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Guide to credit card surcharges

Everything you need to know about credit card surcharges and how you can avoid them.

Credit cards are convenient, but using them can often cost you more money than other payment options. As well as regular charges from interest rates and annual fees, you may also have to pay a surcharge when you use your credit card.

These surcharges are usually transaction-based and can make a big difference to the total transaction cost. Here, we look at when these fees are charged, how much you can expect to pay and how to avoid credit card surcharges so that you have a payment option that works for you in every situation.

HSBC Revolution Credit Card

HSBC Revolution Credit Card

Receive up to S$200 cashback.

Offer ends 31 Oct 2021

Eligibility criteria, terms and conditions, fees and charges apply.

HSBC Revolution Credit Card

  • Principal Annual Fee: S$0 annual fee for entire membership - S$0 thereafter.
  • Cashback Rate: 0%
  • Annual Interest Rate: 25.9%
  • Minimum Income (Singaporean & PR): S$30,000
  • Minimum Income (Non-Singaporean): S$40,000
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What is a credit card surcharge and when is it applied?

Surcharges are fees that merchants apply to your transactions to help them cover the cost of accepting a specific payment method.

For example, a business that accepts credit cards will be charged a fee for processing these payments. Depending on the card and type of transaction, this fee can range from 0.5% to 3% or more of the total transaction cost and is usually paid by the business to its bank. Businesses can choose to offset the cost of this fee through their pricing, or by applying a surcharge.

Payments that attract a surcharge

While credit cards often attract a surcharge, businesses can actually apply this fee to a range of different payment methods, including:

  • American Express (credit card, debit card and prepaid)
  • Mastercard (credit card, debit card and prepaid)
  • Visa (credit card, debit card and prepaid)
  • NETS (debit and prepaid)

Some businesses also apply a fee for other payment options, such as Alipay or PayPal. It is also uncommon for merchants to charge a fee for credit card payments below a certain amount, for example, a 3% fee may be imposed if you opt to make payment by credit card on transactions less than $20.

It’s important to note that any business that includes a surcharge must let customers know before they pay. They also have to provide a fee-free alternative, such as cash or direct deposit.

How much is a credit card surcharge?

The cost of a surcharge will vary depending on factors such as the business and the type of card. For credit card surcharges specifically, the cost is usually between 1% and 3%, but could be higher in some circumstances.

Credit card surcharges are strongly discouraged

According to Visa and Mastercard, the practice of imposing surcharges are in breach of the contract terms between merchants and acquiring banks. While it is not illegal, the practice is strongly discouraged. Merchants who impose such charges must also inform the customers before requesting for payment. Otherwise, customers have the right to report these merchants to the credit card providers.

Paying for a taxi

The surcharge, known as the administrative charge is applied when you use your credit or charge card to pay for a taxi is 10% of your fare price. The prevailing GST is also chargeable on top of the 10% administrative charge.

Credit card surcharges for in-store or online purchase

The surcharges you’ll pay for credit card purchases online will be imposed when you pay in foreign currency. This is known as a foreign currency transaction fee, which is generally between 1.5% and 3% of the total transaction cost.

Remember that any brick-and-mortar or online store that applies a credit card surcharge should clearly notify you before you make a payment. For example, if you’re shopping in-store, there should be signs at or near the checkout notifying you of any surcharges. Online, there is usually a similar notification of a surcharge for specific payment options. Remember, merchants also have to provide you with fee-free ways to pay, such as cash or direct deposit.

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How to avoid surcharges

While there are some instances where you have no option in paying a credit card surcharge, here are some ways you can avoid or reduce how much you pay in surcharges over time.

  • NETS. Network for Electronic Transfers (NETS) is a Singaporean electronic payment service provider which offers a full suite of payments processing services, such as direct debit and credit payments at point-of-sale. It is widely used nationwide and rarely incur any additional fees.
  • Use a debit card. Debit cards deduct payments directly from your bank account, so there’s generally no charges for using it.
  • Consider going to other businesses. In most cases, you may be able to shop around to find a merchant that charges reduced or no credit card fees. For example, some taxi companies charge as much as 10% for credit card payments, while Grab doesn’t apply any credit card surcharge and even allows you to link your card through the app for faster payment.
  • Link your card to PayPal. You can link your credit card account to PayPal and then use your PayPal account to make payments if the merchant provides this option as a fee-free alternative.
  • Booking flights with points. When booking flights with Jetstar and Scoot, you can avoid surcharge fees by booking your flight with Air Miles rather than cash.
  • Vouchers. Some airlines and institutions don’t charge payment fees when you use a voucher to make the purchase or booking.
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Frequently asked questions

The cost of a surcharge depends on a range of factors including the business, the cost of the transaction and the type of card you use. By taking note of when surcharges are applied, using alternative payment options or shopping around for a more affordable product or service, you can avoid paying, or at least reduce the cost of credit card surcharges, to make paying with plastic more affordable.

