A primer on overseas credit card usage (Updated with new rates)

Foreign currency fees are probably one of the most confusing aspects of credit cards. Banks hide them away in the small print, and very often you only find out how much you really paid after you get your bill.

The question today is: Is it worth it to pay with your credit card overseas in order to earn miles? 

It might be helpful to read a brief refresher on what the value of a mile is, because that affects your answer.

First, what happens when you charge something to your credit card overseas? You get hit by several fees

(1) The currency conversion spread

The practice most banks have for foreign currency transactions is to convert them into USD before converting into SGD.

If you’re interested in seeing how Visa does this, you can play with their converter here

For illustration, suppose you buy something online costing 10 Euros.

Step 1: 10 Euros= 11.18 USD

Step 2: 11.18 USD= S$15.78

For reference, the spot rate for Euro to SGD is 1 Euro= $1.5642. This means you are paying a spread of 13.8 cents, or 0.88%

(2) Bank Fees

Your bank will charge you a fee for using your card overseas. DBS for example, charges 1.5% and 2% for foreign currency transactions on Visa/MC and AMEX respectively.

(3) Visa/Mastercard/AMEX Fees

Visa/Mastercard/AMEX will also charge a fee for using your card overseas. This is generally 1%

So straight off the bat, you’re looking at a 3-4% surcharge on whatever you’re buying. Is that a good deal? Consider 2 scenarios

Scenario 1:

  • Using UOB PRVI Miles Card with 3.25% fees + 0.8% spread for 4.05% total surcharge.
  • Earn 2.4 miles per S$1
  • 2.4 miles are worth 9.6 cents if you redeem for business, but let’s be conservative for this analysis and give them a value of 2 cents each.
  • This means for each S$1 you spend, you earn 2.4 miles or 4.8 cents worth of value. 4.8% rebate vs 4.05% surcharge- you come out on top, but barely. You might be better off exchanging money at The Arcade for a 2-3% spread.

Scenario 2:

  • Using UOB Preferred Platinum AMEX card with 3.25% fees + 0.8% surcharge for 4.05% total surcharge
  • Earn 4 miles per S$1
  • 4 miles are worth 16 cents for business class travel, or 8 cents if you take a value of 2 cents per mile
  • This is an 8% rebate on the lower end, so you clearly come out on top here

Bank + Visa/AMEX/MC Fees for Major Banks

UOB2.5%3.25%PRVI MC/Visa- 3.25%
Maybank2.5%N/A2.75% for Visa Diamante, Infinite and World MC
CIMB2.4%N/A1% for CIMB Plat MC and Visa Sig


  • Remember that the “true” cost of the transaction will include a ~0.8% foreign currency spread which is not reflected in the table above
  • Looking at this table, I can understand why UOB offers such a generous overseas spending bonus on its PRVI cards. You’re basically paying for the privilege through a 3.25% fee
  • I also understand why DBS offers only 2 miles (vs 2.4 for UOB PRVI) on its Altitude cards, when you consider that they charge less than UOB. (EDIT: Since this article was originally published in Feb 2016, DBS has increased its Visa/MC fee from 2.5% to 2.8%, closing the gap somewhat)
  • When spending overseas and using your DBS Altitude card, it makes no sense to use the AMEX over the Visa, because both earn 2 miles per $1, yet the AMEX version has higher fees
  • Standard Chartered levies the highest fees (3.5%) on Visa/MC transactions- crazy, considering they lack any good rewards card for overseas spend
  • Similarly, I chuckle at OCBC’s audacity to charge 2.8% on overseas transactions for the same reason


Whether or not you want to use your card overseas depends on how you value your miles. I think it’s a pretty good deal to use your specialised spending cards overseas, because 4 miles per $1 would surely exceed any transaction fee levied. General spending cards are a bit more of a marginal proposition- if you’re determined to redeem for first class flights only, then you would get some value out of this.

