When you travel abroad, you need a credit card. A Belgian Maestro debit card won’t be very useful in most countries. So, The credit card. What do people look for when picking a credit card? I reckon the most important thing you’ll look for is the annual fee and the credit limit. Some might not even compare prices and just take the card from the bank with their debit account. After all, a credit card is a credit card? You’d think the difference between them is little to none-existent, but you’d be wrong. The difference between 2 visa cards can be huge. Pick the wrong one as a traveller and you might end up paying € 300-400 more in hidden costs and fees.
Using a credit card in shops is always free*. So in that respect all cards are indeed the same. So what’s the problem? Withdrawing money from an ATM and paying in different currencies often have (hidden) fees
*unless you use a prepaid card like Mobile Vikings where you pay 3% just to top it up
The Conversion Fee
When you use your credit card abroad and pay in a non-euro currency, the statement will convert the foreign currency into Euro using a certain rate. This rate (the conversion rate) is defined by The European Central Bank and is fluctuating all the time. If you’d use your card 5 times in 1 day, you might see 5 different rates on your statement. What you probably don’t know is that banks are charging you a certain percentage for converting foreign currencies into Euro, called the conversion fee. This fee doesn’t show up in the statement. The conversion rate shown there will simply be lowered for Visa and Mastercards. Only American Express shows the real conversion rate and separates its fees. Belfius for example has a 1% fee on all its cards. That’s the lowest of the big banks. ING, Recordbank and Keytrade have 1,4%. BPN Paribas has a 1,6% rate. American Express cards have a 2,5% rate. The mobile Vikings prepaid Mastercard has a whopping 5,75% rate. You don’t want to be paying a 5,75% extra on everything you buy, right?
The conversion fee only applies for non-euro payments. In some airport shops they might convert the foreign amount to Euro before you pay. That is often an even worse idea. The rates are usually between 3% and 7%. The merchant is earning the extra percentage. Paying in the local currency is always cheaper. Always make sure they charge you in the local currency.
Withdrawing money from an ATM
Withdrawing money from an ATM abroad is something I personally do regularly. It’s the best way to get some local banknotes. The exchange offices in airports are usually huge rip-offs. The fee you pay for withdrawing money can, again, be very different between cards. Examples! Belfius: A fee of € 5,00 + 1% conversion fee. Record bank: 3,5% fee for withdrawing + 1,4% conversion fee makes a whopping ≈4,9%. Amex can top that easily. 3,5% fee for withdrawing and 2,5% conversion fee makes ≈6%. Withdrawing an equivalent of € 100,00 makes you about € 106,00 lighter.
Surprised by the rates? They are usually very deep down in Terms of Service and Agreements. The rates are defined by the banks themselves. Only AMEX picks its own rates, and those are the same for all AMEX card in Belgium. VISA and Mastercard rates are chosen by the banks who hand them out. Within a bank, the rates for both these cards will be the same. A Visa classic from Belfius will have the same rates and fees as a Belfius Mastercard platinum. The only bank not applying this is Citibank.
When you are a frequent traveller and are spending lots of money in non-euro currencies you can see the annual fee is the least of your problems. Picking the wrong card can set you back € 300-400 annually. So is there a right card? Yes there is!
How are calculations made
It is important to note you can not simply add the conversion fee and the withdrawal fee together. It is a bit more complicated. I’ll explain this with an example. Let’s say I withdraw MYR 400 from an ATM with my American Express card.
- First the foreign sum is converted to Euro following the official European Central Bank rate (MYR 400,00 /4 = € 100,00)
- Then the conversion fee is applied (€ 100,00*102,5% = € 102,50)
- On top of that the withdrawal fee is applied (€ 102,50*103,5% = € 106,09)
- Finally a fixed sum (if any) is added for the transaction (this is € 0.00 for American Express)
The actual fee for withdrawing foreign money with American Express is about 6.09%
Some popular cards compared
I have compared some of the most popular credit cards in a real life example. For the comparison I am using the following numbers:
- Withdrawal of € 500 in an Euro country (but not Belgium)
- Money withdrawn from ATM (non Euro): equivalent of € 3000 in 6 withdrawals.