Compare credit cards

Name Product Reward Cashback Offer Annual Fee Min Income - Singaporean and PR
HSBC Revolution Credit Card
Earn up to 10X Reward points or 4 miles per S$1 spent on qualifying purchases.
Receive up to S$200 cashback. T&Cs apply. Ends 31 Oct 2021.
S$0 annual fee
S$30,000
New cardholders will be awarded with up to S$200 cashback, S$50 cashback for one qualifying transaction and S$120 cashback upon S$500 minimum spend. Receive an additional S$30 cashback when you apply online with MyInfo via SingPass. Existing HSBC credit cardholders are eligible to receive S$60 cashback. T&Cs apply. Ends 31 Oct 2021.
POSB Everyday Card
Enjoy up to 10% cash rebates on dining and online shopping at selected e-Marketplaces.
Get S$300 cashback with promo code ‘OCTFLASH' when you apply online and charge a minimum of S$300 within 30 days from card approval date. T&Cs apply.
S$0 annual fee for the first 1 year and S$192.60 thereafter
S$30,000
Get S$300 cashback with promo code ‘OCTFLASH' when you apply online and charge a minimum of S$300 within 30 days from card approval date. T&Cs apply. Valid until 18 Oct 2021.
UOB PRVI Miles American Express Card
Earn 1.4 miles for every S$1 spent locally and 2.4 miles for every S$1 spent overseas.
Get up to S$300 cash credit when you apply. T&Cs apply.
S$0 annual fee for the first 1 year and S$256.80 thereafter
S$30,000
Enjoy up to 20,000 bonus miles if you charge S$50,000 to your card in a year. Apply today and enjoy free transfers to Changi Airport.
HSBC Visa Platinum Credit Card
Earn 1 Reward point for every $1 on all spend.
Up to 5% cash rebates on groceries, dining and fuel with minimum monthly spend of at least S$600.
S$0 annual fee for the first 2 years and S$192.60 thereafter
S$30,000
New cardholders will be awarded with up to S$200 cashback, S$50 cashback for one qualifying transaction and S$120 cashback upon S$500 minimum spend. Receive an additional S$30 cashback when you apply online with MyInfo via SingPass. Existing HSBC credit cardholders are eligible to receive S$60 cashback. T&Cs apply. Ends 31 Oct 2021.
KrisFlyer UOB Credit Card
Earn 3 KrisFlyer miles per S$1 when you spend with Singapore Airlines, Scoot and KrisShop and 1.2 KrisFlyer miles per S$1 on all other spend.
Receive up to 3,000 miles and up to S$300 cash credit when you apply for a new credit card and spend at least S$1,500 within 30 days from card approval date.
S$0 annual fee for the first 1 year and S$192.60 thereafter
S$30,000
Apply and spend at least S1,500 within 30 days and receive S$300 cash credit and up to 3,000 miles. For first 100 new-to-UOB credit cardmembers. T&Cs apply. Valid until 31 Oct 2021.
UOB EVOL Credit Card
Enjoy a wide variety of discounts and cashback rebates on dining, entertainment, online shopping and travel.
Up to 8% cashback on online and mobile contactless spend.
S$192.60 annual fee
S$30,000
Apply and spend at least S1,500 within 30 days and receive S$300 cash credit. For first 100 new-to-UOB credit cardmembers. T&Cs apply. Valid until 31 Oct 2021.
UOB Lady's Card
Earn 10X UNI$ (or 20 miles) per S$5 spent on a chosen spending category with no min. spend required, and 1X UNI$ (or 2 miles) on other purchases.
Receive up to S$300 cash credit when you apply for a new credit card. T&C apply.
S$0 annual fee for the first 1 year and S$192.60 thereafter
S$30,000
Apply and spend at least S1,500 within 30 days and receive S$300 cash credit. For first 100 new-to-UOB credit cardmembers. T&Cs apply. Valid until 31 Oct 2021.
HSBC Advance Credit Card
Receive up to S$200 cashback when minimum spend requirements are met.
Enjoy up to 3.5% cashback on all purchases with no minimum spend
S$0 annual fee for the first 1 year (permanently waived for HSBC Advance banking customers) and S$192.60 thereafter
S$30,000
New cardholders will be awarded with up to S$200 cashback. S$50 cashback for one qualifying transaction and S$120 cashback upon S$500 minimum spend. Receive an additional S$30 cashback when you apply online with MyInfo via SingPass. Existing HSBC credit cardholders are eligible to receive S$60 cashback. T&Cs apply. Ends 31 Oct 2021.
UOB One Credit Card
Receive up to S$300 cash credit when you apply for a new credit card and spend at least S$1,500 within 30 days from card approval date.
Up to 10% cashback with some merchants including Grab,7-Eleven and Cold Storage; 6% for Singapore Power Utilities bills; and 5% back on all other retail spending.
S$0 annual fee for the first 1 year and S$192.60 thereafter
S$30,000
Apply and spend at least S1,500 within 30 days and receive S$300 cash credit. For first 100 new-to-UOB credit cardmembers. T&Cs apply. Valid until 31 Oct 2021.
American Express Singapore Airlines KrisFlyer Ascend Credit Card
Earn 1.2 KrisFlyer miles per S$1 spent on local purchases, with no cap.
N/A
S$337.05 annual fee
S$50,000
Get a complimentary stay at Sofitel Singapore Sentosa Resort & Spa, Luxury Room (worth up to S$460++) when you spend S$5,000 within the first three months and an additional 10,000 KrisFlyer miles if you are new to American Express. T&Cs apply. Valid until 31 January 2022.
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