If you’re not keen on paying foreign transaction fees, you may want to consider the CIMB Visa Infinite or BOC Visa Infinite. However, even though CIMB/BOC do not charge the bank levied fee, you will still have to pay the 1% fee levied by Visa. Also, these are cashback cards and won’t earn you much in the way of miles. And with income requirements of $120,000 each, they’re not exactly the most accessible of cards.

P.S: Since we’re talking about using your credit card overseas, it’s only apt that I insert a warning about the scam of DCC. DO NOT FALL FOR DCC. It is the most cynical ploy ever, and with more places automatically offering you this “convenience” without asking you for permission we need to be extra vigilant about falling for it. DCC does nothing for you, denies you the opportunity to earn miles for overseas spend and on top of that, the bank still charges you a 0.8% fee on DCC transactions. So you lose out on the exchange rate, you lose out on the miles, you lose out on the 0.8% fee. You owe it to all your friends and loved ones to warn them about this scam and make sure they don’t fall for it. [/PSA]

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29 thoughts on “A primer on overseas credit card usage (Updated with new rates)”

    1. i don’t know, unfortunately. interesting question though, i assume you’re asking whether you’ll get hit by a 0.8% fee for an SGD transaction processed outside singapore (as happens to uber transactions with some banks). I’m sure the gurus on HWZ will know though

    1. 2.5%. I see what you’re getting at here- how can UOB offer to pay 4 miles per $1 when they’re only taking a 2.5% fee. I suppose that’s why (1) a minimum spend of $1,000 per month is required, (2) they cap it at $2,000 and (3) they’re no longer (officially) issuing this card. I spoke to a guy at OCBC cards team before and he told me that promotions like this (and DBS’s 4 miles per $1 for woman’s card) are basically loss leaders for the banks. they lose a bit of money on these rewards but hope that (1) the points expire without use (2) people use the card beyond the $2k threshold due to forgetfulness/laziness (3) this creates an agglomeration effect whereby people use other DBS/UOB cards to pool more points

  1. Hi Aaron how about using prepaid card for overseas transaction (top up with DBS Woman MC); U always get 4 miles/$ for any kind transaction (limited up to 2000)

    using M1 prepaid mastercard : 2.5% mastercard fee + 1% top up fee (this is the disadvantage using prepaid mastercard but mastercard accepted worldwide )
    using Amex imagine prepaid : 3% amex fee (but no top up fee)

    And i check sometimes the rate given by mastercard/amex is better than money changer

    1. I’ve used AMEX Imagine on a few overseas trips quite successfully. The AMEX wallet even works as an electronic ticket on the London Underground!
      One thing to be aware of is that the overseas service charges are billed separately in your transaction list, but I’ve accepted that its actually a more honest way of accounting for the costs than the way other cards merge it in.

      1. hmmm then maybe the rate conversion of AMEX is slightly higher (about 0.5%) than using mastercard but without top up fee its better than M1 prepaid (only AMEX is less accepted )

  2. Hi aaron,

    2 questions,

    1. what is the best mile card for overseas? I have only seen 2 miles/ dollar? Is there anything better?
    2. I got a couple of stays in Hilton Bangkok coming up soon. I did my reservation through the official website. Will I get 3x DBS points if I use the DBS altitude card to pay upon checkout? What cards do you normally use upon checkout of an overseas hotel.

    Love your website.


    1. hi KT! thanks for reading

      1. 2.4 miles per $1 with uob prvi miles, otherwise if you can spend minimum $1,000 overseas (not including online transactions done in foreign currency, this means transactions physically swiped overseas) use UOB visa signature for 4 miles per $1 (capped at $2,000 per month)

      2. it’s not 3x DBS points actually, 1x DBS points= 0.4 miles per $1, so what you’re asking me is whether you will get the 7.5 X points (3 miles per $1) for hotel spend. if you stay was prepaid and you paid on the hilton site,you will get the bonus. otherwise, if you just used your card to secure the reservation and swipe when you check out to pay the bill, you will earn the usual 5X DBS points per $1 for overseas spend (2 miles)

      if i’m trying to hit the $1k mark i’ll use uob visa signature for hotels, else i’ll use UOB prvi

      1. thank aaron.

