used my Tesco credit card in a supermarket in Eastern Europe about a week ago. Still there is no sign of that transaction on my account when I look online.

[JOEL]

As the rates are provided by MasterCard, I am uncertain as to whether they would provide the market rate, or a less favourable rate as you've suggested and so would have to refer you to them directly. The only fee we will apply is that noted above. When a transaction is made anywhere, we allow an authorisation period of 7 days from the date of the transaction where the retailer can collect their payment, so it should certainly complete within this time. It is unusual that a transaction would take longer than this, unless the card information was provided to the retailer and they processed it manually at a later date.

[JohnAllman]

Joel, the main thing anybody needs to know, before using his using my Tesco Bank Credit Card abroad, is how much this costs. You apparently cannot tell me that, except to indicate that the cost is at least 2.75% on top (Tesco's cut). You "would" refer me to Mastercard, if I want to find out what cut your partner Mastercard adds on (Mastercard's cut), before the transaction even reaches Tesco. You "would" refer me, but you haven't. There's no link in your reply to a Mastercard website giving the essential information.

My contract is with Tesco. Tesco has a contract with Mastercard. I don't. I therefore expect Tesco to find out and tell me (and the rest of its customers), how much Mastercard adds on to the real value of the transaction, if anything, by the application of one of two different exchange rates for each currency pair, separated by a so-called spread, depending upon which currency the Tesco customer is implicitly buying and which he is implicitly selling.

[CarolineM]

We're unable to confirm this information as Mastercard can change their rates at any time. I have shared a link below which will tell you the conversion in real time. I hope this helps - Caroline

https://www.mastercard.co.uk/en-gb/c...-currency.html

[JohnAllman]

If Mastercard can change their rates at any time, then the customer never has the information needed to make an informed decision whether to pay by Tesco credit card or a different method.

[Lewis_G]

I appreciate what you are saying, however we do try to provide the information our customers require to allow them to make an informed decision. Exchange rates are something that is out with our control unfortunately.

[JohnAllman]

I appreciate what you say too. I am minded to find out how other banks address the problem.

The purchase has now appeared on my online account management. However, it only gives the total deducted in GBP. It doesn't show me the cost of my purchase in local currency, the exchange rate applied, and the transaction fee added, showing me how the grand total in GBP was calculated. When I used a Barclays debit card, all that information was shown on the Barclays online banking service.

This dialogue indicates precisely the sort of information that customers need to make informed decisions as to how to pay for their groceries whilst overseas, whether by cash, or by which of any cards they hold. Barclays does provide that information. Tesco doesn't.

I am making test transactions, using different methods, trying to develop a policy as to which cards even to bother to carry with me when overseas. There is a great big hole in the information available to me, as a result of Tesco not breaking down the final total in the way that Barclays does. I think it might be worth flagging this up in order to determine whether and how Tesco could improve. What do you think?

[KerryL]

When viewing transactions on the app or online banking, you will just see the GBP value. However, on the statement we will break down the rate and the amount spent in both GBP and the non-sterling currency.