Tag Archives: dbs

You can now use your DBS/POSB cards to pay for ERP charges

I wrote previously about being able to pay ERP charges with your credit card. This service, called EZ-Pay, was previously only available to those who had Citibank cards. There were no fees involved, and you could earn rewards points for payments made.

It was announced this week that EZ-Pay would be extended to DBS/POSB cards as well.

To recap- with EZ-Pay, your ERP charges are billed directly to your card if you have insufficient value in your cashcard or go through the gantry without a card. I don’t have a car, but if I did I’d certainly see this as a way of earning a few bonus miles, especially given the lack of top up fees. You’re not going to earn a lot of miles through ERP, obviously, as I would imagine that the amount you pay on parking would far exceed the amount spent on ERP.

And here’s where phase 2 of the project becomes interesting, because eventually the plan is that EZ-Pay will extend to parking charges as well. That’s right, you can enter and exit a carpark without needing a cashcard.

For completeness’ sake I’m going to reiterate two other options that exist for you to pay ERP charges with your credit cards-

MotorPay

DBS offers  MotorPay in conjunction with the LTA and charges $1.07 a month per vehicle. Every time you pass through a gantry, the charge is billed to your DBS credit card.

VCashCard

VCashCard  allows you to use Mastercard and Visa cards from DBS/POSB/OCBC/UOB and SCB to top up a virtual cash card. When your card balance drops below $10, it is automatically topped up. You can only top up in intervals of $50, and a $0.50 transaction fee is charged per top ups except for UOB cards.

VCashCard says payment at carparks is “coming soon”

The advantage of EZ-Pay is the lack of a transaction fee. Every little bit, right?

DBS Multicurrency debit card- will you trade points for forex fees?

I’m the sort who feels physical pain every time I see anyone take out a debit card to pay for something. Unless you’re an undischarged bankrupt, someone without an active income or a student (and even then maybe not), there’s no reason for you to not use a credit card for your payments.

Image result for dbs multicurrency debit card

So why am I writing about a debit card?

It’s tough for Singapore credit card holders who want to use their cards overseas. We don’t have credit cards that come with no foreign transaction fees, so every time we spend overseas we get hit by multiple fees (I’ve written about the various fees here). If you’re gullible enough to fall for (or get scammed into) the “convenience” of DCC and pay in SGD, you could pay upwards of a 7% spread.

DBS has an interesting new product available called the multi currency account (MCA). The debit card that accompanies this account allows you to incur no foreign exchange fees when you pay in Australia Dollar, Canadian Dollar, Euro, Hong Kong Dollar, Japanese Yen, New Zealand Dollar, Norwegian Kroner, Sterling Pound, Swedish Kroner, Thai Baht and US Dollar.

DBS Multi-Currency Autosave (MCA)

In theory it’s very simple. Suppose I want to go to the USA because I have a pressing need for my cellphone to be searched and my cavities to be frisked.

I need to buy USD for my expenses there. Normally, I’d pop down to the moneychangers at the Arcade. But what DBS proposes is that I do an SGD transfer into my DBS MCA to buy USD beforehand. Subsequently, when I need to pay for something in the USA, I can

  • Use my DBS MCA debit card and incur no further fees (paying in USD)
  • Go to an ATM to withdraw physical USD if the merchant doesn’t accept cards (and pay an ATM withdrawal fee of S$5)

It’s conceptually similar to you going to the Arcade, buying USD, putting it in a bank and withdrawing it when you need it. The theory is that this keeps you from having to physically change money and lug around a huge amount of cash on your travels. And I buy that, that’s a genuine point of concern for me whenever I travel.

The question here, then, is two fold

  1. How does the exchange rate offered by DBS compare to the rates offered by brick and mortar moneychangers?
  2. Is it worth forgoing the bonus points offered by credit cards by paying with the DBS Multicurrency debit card (no forex fees but no points)?

Let’s break it down-

Exchange Rate Comparison

Image result for arcade moneychanger

Your alternative to using the MCA is to head down to the moneychangers to swap physical cash. So how much of a premium are you paying to DBS for this service?

