Visa racked up the biggest IPO in history yesterday, despite a looming recession and a popped housing market bubble. One stellar piece of analysis explained why they didn’t have to worry: because they make their money at the moment of the sale and leave the banks to worry if the bills will ever be paid.
All money is in fees, for both merchants and cardholders. That includes 1% on any foreign transactions you make, to which many banks now add a few points of their own. On my well-worn Citibank card, it adds up to 3% on everything I charged on recent trips to Belize and Whistler, Canada.
You’d make out much better paying the occasional ATM fee, if you don’t mind carrying around wads of cash. Bankrate.com also provides a table of various bank’s currency conversion costs - I think I’ll be getting a Capital One card before my next trip!
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