Home Credit Cards Overseas Transaction Fees - The Lowdown

Overseas Transaction Fees - The Lowdown

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Credit Cards

Contrary to common perception, credit cards in Singapore are not created equal when it comes to spending in a foreign currency. While it is well-known that credit cards sometimes offer a "poor" exchange rate when you are paying an overseas hotel bill, it is less commonly known what charges eventually go into a credit card bill.

** Refreshed on 20 Nov 2011 **

Components of Fees

Besides the customary fees charges by credit cards companies (such as VISA and MasterCard), banks also impose a separate "administrative fee" which can vary greatly. The consumer however only sees a rolled-up foreign exchange rate, which hides the breakdown between the foreign exchange spread, bank fees and credit card company fees

Bank Fees

After a little digging into the fine print of card users' agreements of the major banks in Singapore, here what we found as of 20 Nov 2011:

Credit Card Company Fees

Incidentally, SCB is most transparent in revealing what VISA and Mastercard charges users directly.

According to SCB, "all VISA International cards overseas transactions will be subject to a charge of 1% ...imposed by VISA"

All MasterCard International cards may be subject to the following charges...imposed by MasterCard International:
- Transactions in currencies other than Singapore Dollars incurred outside of Singapore will be subject to a charge of 1%.
- Transactions in currencies other than Singapore Dollars incurred in Singapore will be subject to a charge of 0.2%
- Transactions in Singapore Dollars incurred outside of Singapore will be subject to a charge of 0.8%"

Verdict

There appears little to choose between VISA and Mastercard, but American Express's charge is 25% more than that those of the other two card companies.

When it comes to choosing banks however, you can end up paying twice the fees when using Standard Chartered Bank's cards compared to using Maybank's.

** Special Note on Paypal **

This may be relevant if you use a Singapore Paypal account to pay for online purchases. If you are settling an invoice in an overseas currency (eg US dollar) using Paypal, you can choose whether to pay in USD or let Paypal convert the sum to Singapore dollars for you.

It is usually better to pay using USD (original currency). Paypal doesn't publicize its markup, but from my experience, Paypal applies a markup of about 2.7%, which is slightly more than what most banks/credit card companies charge (typically 2.5%). Some credit cards also give more reward points when you spend in an overseas currency. Therefore, it doesn't make sense to let Paypal convert a foreign currency for you.

 

Last Updated ( Wednesday, 30 November 2011 05:28 )  

Comments  

 
0 #20 Bank 2013-11-12 15:47
For those who are interested in Dynamic Currency Conversion (DCC) - option for customers to pay for transactions in Singapore Dollars when
they are in a foreign country, or on a foreign website.
DBS Update: Effective 1 November 2013, all Credit/Debit card transactions performed overseas or on overseas websites, in Singapore dollars, will be subject to an administrative fee of up to 0.8% on the converted Singapore dollar amount. (http://www.dbs.com.sg/personal/cards/usefulinfo/recent-updates/default.page)
 
 
+2 #19 K Tong 2013-06-30 06:53
From what I can see, all the Visa/MasterCard charges are Bank (1.5%) and Visa/Master card (1%) - giving a total of 2.5%. The only difference is any promotional rebate for overseas spending. eg CIMB Visa Infinite provides 2% rebate for spends about S$2k.
 
 
0 #18 Timothy 2013-01-23 04:59
It looks like OCBC is joining DBS and raising its foreign transaction fee at least on its debit/ATM cards to 2.8%.
 
 
0 #17 Timothy 2012-12-30 06:20
About Diners Club Singapore: I've been disappointed with their actual foreign exchange rates with some recent trial purchases. Their published 1% rate does not look accurate, so perhaps they've raised rates without updating their disclosure documents.

Note that CIMB only offers their credit cards in Singapore to Singapore citizens and PRs. Other banks (e.g. Maybank) seem to be adopting similar policies.

DBS seems to be raising their foreign exchange rate by 0.3 percentage points with the start of 2013. I'm not sure if that's only for their debit cards or also for their credit cards.

I would like to see Singapore's card issuers compete much more on the basis of lower foreign exchange expenses, as they are in the U.S. That starts with a more informed public, and the MAS ought to be doing more to help.
 
 
+2 #16 Timothy 2012-08-27 10:12
Diners Club Singapore only charges their network fee (1%) and nothing above that for foreign currency transactions. They also probably don't "double convert," meaning it doesn't appear that they convert into U.S. dollars first then into Singapore dollars. Consequently it's a very good card to use overseas. The challenge with Diners Club in the past has been acceptance, but that's improving. Diners Club is now accepted anywhere UnionPay is accepted in China, anywhere JCB is accepted in Japan, and in countries where Discover is accepted. Discover continues to expand internationally .

I think the CIMB World and Platinum MasterCards are probably also relatively good. They both offer a 1% rebate for overseas spending, so the net CIMB markup is only about 0.5%. Whether CIMB also charges the Visa/MasterCard 1% network rate is unclear.
 
 
+2 #15 foxie 2012-05-10 09:18
What about american express credit card? I called to check and they said it's 2.5% base on actual conversion rates at that point in time in US.
 
 
0 #14 Chris 2012-01-07 08:53
Maybank's fee is 1.5% now - based on this page:
http://info.maybank2u.com.sg/personal/deposits-banking/bank-charges/cc-creditcards.aspx

Thanks for the great summary :)
 
 
0 #13 admin 2011-11-30 05:39
With the exception of UOB, the other banks' T&C state that the "administrative fees" listed above are NOT including "conversion fees" (usually 1%) by Visa/MC
 
 
+1 #12 Ashley 2011-11-30 03:43
The 1.5% for CIMB, does it include the 1% charge for MasterCard/Visa? And for other cards like DBS?

Cos if the 1% charge is not included, then all banks have about that same total admin fee on overseas transaction.
 
 
-1 #11 2011-03-12 08:25
I just called DBS and SCB, charges are as given in the article. No change!
 
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