How to avoid foreign currency exchange fees when travelling

Are you going overseas? Avoid foreign transaction fees with the right travel money option and save on your vacation costs.

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Using a credit card while travelling overseas may be convenient, but it can get quite costly when you factor in rates and fees. Learning how to get the most favourable rates and how to avoid unnecessary fees can go a long way towards saving you cash that could be better spent on your travels.

What rates and fees should I be watching out for?

Whether you’re spending overseas or shopping online with an international merchant, you’ll usually encounter a foreign currency exchange rate and a foreign currency fee. If you’re using a credit card or travel card, you may find that the card exchange rate is less favourable than the listed interbank rates.

The foreign transaction fee is usually a percentage (such as 3%) of the transaction amount, which can add up if you’re using the card regularly or paying for big-ticket items.

These fees can be avoided though. It’s all about choosing the right travel money product. You can compare some of your options in the table above.

How can you avoid foreign currency exchange fees?

No foreign transaction fee credit cards

If you’re a frequent traveller to faraway lands, it is advisable to seek out credit cards designed for travelling. These cards advertise low or no fees on foreign transactions, are connected to extensive worldwide ATM networks, and in some cases will even waive any extra fees for currency conversion. You may pay a slightly higher annual fee for this type of credit card, but the money you’ll save on overseas spending might balance that out.

Prepaid travel money cards

Prepaid travel money cards may not be common practice in Singapore, but provide a happy compromise between credit card and cash. You can load these cards with Singapore dollars, then convert the funds you’ve loaded into any of the foreign currencies supported by the card. Then if you use your card to spend anywhere the loaded foreign currencies are the local currency, you’ll save on currency conversion fees.

These cards can come with fees including purchase fees, loading or reloading costs and ATM withdrawal charges. Weigh these fees up against how much you could save on currency conversion fees to determine whether it’s a valuable option.

Using debit cards

Most Singapore debit cards will charge foreign currency exchange fees when used overseas. To save costs on your next holiday, look for a debit card with low or no foreign transaction fees. Unlike a credit card, debit card transactions don’t incur interest and you can withdraw funds without being charged a cash advance fee. If your card belongs to an international ATM alliance, you can also save on ATM withdrawal costs. You can compare debit cards designed for travel here.

Rewards and frequent flyer credit cards

Rewards and frequent flyer credit cards allow you to earn points for every S$1 you spend on eligible purchases. While these cards usually come with higher annual fees and interest rates, you can find some that come with no foreign transaction fees. If you’re usually able to repay your balance each month, a rewards credit card with no foreign transaction fees could be a great way to get rewarded for your holiday expenses.

Using cash

Carrying the local currency in cash is another way you can avoid foreign transaction fees on day-to-day holiday expenses. It’s not exactly safe to carry all of your travel budget in cash though, so look for a card that has low ATM withdrawal fees and make sure that you have more than one way to access your funds.

