Credit Card Expenses Overseas | Limit Overseas Spending on Credit Cards
Credit Cards
by Priyadarshini
2 November 2021
When you’re on vacation, using your credit card is the best thing to do. It also saves you from having to travel to exchange currency every time you plan an abroad vacation. However, like with other conveniences, there are fees involved. When you use your credit card to pay for something in another country, you incur additional charges and fees. And this may increase the cost of your vacation. In this blog, we tell you how to cut down credit card expenses overseas.
Five Ways to cut down credit card expenses overseas
Examine the fees levied by each of your credit cards
As you can see, most credit cards will levy a combination of the three sorts of fees. At the time, there is no difference in the fees charged by MasterCard and Visa when used abroad. As a result, you should compare the total cross-border transaction fee + currency exchange fee levied by each of your cards.
The simplest method to find out is to phone your bank and inquire. Your fees will vary depending on:
- The card’s issuing bank
- Whether it’s a Visa, MasterCard, or American Express,
- Any waivers or discounts on foreign transaction fees or foreign exchange fees that are specific to your card
When travelling abroad, never pay with Singapore dollars
If you’ve ever tried to use your credit card abroad, the cashier may have asked if you wanted to pay in Singapore dollars or the foreign currency.
Always, always, always prefer to pay in foreign currency. When you select to pay in SGD, you will be charged dynamic currency conversion costs. This will add an additional percentage to your bill in exchange for the convenience of knowing how much you’re paying in Singapore dollars. Furthermore, if your credit card operator offers superior cashback, incentives, or miles for foreign currency spending, paying in SGD will make no sense. As it may result in these transactions being classified as SGD purchases and hence not qualifying for the better perks.
Consider establishing a multi-currency account
If you’re a frequent traveller, you might consider opening a multi-currency account. You can then wait for favourable exchange rates to swap SGD for your preferred currency. Put that money into your account and use your debit card to pay for things while travelling, or just withdraw cash at your destination. This allows you to avoid currency conversion and foreign exchange fees entirely.
You could also use a multi-currency mobile wallet
To enjoy the benefits of a multi-currency account, you do not need to open a multi-currency bank account. You can simply have a multi-currency mobile wallet in the form of an app. There are also a number of new entrants in this field. For instance, YouTrip, TransferWise, Revolut, etc. for Travel & Remittance. If you’re tired of paying international transaction fees, remember that cash isn’t your only alternative. You may carry one of these multi-currency travel cards with you and convert the currency while you’re on the go, saving money on currency exchange fees.
Use a credit card that rewards you for spending money abroad
If you can’t avoid paying overseas transaction fees for your credit card spending abroad, at least make sure you’re rewarded for it. The UOB Visa Signature Credit Card, for example, offers 10X points (or 4 miles per dollar) on all international transactions, including those done online. If you’re a frequent flyer, you might find that this compensates for the many extra prices. There will undoubtedly be a “best” card for your foreign spending based on your specific spending habits. And you can easily cut down credit card expenses abroad.
