0% Foreign Fees Credit Cards

How to compare low foreign transaction fee credit cards

A bunch of credit cards offer low foreign transaction fees, so what else should you compare when considering a credit card to use overseas?

• Overseas ATM withdrawal fees. Getting cash out of an ATM overseas can also attract a fee worth at least $5 or between 2-4% of the total transaction. Choosing a card which doesn’t charge for international ATM withdrawals can allow you to avoid this charge.
• Cash advance fees. Even if you get a credit card that offers $0 ATM fees overseas, using it to withdraw cash can attract a cash advance fee that’s typically between 2-4% of the transaction. You’ll also be charged interest at the cash advance interest rate, which is higher than the purchase rate on most credit cards.
• Annual fees. Some credit cards with low foreign transaction fees may also come with $0 annual fee, but others may come with yearly fees of tens or hundreds of dollars. If it does have an annual fee, make sure that the perks you’ll get from the card outweigh this cost.
• Purchase rates. If you’re using your card to make overseas purchases but won’t be paying back your balance in full each month, you’ll need to consider the purchase interest rate.
• Other travel benefits. Some cards offer additional travel benefits, such as complimentary travel insurance, airport lounge access or bonus frequent flyer points for your spending. Make sure you meet any requirements listed to take advantage of these perks, otherwise they won’t add to the value of the card.

How does foreign currency conversion work?

When you make a purchase or transaction in a foreign currency using a Singapore credit card, the total amount needs to be converted into Singapore Dollars. The conversion process varies based on factors including the card provider and whether it’s an American Express, Mastercard or Visa product. Currency conversion exchange rates are updated on a daily basis and apply even if you have a card that charges $0 foreign fees. Please note that most banks use an exchange rate that’s less competitive than the standard rate.

What exchange rate will I receive?

Depending on the card you’re using, you will receive the exchange rate set by Mastercard, Visa or American Express. The following diagram explains how Singapore credit cards convert currency with American Express, Mastercard, Visa or UnionPay:

Mastercard, Visa and American Express will convert the foreign currency amount to USD before converting it to S$ (unless your transaction is already in USD). Both of these conversions will transfer at the daily exchange rate.

UnionPay will convert your foreign currency amount directly to S$ at the daily exchange rate.

• Mastercard, Visa and American Express. All transactions made in a currency other than United States Dollars (USD) will be converted to USD before it is converted to S$.

• UnionPay. Transactions made in the following currencies will be converted directly to Singapore Dollars (S$):
  • United States Dollars (USD)
  • Chinese Yuan (CNY)
  • Brunei Dollar (BND)

For transactions made in any other foreign currencies, UnionPay will convert the currency to USD before it is converted to S$. As a result, if the Singapore Dollar is not favourable against the United States Dollar, using a UnionPay credit card for any of the listed currencies could be the most cost-effective option.

Mastercard and Visa both have their own currency conversion calculators, but you can also compare exchange rates from popular transfer providers on Finder.

What is Dynamic Currency Conversion?

When you shop overseas with a Singapore-issued card, you may be asked if you’d like to spend in the local currency or Singapore dollars. This refers to Dynamic Currency Conversion (DCC) and opting to pay with Singapore dollars will subject your purchase to extremely poor exchange rates from the DCC and additional bank charge from your credit charge issuer. If you’re spending with a card with 0% on foreign transaction fees, you should always opt to pay in the local currency rather than in Singapore dollars. Want to know more about DCC? You can see finder’s guide to Dynamic Currency Conversion for more information.

What other travel money options are available?

It’s often useful to have several ways to access money when you’re overseas. As well as a credit card, you may want to consider some of these other travel money products:

• Foreign cash. Having cash on hand when you’re travelling overseas can come in handy if you’re spending somewhere that doesn’t accept card (such as transport tickets, taxis or at markets). Using cash is also another easy way to avoid foreign transaction fees. You can check out finder’s guide to buying foreign currency to get started.
• Debit card. Your everyday Mastercard or Visa debit card can also be used overseas, wherever these brands are accepted. Just keep in mind that currency conversion fees may also apply for a debit card and be aware of the potential complications if your account’s security is compromised while you’re away. You can also compare debit cards with low foreign transaction fees on Finder.
• Prepaid cards. You can also use a prepaid card load and spend funds in multiple supported currencies. When you move currency from Singapore dollars to a supported foreign currency, it’s also locked in at the current exchange rate (which could help you avoid fluctuating rates and manage your budget better while you’re travelling). When you spend in a supported foreign currency, you can avoid currency conversion fees with these cards.

If you’re a frequent traveller or regularly shop online with international retailers, a credit card that has reduced foreign transaction fees could help you keep your costs to a minimum. Just remember to compare a range of options and look at the other features available so that you can find a credit card that suits your needs.

• *Disclaimer

  *The products compared here are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order for the products we list on our site, so we enable you to re-order and compare products. The initial display order is influenced by a range of factors including commercial partnerships, product costs and conversion rates, so please don’t interpret the listing order as an endorsement or recommendation from us. We’re happy to provide you with the tools you need to make better decisions, and we encourage you to make your own decisions and compare and assess products based on your individual needs, preferences and circumstances.