        Well, based on my room reservation invoice, it says that a non-refundable deposit has been charged to my card. So, I was wondering if it has already been charged.

        Anyway, I think 0.5 DBS points = 1 x Miles/dollar right?


      2. 2.4 miles /$ with UOB Prvi Miles & 3.25% Visa/MC


        2 miles/$ with DBS Altitude & 2.5% Visa

        Does the extra 0.4 mile cover more than the 0.75% additional charge?

        1. I’ve calculated for an overseas spend, supposed that it is S$100 equivalent after factoring the currency conversion spread of 0.8%:

          With the bank/Visa charges,

          DBS Altitude will be S$102.50 earning 205 miles
          UOB Priv Miles will be $103.25 earning 247.8 miles

          Assuming best case scenario where there is no rounding down of points or UNI$, using UOB Priv Miles will cost $0.75 extra with additional 42.5 miles.

          That’s like paying 1.8 cents for the additional miles, which is about the same rate as buying miles from annual fees.

          1. If “buying miles” is more important than lowest cost of miles, I’d suggest the SCB Visa Infinite than the PRIVI Miles (assume you can meet $2,000 min spend). It gives 3 miles per dollar, 3.5% foreign transaction fee but subject to $2,000 min spend in statement cycle.

            Using the same method of calculation by JS:

            SCB Visa Inifinite will be 103.50 earning 310.5 miles
            Cost over PRIVI miles = $0.25 and earn 62.7 miles extra (0.3 cents per mile)
            Cost over DBS Altitude = $1.00 and earn 105.5 miles extra (0.9 cents per mile)

  3. Hi Aaron

    I am currently using most of my transactions on the UOB Prvi MC. Seems like the charges are very high especially when using overseas. Can I safely say that I should change to using another card to maximize my miles?? Which will you recommend? Thanks.

    1. hmmm. well if you’re ok with 2 miles per $1 instead of 2.4 miles then DBS altitude would charge 2.5% on the visa version, 0.75% less than UOB PRVI MC. UOB has to charge higher fees to cover their 2.4 miles, so it’s a trade off really. but if you use uob visa signature, you’d earn 4 miles per $1 (min $1k max $2k) while paying 2.5%. maybe that’s the answer?

  4. Hi aaron – time to update this article; DBS has recently hiked its Visa/MC fees to 2.8% too 🙁 Don’t get me started on their outrageous 3.25% fee for DCC on *DEBIT* cards…

      1. My bad – yes it’s 2.8% for DCC and not 3.25%, that’s for retail. That’s for debit cards though! The DCC/overseas SGD transaction markup for credit cards is still at 1% (for now)

        Agree with your point in principle that I’d much rather hand over the margin to my bank and potentially get some rewards out of it – but considering how DCC is more often than not unilaterally imposed on the uninformed masses, cant help but think that the consumer stands to lose a lot here. 4% DCC markup + 2.8% charge by DBS – my god!

        Offtopic a little, but what are my options for a fee-free overseas SGD transaction at this point, besides AMEX? Citi used to be the last holdout, but even they started charging the 0.8/1% fee sometime in May this year (i think?)

  5. hi Aaron,

    what are your thoughts on using cash vs credit cards overseas? if we are savvy enough with credit card usage, would it more than offset the charges?

    Thanks 🙂

    1. that’s a good question, and the unhelpful answer is it depends. I’d say yes, it does if you use the UOB Visa Signature (4 mpd) or SCB VI (3 mpd, with $2k spend per month). If you use the UOB PRVI (2.4 mpd) the value becomes slightly more marginal, but can still work.

      ultimately, whether miles earned via overseas cc usage will be more than enough to offset the forex charges depends on what you redeem them for. if you redeem for scoot/tiger vouchers or Y redemptions, probably not. if you redeem for F/J, probably yes.

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