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So, I bought some airfare from a foreign airline, and their payment systems were stupidly slow and outdated (esp. when it comes to refunds!), so slow I actually made money due to the USD appreciating.

I paid for my original ticket using a Capital One visa for say an amount that converted to US $1000.

However, I had to change the itinerary and the additional cost due to the change exceeded my credit card limit, and forced me to use another credit card.

So the airline said they'd refund me the original ticket's cost (to me US $1000) to my Capital One, and I so used another card with a higher limit to buy the new changed ticket.

It took the airline almost 30 days to issue the refund. They took so long it fact that the refund (credit) on my Capital One showed as US $1020!

I guess when they converted from their currency to USD there was a different foreign exchange rate!

So my question is, will the credit card company remove the US $20 "profit" this transaction created and keep it for themselves? Or I am entitled to have that as credit for me on my credit card statement?

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2 Answers 2

up vote 5 down vote accepted

No, the credit company will not remove the $20. Your merchant (the airline) charged in their local currency, the equivalent of $1000. That is also what they refunded. The $20 are yours to keep.

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That's awesome! thanks –  unknownprotocol Apr 22 at 3:50

Which was the foreign airline and what currency do they bill in? It's surprising to think there could be an FX exchange gain, after 30 days, considering the "Thomas Cook" high street spreads you (or your credit card company) ought to be being charged...

In other words the rate would have to move at least 20% before you saw any FX gain from bid to offer.

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VISA charges card issuers < 1% for forex. The issuer may then charge the user whatever it wants; let's assume another 2%. Say the OP was dealing with a Brazilian airline, where the currency fell 6.8% vs USD between 3/12 and 4/11 this year. If the OP bought on 3/12 and was dinged 3% total, then his $1000 purchased a 2282 BRL ticket. If the airline refunded 2282 BRL on 4/11 (again minus 3% in fees), then the OP would have been credited $1010. If it was a different currency or the intermediaries were even a bit more generous, then it's easy to imagine a $20 delta on $1000 initial amount. –  dg99 Apr 22 at 20:16
    
@dg99 - Some Capital One cards (like the Venture card) have no foreign currency fee, so (as you say) it's possible to make a profit with a much smaller currency movement. –  Rob Hoare Apr 22 at 21:08

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