Carded Rate
The standard exchange rate displayed by banks for retail customers, typically less favourable than interbank rates.
The carded rate is the retail exchange rate banks quote to customers, marked up over the interbank rate. The gap is the bank's margin, significant on small transactions.
The carded rate is the posted exchange rate that banks and currency exchange services offer to retail customers. It includes a markup over the interbank rate, which is the rate banks use when trading with each other. The difference between the carded rate and the interbank rate is the bank's profit margin, and it can be significant, especially for smaller transactions.
How It Works
- Banks set carded rates by adding a margin (often 1-3%+) to the interbank rate
- Updated periodically throughout the day but lag behind the live interbank market
- Different banks offer different carded rates for the same pair
- Larger transactions may qualify for better rates closer to the interbank rate
Trading Tips
Retail forex brokers offer rates much closer to the interbank market than bank carded rates
Compare carded rates across multiple providers before exchanging physical currency
Airport exchange kiosks have the widest markups. Always exchange currency before arriving at the airport.
Carded Rate Example
Say your bank carded rate offers 1.32 dollars per pound while interbank trades 1.35. On a $10,000 holiday exchange that gap costs you $300 against the real rate. A specialist broker at 1.348 would have cost $20.
How Traders Use Carded Rate
Never accept carded rates for size: compare one specialist quote first, every time. Banks count on haste. For transfers above a few thousand, the ten-minute check pays hundreds.
Related Terms
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