DBS forex rates can be found here. Now, I’m assuming that the rates published on that page are the same rates you’ll get when transferring using an MCA account. If so, you have the following (1 March 2017)

  • 1 USD= $1.4179
  • 1 GBP= S$1.7614
  • 1 Euro= S$1.5021
  • 1 AUD= S$1.0924
  • 100 JPY= S$1.2526

For comparison, I found the following rates at the Arcade

  • 1 USD= S$1.406
  • 1 GBP= S$1.75
  • 1 Euro= S$1.49
  • 1 AUD= S$1.085
  • 100 JPY= S$1.2470

This implies a premium of approx

  • USD- 0.8%
  • GBP- 0.7%
  • Euro- 0.8%
  • AUD- 0.7%
  • JPY- 0.4%

It’s really much better than I expected, assuming the rates published on the DBS site are the same ones you’ll get for your MCA (I don’t have an MCA account, but if anyone wants to confirm feel free to leave a comment)

The other value I see here is that suppose you forget to change money before you head to the airport. You can then open up the DBS App and get the currency you need without being gouged by the airport moneychangers.

No fees and no points

The other downside of using the MCA debit card is that you won’t earn any points on your overseas spend.

Let’s recap what you could potentially get if you used your credit cards overseas

  • UOB Visa Signature- 4 mpd, subject to a min spend of S$1,000 and max spend of S$2,000 per statement period
  • Standard Chartered Visa Infinite– 3 mpd, subject to min spend of S$2,000  per statement period
  • UOB PRVI Miles- 2.4 mpd
  • DBS Altitude, Citibank Premiermiles- 2 mpd
  • ANZ Travel Visa Signature– 1.4 mpd unless Australia/NZ then 2.8 mpd

Assuming you’d be generating 4 mpd, and taking a conservative valuation of 2 cents per mile, you’re giving up 8 cents of value when using a debit card. Of course, you’ll need to minus away the spread and forex fees incurred when using a credit card, so perhaps net net you’ll be giving up 4-5 cents of value in total.

The equation changes somewhat if you’re using a 2/2.4 mpd card, obviously. You get 4-4.8 cents worth of miles, but then after fees you maybe come out 1-2 cents ahead.

Other points to note

No partial payments are allowed. If you do not have sufficient foreign currency balance in your MCA, the entire transaction will be billed in SGD. Suppose my MCA has $1,000 SGD and $100 USD, and I try to buy something that costs $150 USD. The entire $150 USD amount will be converted into SGD and deducted from my $1,000 SGD balance in that case

There is a minimum average daily balance of S$3,000 required in the account, otherwise a S$7.50 fall below fee applies.

I think this account would be great for you if you’re determined not to incur additional forex fees overseas, even for earning miles.

DBS Altitude Visa double miles promotion

From 1 March to 31 July 2017, DBS Altitude is running a promotion on their Visa Signature card for members who register via this link. Cardmembers can earn up to 6 mpd, depending on the category they spend in.

Here’s how it works- recall that the base earning rates for the DBS Altitude Visa are 1.2/2/3 mpd for local/overseas/online hotel and flight bookings respectively.

If you spend a minimum of S$2,500 per calendar month, you’ll enjoy 2.4/4/6 mpd on the $2,501-$5,000th dollar of spend. Any spend fro mthe $5,001th dollar on earns the regular 1.2/2/3 mpd.

In reality your actual mpd will be something less than the 2.4/4/6 promised because your $1-$2,500 will be earning the regular 1.2/2/3 mpd rates.

6 mpd sounds like a a fantastic earning rate for online hotel and flight spending- it’s above the HSBC 4 mpd rate (which may very well disappear come 31 March). But when you do the math, you come out only marginally higher. Suppose you were buying a $5K flight ticket- your effective rate is 4.5mpd because of the first $2.5K of spend earning 3 mpd. If you don’t have a HSBC Advance card then of course it’s a fantastic deal though. Full T&C here.

A reminder that if you do not yet own a DBS Altitude Visa card you can get a 10,000 mile sign up bonus (or 15,000 miles if you’re new to DBS credit cards altogether) when you charge a minimum of $1,000 a month for the first 2 months after getting your card. This is valid for sign ups till 31 March.