With Singapore returning to pre-COVID travel conditions under the Vaccinated Travel Framework, there’s every reason to take that long-delayed vacation. So in that spirit, it’s time for a refresher on the best cards for overseas spending.
While it’s “free” to use your credit card in Singapore (unless the merchant imposes a surcharge), swiping it overseas entails an explicit cost thanks to foreign currency (FCY) transaction fees imposed by banks. And yet, many credit cards offer an upsized rate on FCY transactions. For example:
- UOB PRVI Miles Card offers 1.4 mpd for all SGD spending, but 2.4 mpd for FCY spending
- DBS Altitude Card offers 1.2 mpd for all SGD spending, but 2.0 mpd for FCY spending
So the question therefore is whether it’s worth using your card overseas, and the answer depends on:
- How much you value a mile
- How much you’re paying for miles when you use your card overseas
(1) is a subjective measure, which I’ve addressed in this article (my personal value is about 1.8 cents). (2) is much more objective, and the focus of the discussion below.
How much do banks charge for foreign currency transactions?
When you make a transaction in a currency other than Singapore dollars, what typically happens is the amount is first converted to USD, and then into SGD.
|💳 Example: DBS|
|“Visa/Mastercard transactions in US Dollar shall be converted to Singapore Dollar on the date of conversion. Transactions in other foreign currencies will be converted to US Dollar before being converted to Singapore Dollar.”|
There’s some spread involved here, but the biggest expense is the FCY transaction fee charged by the bank. Here’s a summary:
|💳 FCY Fees by Issuer and Card Network|
|Issuer||↓ Visa & Mastercard||AMEX|
FCY fees range from 2.8% to 3.5%, and unfortunately, have been edging ever upwards over the years.
- On 1 Apr 18, Maybank increased its FCY charge on Visa Diamante, Visa Infinite and World Mastercard from 2.5% to 2.75%
- On 4 Oct 18, Citibank increased its FCY charge from 2.8% to 3%
- On 1 Nov 18, HSBC increased its FCY charge from 2.5% to 2.8%
- On 1 Jan 19, CIMB removed the admin fee waiver for FCY transactions on the Visa Signature and Platinum Mastercard, effectively increasing the fee from 1% to 3%
- On 2 Jan 19, DBS increased its FCY charge from 2.8% to 3%
- On 15 Jan 19, BOC increased its FCY charge on Mastercard transactions from 2.5% to 3% (Visa fees increased from 2.5% to 3% on 1 Dec 18)
- On 15 Mar 19, OCBC increased its FCY charge from 2.8% to 3%
- On 4 Sep 19, UOB increased its FCY charge from 2.8% to 3.1%
- On 1 Nov 19, DBS increased its FCY charge from 3% to 3.25%
- On 3 Dec 19, OCBC increased its FCY charge from 3% to 3.25%
- On 15 Dec 19, Citibank increased its FCY charge from 3% to 3.25%
- On 1 Mar 20, AMEX increased its FCY charge from 2.5% to 2.95%
- On 9 Mar 20, UOB increased its FCY charge from 3.1% to 3.25%
- On 1 Nov 21, Maybank increased its FCY charge from 2.75% to 3.25%
Don’t forget that the FCY fees are charged on top of the implicit spread in the Mastercard or Visa exchange rate (relatively modest in my experience). For example:
- A US$100 transaction charged to a Mastercard would cost S$139.39, assuming no FCY fees (spot rate: S$139.09)
- Once a 3.25% FCY fee is factored in, that amount becomes S$143.92
|❓ How much will my overseas transaction cost?|
|If you’re curious as to how much a given foreign currency transaction will cost, you can use the Mastercard or Visa currency converter calculators. All you need to plug-in is the bank’s FCY fee, from the table above.|
What’s the cost per mile?
No one likes to pay more than they have to, but do the miles earned for overseas transactions justify the costs? Generally speaking: yes, although some cards represent better options than others.
