From 4 September 2019, UOB will be hiking its foreign currency (FCY) transaction fee on Visa and Mastercard from 2.8% to 3.1%.
This does not affect the UOB PRVI Miles Visa/Mastercard, KrisFlyer UOB, and UOB Reserve cards, which continue to impose a 3.25% FCY fee.
It will, however, affect cards like:
- UOB Visa Signature, which earns 10X points on FCY spending (min S$1K, max S$2K per statement period)
- UOB Preferred Platinum Visa, which earns 10X points on Paywave transactions both in SGD and FCY (max S$1K per month)*
- UOB Lady’s Card/ UOB Lady’s Solitaire, which earns 10X on your choice of 1/2 categories both in SGD and FCY (max S$1K/S$3K per month)
*technically $1,110 because of how UOB calculates its bonus points
How does UOB’s FCY fee compare to other banks?
With the latest changes, here’s how FCY fees across banks stack up
| Bank | Visa/MC | AMEX |
|---|---|---|
| DBS | 3.25% | 3.0% |
| UOB | 3.25% | 3.25% |
| OCBC | 3.25% | N/A |
| Citibank | 3.25% | 3.3% |
| HSBC | 2.8% | N/A |
| SCB | 3.5% | N/A |
| Maybank | 2.75% | N/A |
| CIMB | 3.0% | N/A |
| BOC | 3.0% | N/A |
| AMEX | N/A | 2.95% |
UOB was one of the few banks with a sub-3% fee, and in that respect it’s simply following the market trend:
- 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, thereby increasing the fee from 1% to 3%
- On 2 Jan 19, DBSÂ 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%
This leaves HSBC, Maybank, and (surprisingly) American Express as the only banks to maintain sub-3% FCY fees. Both HSBC and Maybank have already increased their FCY fees in the past 18 months, so hopefully the market will stabilize now.
Is it worth using my credit card overseas?
As always, the answer to this question hinges on how much you value a mile. Here’s a (non-exhaustive) table of Singapore credit cards, the miles they earn on FCY spending, and their FCY fees. By taking the FCY fee divided by the miles earned, you can derive the cost per mile.
| Card | FCY Rate | FCY Fee | Cents Per Mile |
|---|---|---|---|
| OCBC Titanium Rewards (eligible 10X categories) | 4.0 | 3.25% | 0.81 |
| Citi Rewards (eligible 10X categories) | 4.0 | 3.25% | 0.81 |
| UOB Visa Signature (min $1K, max $2K FCY per statement period) | 4.0 | 3.25% | 0.81 |
| SCB Visa Infinite (spend >$2K per statement period) | 3.0 | 3.5% | 1.17 |
| SCB Rewards+ (capped at $2.2K p.a) | 2.9 | 3.5% | 1.21 |
| HSBC Visa Infinite (spend >$50K in previous year) | 2.25 | 2.8% | 1.24 |
| UOB PRVI Miles (all versions) | 2.4 | 3.25% | 1.35 |
| DBS Treasures Black Elite | 2.4 | 3.25% | 1.35 |
| Maybank Visa Infinite/Horizon Visa Signature | 2.0 | 2.75% | 1.38 |
| HSBC Visa Infinite (reg rate) | 2.0 | 2.8% | 1.4 |
| OCBC VOYAGE | 2.2 | 3.25% | 1.48 |
| AMEX KrisFlyer Credit Card and AMEX KrisFlyer Ascend (June/Dec) | 2.0 | 2.95% | 1.48 |
| OCBC 90N | 2.1 | 3.25% | 1.55 |
| Citi PremierMiles Visa, Citi Prestige, Citi ULTIMA | 2.0 | 3.25% | 1.63 |
| DBS Altitude AMEX/Visa | 2.0 | 3.25% | 1.63 |
| SCB X Card | 2.0 | 3.5% | 1.75 |
| AMEX KrisFlyer Ascend | 1.2 | 2.95% | 2.46 |
| AMEX KrisFlyer Credit Card | 1.1 | 2.95% | 2.68 |
| SCB Visa Infinite (spend <$2K per statement period) | 1.0 | 3.5% | 3.5 |
My general take is that 1.8 cents and below is a reasonable price to pay, given the other opportunities to buy miles in the market. Different people will come to different conclusions, however, so it’s important to do the math for yourself.
If you’re using your Visa or Mastercard credit card overseas, be sure to avoid the DCC scam and activate your magnetic strip only for the period necessary.
Conclusion
UOB’s fee hike isn’t doesn’t come as that much of a surprise, given what we’ve seen from other banks. That said, it can still make sense to use your cards overseas, especially when there are 10X opportunities available.
(HT: @andrewlee)
