What is Amaze’s real foreign currency transaction fee?

Amaze’s claim to fame is that it offers the opportunity to earn credit card rewards with no foreign currency transaction fees. Simply put, it wants to make swiping your card overseas as stress-free as swiping it in Singapore.

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💳 tl;dr: Amaze Card

Link up to five Mastercard credit/debit cards Overseas transactions are converted into SGD (no FCY transaction fees, but subject to FX spread) and charged to the underlying credit/debit card Transaction MCC remains the same, offline transactions charged to Amaze become online transactions for the underlying credit/debit card Earn 1 InstaPoint per S$1 spent on FCY transactions of at least S$10 (except exclusion categories), capped at 500 InstaPoints per transaction Redeem InstaPoints for cashback in blocks of 2,000 InstaPoints= S$20

That’s a pithy summary, but it’s not entirely accurate. Instarem has to earn money, after all, and the way they do is through the spread on foreign currency transactions. 

Historically, Amaze used rates that were equal to or very close to Mastercard’s rates, but at some point in 2022, those started diverging noticeably. What this means is that even though it doesn’t call it as such, Amaze really does have an FCY transaction fee of its own.

How much exactly is that, and does it negate the benefits of using Amaze over credit cards?

What rates does Amaze use?

It’s important to remember that Amaze never actually promises to give spot rates, or even Mastercard rates for that matter. In the FAQs, Amaze promises to give “competitive FX rates”.

Amaze offers competitive FX rates, unlike banks which typically add a substantial markup and FX admin fee. Thus, you get the best possible value for your FX transactions and overseas purchases with amaze.

Until recently, an additional paragraph was appended to that particular statement:

Exchange rates and applicable FX fees are available in-app after you initiate a transaction. Amaze offers competitive exchange rates which are very close to the published rates you can see on Google or other financial sites.

That paragraph has been removed, however, suggesting where this is heading. 

But before we look at the actual rates Amaze charges, here’s a PSA:

!!!Stop comparing Amaze rates to Google/XE.com rates (aka mid-market rates)!!!

Seriously, just stop. I get far too many messages complaining that Amaze is a rip-off because “it’s more expensive than the Google rate”. That’s fundamentally the wrong basis of comparison.

The only time when mid-market rates become relevant is if your alternative were Revolut or YouTrip, since the express purpose of those cards is to reduce the cost of an FCY transaction as much as possible.

With Amaze, the idea is to earn rewards while still paying less than a traditional credit card, and since no credit card offers mid-market rates, our basis of comparison should be the Visa/Mastercard rates.

Do I want mid-market rates and credit card rewards? Sure, in the same way I want birds to poop on the heads of people who watch videos in public without headphones. Sadly, what I want and what I get are two very different things. 

Amaze’s current FCY fee

Here’s a brief reminder of how foreign currency transactions work. Suppose I spend US$100 overseas:

• If I use a traditional credit card, US$100 will be converted into SGD at the prescribed Visa/Mastercard rate, with a further FCY transaction fee (usually 3.25%) levied by my bank
• If I use Amaze, US$100 will be converted into SGD at Amaze’s rates, and charged to the linked card in SGD.

Therefore, when comparing Amaze to traditional credit cards, we need to see how much more Amaze charges compared to Mastercard, because that’s the true “fee”.

I went to look at the rates I’ve been charged in Amaze, versus what I would have paid if using a Mastercard credit card (via Mastercard’s online currency converter). I was then able to calculate the implicit FCY fee:

The fee varies by date and currency, but the median works out to be around 1.5% (there is some evidence that the fees may be inching closer to 1.8% in March, though nothing conclusive at this point). 

What about InstaPoints?

There’s one more piece to the puzzle that people often forget: InstaPoints.

Foreign currency transactions on the Amaze earn 1 InstaPoint per S$1, subject to the following conditions:

• Transactions must be at least S$10
• A maximum of 500 InstaPoints can be earned per transaction
• No InstaPoints are earned on exclusion categories such as education, hospitals and charitable donations

InstaPoints can be redeemed for cash rebates at a rate of 2,000 points= S$20, so this is equivalent to a rebate of 1%. That said, you get no rebate if you spend <S$10, and your effective rebate will be <1% for any transaction above S$500 (because of the cap).

Therefore, assuming the implicit FCY fee charged by Amaze through its spreads is 1.5%, the nett fee here is at least 0.5%. That still compares extremely favourably to the banks, where you won’t pay anything less than 3% with Mastercard (really 3.25%, since BOC and CIMB don’t have any decent miles cards).

So the tl;dr is that Amaze, paired with the right card, is still worth using, though it’s obviously not as good a deal as it was before. 

What card should you use with Amaze?

As a reminder, only Mastercard credit or debit cards can be paired with Amaze.

You can therefore consider the following pairings to maximise the miles you earn (DBS excluded Amaze in June 2022).

💳 Suggested Amaze Pairings
Card	Earn Rate	Cap
UOB Lady’s Card	6 mpd1	S$1K per c. month
UOB Lady’s Solitaire	6 mpd2	S$3K per c. month
Citi Rewards Card	4 mpd3	S$1K per s. month
OCBC Titanium Rewards	4 mpd4	S$13.3K per m. year
KrisFlyer UOB Credit Card	3 mpd5	None
1. Pick 1: Beauty & wellness, dining, entertainment, family, fashion, transport, travel (T&Cs) 2. Pick 2: Beauty & wellness, dining, entertainment, family, fashion, transport, travel (T&Cs) 3. All transactions except travel (airlines, hotels, rental cars, tour agency, cruises etc) (T&Cs) 4. Clothes, bags, shoes and shopping (T&Cs) 5. Dining, shopping, travel, transport. Must spend at least S$800 on SIA Group transactions in a membership year (T&Cs)

The recent enhancement of the UOB Lady’s Cards means they’re hands down the best option to pair, earning 6 mpd on up to S$3,000 of monthly spend for up to two selected bonus categories. 

Assuming you don’t qualify for those, then the Citi Rewards Card remains a solid option with 4 mpd on the first S$1,000 per statement month, except on travel-related transactions. 

Conclusion

While Amaze does not have an explicit FCY transaction fee, it does have an implicit spread of ~1.5% over Mastercard rates (offset by a 1% cash rebate in the form of InstaPoints).

The spread is naturally causing some unhappiness, but let me put it this way:

1. Did Amaze use to give rates that were closer to mid-market? Yes.
2. Is Amaze still worth using now? Also yes. 

So long as Amaze offers the same rewards you’d get from using your credit card directly, plus lower FCY fees than the bank, then using it over a credit card is a no-brainer. The fact that it used to be an even better deal is lamentable, but entirely irrelevant to the discussion at hand. 

Put it this way: let’s suppose that instead of nuking JAL awards from Singapore to Tokyo, Alaska increased them modestly from 25,000 miles to 30,000 miles (psst..there’s a way!). That would still be a good deal, in and of itself.

If you said “well, now I’m not going to do it because 30,000 miles is worse than 25,000,” you’d be correct…and also cutting the nose to spite the face. 

In the same way, Amaze isn’t the screaming good deal that it was a couple of years ago, but it still remains the best option for earning miles overseas. So long as banks keep the rewards flowing and the implicit FCY fee, net of InstaPoints, remains south of 3.25%, I see no reason to abandon ship.