A credit card can add a lot of convenience to your international trips. It saves you from the burden of carrying cash, which is not just inconvenient but also unsafe. Also, now that credit cards are being specifically designed to take care of all your travel needs including travel insurance, there is no reason to not use one while travelling and shopping abroad. However, there is a price for all that convenience. Card issuers charge a foreign transaction fee when you purchase something overseas or when you make a payment that is processed by a non-Singapore bank. This fee that is applicable to your card is always mentioned in its terms and conditions. Most often, this fee is in the range of 2-3% and may vary depending on the card issuer and the payment network. A foreign transaction fee comprises three different types of charges that generally apply to credit cards:
As of now, there is no card that doesn’t charge any foreign transaction fee. However, there are some card issuers that do not charge any admin fee. This means that your foreign transaction fee will be reduced to just the payment network fee and the dynamic currency conversion fee (if applicable). One such card that currently doesn’t charge any admin fee is CIMB Visa Signature Credit Card. With this CIMB credit card, you will only have to pay 1% fee as charged by Visa or Mastercard for your foreign transactions. The dynamic currency conversion fee applicable to this card is also 1%.
Some of the cards that are available with no foreign transaction fee are:
|Credit Card||Annual Fee|
|CIMB Platinum Mastercard||No annual fee for primary cardholder|
|CIMB Visa Signature||No annual fee for primary cardholder|
|BOC Zaobao Credit Card ( for transactions made in RMB)||Waived for first 2 years, S$190|
|BOC Visa Infinite Card||S$350 for principal cardholder|
|ICBC Koipy Dual Currency Credit Card (no administrative fee for transactions in RMB)||Waiver of annual fee for 3 years|
|ICBC UnionPay Dual Currency Credit Card( for transactions in RMB)||No annual fee for 3 years|
|ICBC VISA Dual Currency Credit Card ( for transactions made in USD)||No annual fee charged for 3 years|
As you can see, there are a number of different credit cards that will waive of foreign transaction fees. So, how exactly will you know which card is the best for you? Here are some things to consider before picking a credit card.
Usually, 0% foreign transaction fees come coupled with some kind of annual fees. Some cards also provide these cards with no annual fees charged. If you decide to go with a card that has no annual fee, you should carefully read the terms and conditions of the card to fully understand the benefits. If the annual fee exists, it is advisable to pick a card whose benefits more than make up for the cost.
Another thing to consider while making purchases overseas, is the interest rate. As much as it is advised to pay off your dues every month, what happens if you forget to do so in a particular month or if you don’t have the finances to pay one month’s bill? Credit cards charge very high interest rates and this could blow a hole in your pocket.
If you think you will not be paying off the full balance in a month, it is better to go for a card with lower interest rates. This way you can avoid paying a ton of money just in interest payments alone.
Generally, using the ATM to withdraw cash overseas might also have a certain charge attached to it. Going for a card which does not charge users for withdrawing cash overseas can be the better option.
You should also keep an eye on this aspect of the credit card you choose. Even though you can get a credit card with S$0 ATM overseas charge, there is usually a cash advance fee that can range up to 4% of the transaction. The thing about this is that the interest charged on this transaction can also be considerably higher than the purchase interest rates.
Apart from all these features, another thing that you should consider is the travel benefits associated with the cards. There are cards that offer a number of benefits ranging from comprehensive travel insurance to access to exclusive airport lounges. Be sure to read the terms and conditions carefully to determine if you actually qualify for such privileges.