Compare credit card foreign currency transaction fees

Name Product Foreign Currency Transaction Fee Reward Annual Fee
HSBC Revolution Credit Card
2.8%
Up to 5X Rewards points (2 miles per S$1 spent) on online, dining and entertainment purchases
S$0 annual fee for 2 years - S$160.50 thereafter
Get free Samsonite T5 68cm Spinner luggage with built-in scale worth S$560 or S$150 cash back when you spend S$800 in qualifying transactions from card approval to the end of the following month. Receive an additional S$20 worth of grab rides when you apply online with MyInfo via SingPass. T&Cs apply. Ends 31 Dec 2019.
HSBC Visa Platinum Card
2.8%
Up to 5% cash rebate on groceries, fuel and dining
S$0 annual fee for 2 years - S$192.60 thereafter
Get free Samsonite T5 68cm Spinner luggage with built-in scale worth S$560 or S$150 cash back when you spend S$800 in qualifying transactions from card approval to the end of the following month. Receive an additional S$20 worth of grab rides when you apply online with MyInfo via SingPass. T&Cs apply. Ends 31 Dec 2019.
HSBC Advance Credit Card
2.8%
Up to 3.5% cashback on all purchases with no minimum spend
S$0 annual fee for 1 year (permanently waived for HSBC Advance banking customers) - S$192.60 thereafter
Get free Samsonite T5 68cm Spinner luggage with built-in scale worth S$560 or S$150 cash back when you spend S$800 in qualifying transactions from card approval to the end of the following month. Receive an additional S$20 worth of grab rides when you apply online with MyInfo via SingPass. T&Cs apply. Ends 31 Dec 2019.
Standard Chartered Spree Credit Card
3.5%
Up to S$60 cashback monthly with no minimum spend
S$0 annual fee for 2 years - S$192.60 thereafter
Get S$80 cashback with activation of card within 30 day upon approval. Existing cardholders will receive S$20. Ends 31 Dec 2019.
Standard Chartered Unlimited Cashback Credit Card
3.5%
1.5% cashback on all spend with no cap and no minimum spend
S$0 annual fee for 2 years - S$192.60 thereafter
Get S$80 cashback with activation of card within 30 days upon approval. Existing cardholders will receive S$20. Ends 31 Dec 2019.
Standard Chartered Rewards+ Credit Card
3.5%
Up to 10X rewards points for every S$1 spent in foreign currency
S$0 annual fee for 2 years - S$192.60 thereafter
Get S$80 cashback with activation of the card within 30 days upon approval. Existing cardholders will receive S$20. Ends 31 Dec 2019.
Citi PremierMiles Visa Card
3%
2 Citi Miles for every S$1 spent overseas, 1.2 Citi Miles per S$1 spent locally with no minimum spend and 1.5 Citi Miles per S$1 spent locally with minimum spend of S$3,000 per statement month.
S$0 annual fee for 1 year - S$192.60 thereafter
Receive 40,000 miles when you spend S$9,000 in the first 3 months and pay the annual fee. Ends 31 January 2020.
Citi Rewards Credit Card
3%
10X Rewards on your shopping spend (local and overseas) and online purchases (except mobile wallet and travel-related transactions), plus 1X Rewards Points on all other spend, no cap or minimum spend required
S$0 annual fee for 1 year - S$192.60 thereafter
Receive 30,000 Citi Thank You points when you spend S$3,000 in the first 3 months. Ends 31 January 2020.
Citi Cash Back Card
3%
Earn up to 8% cash back on dining, groceries and petrol worldwide.
S$0 annual fee for 1 year - S$192.60 thereafter
Get a welcome gift of S$120 cash back when you spend S$1,200 in the first 3 months. Ends 31 December 2019
Citi Prestige Card
3%
Earn 5 ThankYou Points (2 Miles) per S$1 overseas spend and 3.25 ThankYou Points per S$1 local spend
S$535 annual fee
Receive a welcome gift of 62,500 Citi ThankYou Points (25,000 Miles). Ends 31 December 2019.
Citibank SMRT Card
3%
Up to 5% savings on groceries, fast food, movies, and coffee.
S$0 annual fee for 2 years - S$192.60 thereafter
Receive a welcome gift of S$120 cash back when you spend S$1,200 in the first 3 months. Ends 31 December 2019.

Compare up to 4 providers

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What are the other costs and features to consider?

Even if your travel money card or strategy helps you avoid currency conversion fees, there are still other costs and factors to consider. When you’re comparing your travel money options, keep the following in mind as well:

  • ATM fees. If you’re not careful, you could end up paying fees for using an overseas ATM twice. Unless your bank has a global ATM alliance that allows you to make international withdrawals for free, you could be charged by your bank and the issuing bank for withdrawals and even account balance enquiries when travelling.
  • Annual fee. The price for paying low or no foreign transaction fees on your credit card is often a high annual fee. Before committing to any one card, make sure that the savings and rewards you’ll reap outweigh the annual fees for the card. You can compare cards with no annual fee or foreign transaction fee here.
  • Supported currencies and global acceptance. Make sure the card you’re using will work in your holiday destination. Make sure that your credit card is accepted worldwide, as you can expect with a Visa, Mastercard or American Express. If you’re using a travel money card, make sure it supports the local currency you’ll be using or doesn’t charge a currency conversion fee.
  • Merchant fees. You might find in some places that the merchant adds a surcharge to your transaction for using a foreign issued credit card. It’s smart to check your bill before paying to avoid these fees and have backup travel money options (such as cash or a travel card) on hand in those events.
  • Exchange rates. Check to see how often exchange rates are updated and if there are additional fees for currency conversion. A good way to avoid negative exchange rate movements is to lock in the rates with a travel money card.
  • Additional travel perks. Complimentary travel insurance, a 24/7 global emergency customer service line and frequent flyer rewards programs are all extras that could offer some added value to your card.

How often you travel, the length of your stay, and the way that you spend money abroad all factor into your decision about the type of credit, debit or travel card to use abroad. Be sure to consider your typical expenses and everyday spending needs when choosing a card that will offer you the most value.

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