When paying in a foreign currency, Credit cards (unfortunately) always charge a commission hidden in their conversion rate.
For example, a product bought 1000 EUR with an credit card on a USD account may be charged 1150 USD on the credit card statement, while if it were converted with the official day rate it would be only 1115 USD. The difference amounts to a 3% commission on the exchange rate, for the bank...
When entering a transaction in a different currency, Moneywiz takes the official current rate (if connected to the internet) but would not take into account this 3% difference...So the amount that will appear in the transaction is 1115 USD while the credit card will actually charge 1150 USD, or 35 USD more! In terms of accounting, this is not accurate at all and can result in large accumulated differences. furthermore, it creates a lot of confusion and more work when reconciling the accounting...
A fix would be to give the possibility to manually add a commission percentage to the credit card account properties so that this commission is automatically added when paying with this credit card in a foreign currency.
I hope the developers acknowledge this shortcoming and release a fix asap.
Please vote if you would also need this feature!
I am someone who travels regularly, and being a founder of MoneyWiz - obviously using MoneyWiz :) So I know what you mean.
We can easily do the commission thing, the problem is that it doesn't solve what you describe. The reason is that if you enter your transactions manually, you will enter the amount at time X. And your bank will do the currency exchange at the time of posting the transaction, which is time Y. Due to this fact, even if we calculate commissions, the amounts will never match simply because of timing. And when your bank does it is completely unpredictable.
There are 2 solutions to this problem:
* Either use online banking or statements import so you don't enter these transactions manually and don't have to deal with this
* Leave these transactions pending in MoneyWiz and adjust their amount when they clear with your bank and the final amount is known.
If you have better idea, please do tell because in all honesty - I have this problem myself, but in my experience it's just a shortcoming of how the financial industry operates.
Thank you very much for answering and showing interest!
My bank is not supported by your online banking syncronization and does not release text-based or CSV statements that can be imported.
As for the second solution, it is time-consuming to correct sometimes 100s of transactions each month.
As suggested in my post, banks usually charge a fixed, percent-based commission, for foreign currency transactions. My 2 credit cards charge respectively 2 and 3%. This fee is applied to the currency rate at the moment the transaction is made, which is also the moment I enter the transaction into Moneywiz, so the rate downloaded by MW should just be increased by 2 or 3% to give a better idea of the final amount that will be charged in my local currency. Your comment about timing and fees is true, but this is independent from the commission : currency fluctuation will occur between the transaction and when it is entered in MW, but the commission will not be proportional to the exchange rate...I hope this is clear. Does it make sense?
So my suggestion is simply to create a parameter specific to the account, that the user can set to their bank commission, after of course they have calculated it themselves (most often is it not advertised by the bank but 'hidden' in the final charged price on the statement).
What do you think?
I think we can do this if requested by many people, but based on my experience + what you've told me, it seems that different banks handle this differently, so even if we do it it won't work for everyone. In your case it may work, in mine - it won't. My bank does the currency conversion at the time of posting the transaction. Here is what I see:
For example I go to London and do a 10GBP charge. It shows as 13 USD on my credit card (just example numbers) but as Pending. When it clears though it shows as 14USD. This is because they (the bank) authorize the amount based on the current conversion rate but when they post the transaction they post it based on the new conversion rate.