Yahoo Finance 5 Ways to Minimise Your Credit Card Overseas Spending Fees
Using your credit card when you’re on holiday sure beats hiding wads of cash in your socks and underwear to deter thieves. It also saves you from having to make a trip to Mustafa to exchange currency each time you’ve got an overseas holiday lined up.
But of course, with all conveniences, there are costs involved. Each time you use your credit card to pay for something overseas, you pay extra charges and fees that could make your holiday a little bit more expensive.
1. Compare the fees being charged by each of your cards
As you can see, most cards will charge a combination of the above three types of fees. At the moment, there is no difference between the MasterCard and Visa fee when you use your cards overseas. You will thus want to compare the total cross-border transaction fee + currency exchange fee being charged by each of your cards.
The easiest way to find out is simply to call up your bank and ask. Your fees will vary based on:
The bank issuing the card
Whether it is a Visa, MasterCard or Amex
Any waivers or discounts on foreign transaction fees / foreign exchange fees specific to your particular card
2. Never choose to pay in Singapore dollars when you’re abroad
If you’ve ever tried to use your credit card overseas, you might have been asked by the cashier if you wanted to pay in Singapore dollars or the overseas currency.
Always, always choose to pay in overseas currency.
When you choose to pay in SGD, you are charged dynamic currency conversion fees that will tack on an extra percentage to your bill in exchange for the convenience of being able to see how much you’re paying in Singapore dollars.
What’s more, if your credit card company is offering you better cashback, rewards or miles for foreign currency spending, opting to pay in SGD could mean these transactions get counted as SGD transactions and do not qualify for the better perks.
Make sure you pay attention when you swipe your card and alert the cashier that you wish to pay in overseas currency, otherwise they might just carelessly select SGD for you.
3. Consider opening a multi-currency account
If you’re a real jet-setter, you might want to consider getting a multi-currency account such as the DBS Multiplier Account.
You can then wait to exchange SGD with your currencies of choice when the exchange rates are favourable, deposit that money into your account and use your debit card to pay for stuff when you’re travelling, or simply withdraw cash at your destination. This will enable you to escape currency conversion and foreign exchange fees altogether.
Of course, there are still some risks to using a debit rather than a credit card. If you later want to dispute a charge because you were scammed or your card was fraudulently used, the process will be a bit more stressful as the money will have already been deducted from your account. You nonetheless retain the same rights to dispute charges as credit card holders.
4. Or, you might want to have a multi-currency mobile wallet
You don’t need to specially open a multi-currency bank account to enjoy the benefits of a multi-currency account. You can just have a multi-currency mobile wallet, in an app.
There are quite a number of new players in this field as well — compare them here:
Digital Multi-Currency Accounts For Travel & Remittance: YouTrip vs TransferWise vs Revolut vs InstaReM
So if you are sick of paying overseas transaction fees, know that cash is not your only option. You can carry one of these multi-currency travel cards and convert the currency on the go, without paying hefty currency exchange fees.
5. Use a card that rewards you for overseas spending
If you cannot avoid paying the overseas transaction fees for your credit card spending overseas, at least ensure that you are rewarded for overseas spending.
For instance, the UOB Visa Signature Credit Card offers 10X rewards (or 4 miles per dollar) on all overseas transactions, including those made online. If you’re a miles chaser, you may just find that this compensates for the various extra fees charged.
Depending on your unique spending habits, there’ll definitely be a “best” card for your overseas spending. Compare all the cards by reading our article on the Best Credit Cards for Overseas And Foreign Currency Spending.
Some of the frontrunners include:
Earn Miles That Don't Expire
OCBC 90°N Card
More Details
Key Features
8 miles for every S$1 spent on selected travel and hotel partners
4 miles for every S$1 spent on selected airlines, entertainment and shoppings
2.1 miles for every S$1 spent overseas
Every S$1 spent earns you Travel$, where 1 Travel$ = 1 KrisFlyer mile with no conversion fee
No cap on the amt of Travel$ you can earn and no minimum spending
First year annual fee waivered; earn 10,000 miles when you pay for annual fee from second year onwards
1.2% cashback from your earned Travel$
High Miles Earn Rate
UOB PRVI VISA Miles Card
More Details
Key Features
Earn 6 miles with every S$1.00 spent on major airlines and hotels booked through Expedia, UOB Travel, and Agoda
Earn 2.4 miles for every S$1.00 spent overseas (including online shopping from overseas websites), and 1.4 miles for every S$1.00 spent locally
Choice to redeem for miles, cash rebate or vouchers
No minimum spend and no cap on earned miles
Complimentary personal accident coverage and emergency medical assistance of up to S$500,000
Maybank Family & Friends Card
More Details
Key Features
Up to 8% cash rebate on all restaurant spends in Singapore and Malaysia
Up to 8% cash rebate on and data communication & online TV streaming
Up to 8% cash rebate on petrol and groceries including online gorcery stores spend in Singapore and Malaysia
Up to 8% cash rebate on selected shopping stores, contactless bus and train rides, taxi and all passenger transportation servcies such as Grab and GOJEK
8% or 5% cash rebate with lowered minimum spend of S$800/S$500 per month respectively. Cash rebate cap at S$80 per month
0.3% cash rebate on all other spend with no cap on cash rebates
3 years annual fee waived; spend min. S$12,000 per year to get subsequent waiver
6. Alternatively, link your current cashback credit cards with the Instarem Amaze Card
The Instarem Amaze Card is like a VPN for your credit card – you get away from the forex fees by linking it with your credit card. Your transactions will have the *Amaze affix, which is based in Singapore and you can stack your current cashback rewards with the Amaze card’s 1% cashback reward!
