Well, this is contagious. After HSBC and Citibank announced their intentions to hike foreign currency transaction fees, BOC credit card holders received an SMS today directing them to the following circular.
It’s pretty self-explanatory, but the main highlight for those of us in the miles game is that from 15 January 2019, the BOC Elite Miles World Mastercard will charge a total of 3% foreign transaction fees, up from the current 2.5%.
How does this change the cost of miles?
You’ll remember that the BOC Elite Miles World Mastercard is offering 5 mpd on foreign currency spending until 31 December 2018, and 3 mpd after that. This means that your cost per mile will be:
- 0.5 cents (2.5/5) until 31 December 2018
- 0.83 cents (2.5/3 ) from 1 January-14 January 2019
- 1 cent (3/3) from 15 January 2019
With this change, here’s how the different banks will stack up in terms of foreign currency charges (inclusive of the AMEX/Visa/Mastercard imposed fees).
[table id=3 /]
From 1 January, it may be more advantageous to use your UOB Visa Signature card overseas for 4 mpd at a 2.8% fee (0.7 cpm), assuming you’re able to hit the threshold spending level of S$1,000 foreign currency spending in a statement period.
Maybe it’s just monkey see, monkey do, but I’m curious if there’s something else that has triggered the banks to increase their foreign currency transaction fees. As mentioned in my HSBC post, fees have increased, but rewards have not.
That said, the BOC Elite Miles World Mastercard is offering an unbelievable number of miles on FCY spending until the end of the year, at a very reasonable fee. The catch? Even if you apply right now, there’s no guarantee you’ll get the card by year end. They’re just that slow.
Has anyone noticed that with all these changes, it’s actually American Express offering the lowest foreign currency transaction fees in the market at 2.5%? Who’da thunk it? Let’s see how long that lasts.
Finally, a side note: it’s interesting that the BOC Visa Infinite card will cease to offer a foreign currency transaction fee waiver from 1 December 2018. This, together together with CIMB’s decision to scrap the foreign currency transaction fee waiver from 1 January 2019 on the Visa Signature and Platinum Mastercard, means that we will have no cards in Singapore that offer any fee waiver on FCY spend. When banks first started doing this, I was hopeful that the trend would catch on, but it looks like that was a pipe dream.