General Overseas Spending
The following cards offer bonuses on all foreign currency transactions (except, of course, those in the general exclusions list like charitable donations and cryptocurrency).
|Card||FCY Earn Rate||Fee||CPM|
|UOB Visa Signature||4.01||3.25%||0.81|
|UOB PRVI Miles||2.4||3.25%||1.35|
|OCBC Premier VI||2.24||3.25%||1.45|
|AMEX KrisFlyer Ascend||2.05||2.95%||1.48|
|AMEX KrisFlyer Credit Card||2.05||2.95%||1.48|
|OCBC 90N MC||2.1||3.25%||1.55|
|UOB VI Metal||2.0||3.25%||1.63|
|SCB X Card||2.0||3.5%||1.75|
|1. Min. spend S$1,000 per statement month, cap at S$2,000 per statement month|
2. Cap at S$2,222 per membership year, must have SCB Visa Infinite or SCB X Card otherwise 2.9 mpd
3. Min. spend S$2,000 per statement month, otherwise 1 mpd
4. Min. spend S$50,000 in previous membership year, otherwise 2 mpd
5. Only in June and December, otherwise 1.1 (Blue) or 1.2 (Ascend)
Specific Overseas Spending
If you’re clocking FCY spend on particular categories, the cards below can also be options.
|OCBC Titanium Rewards||4.03||3.25%||0.81|
|UOB Pref. Plat. Visa||4.04||3.25%||0.81|
|UOB Lady’s Card||4.05||3.25%||0.81|
|1. Department store, apparel, or online transactions (excluding travel). First S$1K per statement month. |
2. Online transactions. First S$2K per calendar month.
3. Department stores, apparel, electronics. Full list here. First S$12K per membership year.
4. Apparel, electronics, dining, food delivery, entertainment. Also applies to overseas mobile payments. Full list here. First S$1.1K per calendar month.
5. Depends on your selected bonus category. Full list here. First S$1K (Lady’s) or S$3K (Lady’s Solitaire) per calendar month.
6. Airlines, hotels, department stores, apparel, supermarkets, transport. Must be online or via contactless payments. Full list here. First S$1K per calendar month.
How do banks define overseas transactions?
For most banks, an “overseas transaction” is simply any transaction processed in a currency other than Singapore dollars.
But Bank of China and UOB add another caveat: the transaction must be processed outside of Singapore. For example, if you were to book through the Hotels.com Singapore website and pay in Euros with your UOB PRVI Miles Card, you’d earn 1.4 mpd instead of 2.4 mpd because the payment is processed in Singapore.
How do you know where payments are processed? You don’t. That’s the worst thing about such a rule- it puts the onus on the customer to find out information that’s not exactly readily available.
The Amaze Alternative
With Amaze, you’ll pay zero FCY fees (though the FX rates entail a small spread) while earning up to 4 mpd on your credit card plus up to 1% cashback.
|💳 tl;dr: Amaze card|
|Sign Up Here|
The 4 mpd is limited only by the credit card linked to the Amaze, but by pairing it with the Citi Rewards Mastercard and DBS Woman’s World Card (until 31 May 2022), you’ll have a monthly cap of S$3,000.
While Amaze is probably living on borrowed time (I’d be pleasantly surprised if we made it through 2022 without further nerfs), the miles game is all about making hay, and make hay we shall.
Beware of DCC!
We can’t talk about using your card overseas without the customary warning about the scam known as Dynamic Currency Conversion (DCC).
For the uninitiated, DCC is a “service” provided by merchants which converts the transaction into your card’s local currency, at a fee that’s much more than what your bank would charge. The merchant pockets part of the profit, so some unscrupulous places will instruct staff to select it by default, without the consent of the customer.
Be alert, and always, always emphasise that you want to be billed in whatever the local currency is. If you want to avoid the scourge of DCC altogether, use an American Express card, since AMEX does not support DCC.
While FCY fees are annoying, it’s still possible to get your money’s worth by using cards that earn 4 mpd on overseas transactions.
Amaze is the real game-changer, however- for as long as it lasts. So long as you can earn 4 mpd, 1% cashback with minimal FX spreads, there’s little reason for you to bring any other card on your travels.