The downside is that it only works with Mastercard-issued credit cards, and you can only link up to 5 of them. You can freely swap between them within the app.
Here are the best cashback credit cards to link with your Instarem Amaze Card:
MoneySmart Exclusive
Faster Gift Redemption
Citi Cash Back+ Mastercard®
MoneySmart Exclusive:
FASTER GIFT REDEMPTION! Get S$350 Cash via PayNow OR a FREE Apple Watch SE (worth S$419) when you spend a minimum of S$500 within 30 days! Redeem your free gift as fast as 6 weeks from Credit Card approval. T&Cs Apply.
Valid until 15 Mar 2022
More Details
Cash Back Features
Flat 1.6% cashback on all your purchases, no minimum spend
No caps on the cashback you can earn, and cashback earned does not expire
Cashback earned will be stored and specified in the monthly statement
Redeem your cashback with the Citi Pay with Points feature via Citibank Online or the Citi Mobile App or SMS. Redemption requires 7 working days before it’s reflected on your statement
Cash rebates redemption: Send “RWDS last 4 digits of the card number ” to 72484 via SMS
Redemption values and codes: CSHBK10 for S$10, CSHBK20 for S$20, and CSHBK50 for S$50
For example, to redeem $10 cash rebate, the SMS should be: “RWDS XXXX CSHBK10”
General exclusions apply, for e.g. annual fees, instalments, bills, payments to educational, governmental, and financial institutions, insurance premiums, and more
MoneySmart Exclusive
With 3-month Disney+ Subscription
Standard Chartered Unlimited Cashback Credit Card
MoneySmart Exclusive:
Apply and spend $250 to get an Apple AirPods (3rd Generation) [worth $269] or $250 Cash via PayNow. T&Cs apply.
Valid until 31 Mar 2022
More Details
Cash Back Features
1.5% cashback awarded for all eligible purchases, such as dining, online shopping, local and overseas spend
Cashback terms and conditions: General exclusions such as bills, payments to educational, financial, and governmental institutions, and GrabPay top up apply
MoneySmart Exclusive
Faster Gift Redemption
Citi Rewards Card
MoneySmart Exclusive:
FASTER GIFT REDEMPTION! Get S$350 Cash via PayNow OR a FREE Apple Watch SE (worth S$419) when you spend a minimum of S$500 within 30 days! Redeem your free gift as fast as 6 weeks from Credit Card approval. T&Cs Apply.
Valid until 15 Mar 2022
More Details
Rewards Features
Base reward points earn rate: 1X Reward per S$1 spend
10X Citi Rewards program gives you an additional bonus of 9X Rewards points per S$1 spend on eligible categories on top of the base rate, effectively totalling to 10X Rewards (or 4 miles equivalent)
10X Rewards a10X Citi Rewards Program cap: Bonus rewards points capped at 9,000 Rewards points per statement month at 10,000 Points per statement month
Eligible Citi 10X Rewards program categories: Online and shopping, rides with Grab, Gojek and more, online food delivery, online groceries
Redeem rewards points across multiple categories via the Citi ThankYou Rewards catalogue site for Apple AirPods with charging case for 74,200 Points, shop with points at Amazon, cash rebates, and more
Rewards points expire in 60 months (5 years)
What overseas spending fees do you incur when you swipe your credit card?
While the charges for using your card overseas can vary from card to card, in general they look something like this:
Currency exchange fee or currency conversion fee
Cross-border transaction fee or foreign transaction fee
MasterCard/Visa fee
Amex is both an issuer and a payment network, so it has a different system that will have you paying a flat fee, but all in all you’re looking at paying about 2.5% to 3.3% in fees.
Do you really need credit card overseas activation?
You will need to activate your credit card for overseas usage only if the country you are going still depends on the magnetic stripe.
There are some overseas transactions that do not depend on the magnetic stripe, and hence you need not activate your card. These include point-of-sale EMV chip, eCommerce and overseas recurring transactions. The EMV chip is a small metallic square you can find on your card.
As EMV-based transactions are safer, they getting more commonplace now, with many European countries and Japan already on board. However, some countries like US and South Korea are still heavily reliant on the magnetic stripe.
To activate your card for overseas usage, you may call, log into Internet Banking, or SMS your bank.
Do you usually use your credit card when you’re abroad? Tell us why or why not in the comments!
The post 5 Ways to Minimise Your Credit Card Overseas Spending Fees appeared first on the MoneySmart blog.
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Original article: 5 Ways to Minimise Your Credit Card Overseas Spending Fees.
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