Do you travel overseas? Do you shop online for overseas brands? The answer for most people is ‘Yes’ and ‘Yes’, and if you’re not using a credit card that rewards overseas spending, you’re missing out. Compare the most rewarding credit cards for your overseas spending right here at Finty.
$10 cash upon getting your card, even for existing HSBC cardholders
Samsonite T5 68cm Spinner Luggage worth $560 or $150 cashback ($30 cashback for existing HSBC cardholders)
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Learn about overseas spending credit cards
Find out how to earn more cashback and rewards when travelling or buying online from overseas stores.
Do I need to notify the card issuer before I use my credit card overseas?
Many cards require you to notify the issuing bank of your travel dates and destinations, so that they can activate your card for overseas use. This is a precaution designed to prevent unauthorised overseas charges, so check your card’s Terms & Conditions to find out if this notification is needed. And even if it isn’t, it’s a good idea to let your card issuer know about your travel plans, to avoid having them freeze your card when they suddenly see unusual overseas transactions.
You will normally be able to activate your card for overseas travel via online or mobile banking. Some banks ask you to notify them by SMS, or let you perform the activation at an ATM.
Is there any way to avoid credit card foreign transaction fees?
Yes. There are several ways to do this.
One, you can avoid them completely by choosing one of the very few cards that do not charge a fee (usually between 2.5% and 3.5%) on top of the amount of your purchase when converted to SGD. In some cases this charge is levied even when you have originally paid in SGD, because the merchant’s transaction processing centre is located outside Singapore.
Two, you could look for a card offering cashback on all transactions, or on overseas transactions, at a rate equal to or higher than the percentage charged for overseas transactions. The cashback will either wipe out the effect of the overseas transaction charge, or even deliver you a net gain.
Alternatively, if you think you have a good grasp of what an air mile is worth to you, you should be able to work out how many cents return per dollar spent you are getting in air miles. For example, if you think you can use your air miles in a way that makes them worth 1.2 cents each, and your credit card gives you an average of 3 air miles per dollar spent, you are effectively getting a rebate of 3.6 cents per dollar and can happily pay a foreign transaction charge of up to 3.5% and still come out ahead.
What is an overseas spending credit card?
There are two main features that define a credit card as an overseas spending credit card.
Firstly, it may give special rewards to both online shoppers and overseas travellers for all their spending with merchants located outside Singapore, regardless of the currency used for the purchase. Rewards come in the form of air miles or cashback.
Secondly, a few cards waive the foreign transaction fee (often a 2.5%-3.5% charge levied on top of the purchase price when converted to SGD) or have a lower than usual overseas transaction fee, making your overseas spending less expensive.
Some overseas spending credit cards may have only one of these features, while a small number have both.
What other features should I look for in an overseas spending credit card?
While you want extra rewards for your overseas spending, it would be good to have a card that also offers healthy rewards for local spending, and other benefits for regular travellers, so that you don’t need to keep too many credit cards in your wallet. So look for an overseas spending credit card that also gives air miles on local purchases, and other perks like extra miles for travel-related spending (like flights and hotel accommodation) plus free airport lounge passes and free travel insurance. You may also be able to score car hire, limousine transfer, golfing and yachting privileges, usually by paying a higher annual fee.
What should I do if I’m given the option to pay in SGD via Dynamic Currency Conversion (DCC) when travelling overseas?
We don’t recommend this option, for two reasons. First of all, you’ll still pay a foreign transaction fee (if the card charges one) because the transaction is being processed overseas. But most importantly, DCC exchange rates are almost always less attractive than the exchange rate used by your card issuer.
Why do many credit cards offer higher rewards and air miles for overseas spending?
Banks know that many cardholders hesitate to use their cards when travelling overseas, and prefer to use cash. But they want you to use your card wherever you go (because they make a profit from the fees they charge to merchants) and therefore offer you an extra incentive for using your card overseas.
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Some of the products and services listed on our website are from partners who compensate us. This may influence which products we compare and the pages they are listed on. Partners have no influence over our editorial staff.
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