What exchange rate do credit cards use?

Credit card networks, such as Visa, Mastercard, and American Express, are responsible for facilitating these transactions. They rely on conversion rates to determine the value of the foreign currency in terms of the cardholder's local currency.

When traveling abroad, individuals often rely on credit cards for purchases. However, these transactions are subject to a currency exchange rate. The standard exchange rate for credit card purchases made outside of one's home country is typically within the range of 2-4%. This rate can significantly impact the overall cost of goods and services purchased.

The conversion rates used by credit card networks are based on interbank rates. These rates represent the exchange rates at which banks trade currencies with each other. The networks select these rates from customary industry sources, ensuring they are accurate and up-to-date.

The interbank rates used for credit card conversions are determined on the business day prior to the processing date. This means that the exchange rate applied to a transaction can vary depending on when the transaction is processed.

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