Chase eliminates foreign transaction fees on MileagePlus Explorer Card as of June 1, 2013

Chase announced today that starting June 1, 2013, the MileagePlus Explorer Card will no longer have a 3% foreign transaction fee.

Chase is very much an industry leader when it comes to foreign transaction fees, far ahead of American Express, Barclaycard, and Citi, all of which don’t waive foreign transaction fees on a majority of their “middle of the road” products. Chase, meanwhile, has no foreign transaction fees on many of their cards, including the Sapphire Preferred, Ink Bold/Plus, British Airways Visa, Hyatt Visa, Marriott Visa, Priority Club Visa, and more. So if anything the Explorer Card was an outlier for Chase by having foreign transaction fees.

The card has some good benefits though still isn’t the best all around for spend abroad, in my opinion. The Chase Sapphire Preferred still gets you double points on dining and travel, and I don’t know about you guys, but when I’m abroad that encompasses about 90% of my spend, between hotels, flights, train tickets, food, and other transportation.

Comments

  1. I’ve noticed that on my chase sapphire preferred card that the currency exchange rate is not as good as my Amex plat card. I think the rates chase uses is not as favorable, even though they don’t charge a transaction fee..

  2. @SPGGuy: Yep, I’ve noticed the same thing. Chase buries the “fee” in the exchange rates on their no fee cards.

  3. Spgguy that’s interesting as I’ve always heard they use a rate that’s pretty darn close to the interbank rate.

    Ben since I think you’re abroad soon

  4. I could be wrong, but isn’t exchange rate more dependent on the payment network rather than the issuing bank itself? I think there was a good discussion on MilePoint regarding Visa vs Mastercard fees and somebody did an experiment with two Chase cards – 1 visa and 1 MC.

    May be Amex gets a better rate than Visa and MC.

  5. @Spgguy @Patrick

    I’ve had a different experience on CSP and Chase Priority Club in French Polynesia last summer. When I checked the rates used on transaction date with the same date on Google Finance/Yahoo Finance they were fair to 3 decimals. Arguably anything beyond 3 decimals is immaterial…

  6. Spgguy that’s interesting as I’ve always heard they use a rate that’s pretty darn close to the interbank rate.

    Ben since I think you’re abroad now maybe you can do an experiment and make a charge on both cards at about the same time for sale amount and report back to us.

  7. My experience with the CSP crad has been they have always been almost exactly the same as the interbank rate at the time of the transaction (with slightly more variance in Chile & Argentina than in euro-land)

  8. DL’s comment reminded me of something that can also cause a difference: less illiquid will carry greater bid-ask spreads, which can make exchange rates seem less than fair when comparing with a more simplistic source like Google Finance or Yahoo Finance.

    In other words, the rate you get will likely seem/be fairer if you’re using your card for Euro or Yen purchases than if you’re using it for purchases in Soles (Peru) or Tenges (Kazakhstan)

  9. chase uME biz cards gives 2 miles for food gas and office supplies.
    even witht hat and no forex fee, $95 annual fee is not worth

  10. So I did a bit of foreign spending on different items recently at similar but not the same times. There was a small but consistent 0.5% or so difference in the exchange rate, between Amex and Chase. Of course this isn’t scientific and maybe the exchange rate was just fluctuating.
    I was getting a 3% fee on my Amex which negated any conversion rate savings as well. So an Amex without an exchange fee may be a worthwhile investment for the heavy traveler?

  11. This will be useful for car rentals abroad thanks to their primary insurance. Still hard to justify the annual fee, I may switch mine to a Freedom when it comes due.

  12. @Points Surfer

    The current bid-ask on PEN-USD is 0.378358/0.378644. I think it is safe to assume that Chase is able to leverage the JPMorgan FX trading to trade at very favorable levels, even with less liquid currencies.

  13. DBest, unless you have a car insurance that specifically extends your coverage internationally (most do not), all cards offering secondary automatically switch to primary when renting internationally.

  14. @Jon

    JPM can definitely leverage their FX desk to trade at very favorable rates, in fact they are likely market makers in many of the currencies, but why should they not charge us, mere cardholders, the bid-ask spread. After all that is part of their bread and butter.

    With the spreads I see as of close of business yesterday you would lose $5 on $2,500 worth in a PEN transaction, while you would lose just $0.20 on an equivalent EUR transaction. Material? Maybe for some, after all it is 20 basis points versus 1.

    But does it come close to the 3% foreign transaction fee on many cards? Not at all, and you are absolutely in your implication that the bid-ask spread is insignificant compared to the usual 3% fee.

  15. Southwest Premier also no longer has a transaction fee as of this year.

    Still, annual fee.

  16. Rami – Sam’s point is that, since your own car insurance doesn’t cover you internationally, the CC coverage is all you have. That’s what he means by “primary”.

    Is a pattern developing here? With Southwest and now MP Explorer, Chase introduces their cards with foreign transaction fees, then later touts a “new benefit – no txn fees”.

  17. I’ve noticed no foreign transaction fees on my chase freedom card for Mexican airline tickets and hotels in Mexico, previously I would book anything in Mexico with my navy federal Visa card and would only be charged 1% but in the last month I’ve booked 2 flights to Mexico and a hotel and was not charged any type of foreign transaction fee.

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