- Money spent with card (non Euro): equivalent of € 4000
I don’t care about your Euro payments on the card, because those will be free for any card.
|Belfius Mastercard Red||Withdraw 500eur||€ 5,00||€ 5,00|
|Withdraw 6x equiv 500eur||€ 5,00 + 1%||€ 60,00|
|Spend equiv 4000eur||1%||€ 40,00|
|Record bank Visa Classic||Withdraw 500eur||1%. Min € 2,48||€ 5,00|
|Withdraw 6x equiv 500eur||3,5% fee + 1,4% conv rate||€ 148,47|
|Spend equiv 4000eur||1,4% conv rate||€ 56,00|
|Brussels Airlinex AMEX||Withdraw 500eur||3,5% min € 5,00||€ 17,50|
|Withdraw 6x equiv 500eur||3,5% fee + 2,5% conv rate||€ 182,63|
|Spend equiv 4000eur||2,5% conv rate||€ 100,00|
|Mobile Vikings Prepaid Mastercard||Withdraw 500eur||€ 3,00 + 3%||€ 18,00|
|Withdraw 6x equiv 500eur||€ 3,00 + 5,75%||€ 192,98|
|Spend equiv 4000eur||5,75%||€ 233,30|
|BNP Visa Classic||Withdraw 500eur||1% min € 5,00||€ 5,00|
|Withdraw 6x equiv 500eur||€ 4,00 + 1,6%||€ 72,00|
|Spend equiv 4000eur||1,6%||€ 64,00|
|ING Visa Classic||Withdraw 500eur||€ 4,96 + 1%||€ 9,96|
|Withdraw 6x equiv 500eur||€ 4,96 + 2,4%||€ 102,18|
|Spend equiv 4000eur||1,4%||€ 56,00|
|Keytrade Visa Classic||Withdraw 500eur||1% min € 2,50||€ 5,00|
|Withdraw 6x equiv 500eur||€5,00 + 3,4%||€ 132,84|
|Spend equiv 4000eur||1,4%||€ 56,00|
|Citi Belgacom Club World Mastercard review by OpenJaw||Withdraw 500eur||2,5% min € 5,00 max € 15,00||€ 12,50|
|Withdraw 6x equiv 500eur||2,5% min € 5,00 max € 15,00 + 2,29% conv rate||€ 145,42|
|Spend equiv 4000eur||2,29%||€ 91,60|
|BKCP Visa Classic||Withdraw 500eur||€ 0||€ 0,00|
|Withdraw 6x equiv 500eur||€ 5,00||€ 30,00|
|Spend equiv 4000eur||0%||€ 0,00|
The best card?!
Clearly the BKCP Visa Classic card is the winner! This card is quite simply stunning compared to all other available cards. Withdrawing money from within the Euro-zone is absolutely free. This is basically a free cash loan! Withdrawing money from anywhere else in the world sets you back €5,00. On every non-euro payment there is a 0% conversion fee. This is the only card in Belgium with a 0% conversion fee!
The card has to be linked to a BKCP bank account. An account with a VISA classic card will set you back € 57,84 per year. You can also opt for Visa Gold. That’s €20,00 extra per year. This might seem like a lot of money, but in most banks an account is not free.
Runner up, and best of the big banks is Belfius. An account and Belfius Red card will set you back about €50,00 a year. Spending that same amount on a Belfius Mastercard Red will set you back € 105,00 compared to € 30,00 with BKCP
The Record Bank Visa Classic shows that free isn’t always as free as you’d think. A debit account and Visa Classic at Record Bank is completely free. But spending the amount on that Visa would cost you € 209,47!
Real travellers might already have the Brussels Airlines American Express card. Great to collect miles for Brussels airlines! Not so great outside of the Euro zone. The card would have cost you € 300,12 in fees!
So back to the BKCP card. The bank might not ring a bell to most but they do have privately run offices all over Belgium. They are slightly apprehensive on handing out Visa cards. The card is not something they advertise with, although it has awesome value. I had to request the T&C by mail! The office I opened an account at requested to see my last 3 payslips for requesting a Visa (Since I got no history there). The monthly limit is € 1250 by default but I have requested to up that permanently to € 1500. That wasn’t a problem. I’m going to apply for the Visa Gold in a few months’ time because of the higher limit (€ 3750) and better insurance.
Dutch speaking people can check the rates of their credit card at Spaargids.be