I’ve associates who use their bank cards overseas for his or her journey spending, with zero clue in regards to the additional charges and prices they’re being made to pay. As an alternative, they’re comfortable in regards to the “upsized” miles they’re incomes – “my card provides me 2.2 mpd abroad, Daybreak!”

If you happen to’ve ever used your bank card to pay in your overseas forex transactions (this consists of on-line funds with abroad retailers), do you know that there’s an entire record of charges that you simply may need unwittingly paid for?

Let’s discuss in regards to the charges

Charges and prices associated to FCY transactions embody:

• Dynamic Forex Conversions (DCC): 3%-4%
• FX conversion charges: 3% – 3.5%
• Cross-border SGD charges: 1%

PSA: all your FCY transactions are subjected to a 3% – 3.5% price by your financial institution or card community.

Your financial institution’s FCY conversion charges

Dynamic Forex Conversion(s) charges

If you happen to’ve ever paid any abroad service provider in SGD as a substitute of the service provider’s native forex, guess what? You is perhaps sufferer of the Dynamic Forex Conversions (DCC) charges too, which many label as a rip-off. It is a widespread method for retailers to earn extra cash from unsuspecting prospects, because it psychologically feels higher for the shopper to pay in their very own forex fairly than a overseas one. I’ve obtained my buddy Aaron from the Milelion to thank for shedding the sunshine on sneaky DCC charges.

Do you know? Dynamic Forex Conversion (DCC) is a service provided by fee answer suppliers which permits customers to pay of their native forex when utilizing their bank cards abroad.
The catch? Your forex conversion is finished at a fee that's largely unfavourable to you, and helps generate extra income unfold which will get break up between the service provider and the fee answer supplier.

You’ll be able to learn Visa’s advisory on DCC right here, and due to Aaron, I’ve realized that if anybody desires to strive disputing the cost with their financial institution, you may quote the related chargeback codes:

• Visa: Motive Code 76 – Cardholder was not suggested that Dynamic Forex Conversion (DCC) would happen. Cardholder was refused the selection of paying within the service provider’s native forex
• Mastercard: Motive Code 4846 – The cardholder states that she or he was not given the chance to decide on the specified forex wherein the transactions was accomplished or didn’t comply with the forex of the transaction

FYI, this occurs extra usually than you suppose. You could have encountered it if a service provider bothered to ask you which ones forex you like to pay in, however lots of them don’t – as a substitute, most will robotically select the DCC possibility for you, with out your consent.

Even should you suppose you’ve been spared from DCC practices, don’t rejoice so quickly. Even abroad retailers like iHerb, Google Play Retailer, Apple App Retailer and AirBnB can impose DCC on you while you ebook on-line with them, as they robotically convert overseas transactions into the forex of your bank card! Some of us have known as out this as a rip-off, however guess what? You don’t have a say.

Cross-border administrative price

Whereas it could sound like a good suggestion to know the way a lot you’re paying in SGD precisely, anecdotal observations have famous that the transformed quantity usually comes with a mean mark-up of a minimum of 3%, if no more. What’s worse is that every time you pay in SGD overseas, most Singapore banks additionally levy a cross-border price of about 1% of your transaction value.

In complete, you’ll simply be paying about 4 – 5% in prices in complete only for that psychological consolation that comes with paying in SGD.

I’ve compiled an inventory of bank cards that give the best earn charges on FCY spend and are common amongst many travellers.

However there’s a catch. If you happen to see the half I’ve highlighted in yellow, you’ll discover that every one these miles (or 8% cashback) comes with hefty financial institution FCY charges.

To collect the proof for this, I intentionally examined this with my finest on-line miles card – DBS Lady’s World, 4 mpd – to examine after I was in New York final month catching a Broadway Present.

You’ll be able to see that DBS charged me SGD 230.90 for my USD 164 buy, which confirms the ~3.25% financial institution FCY price levied on high of my transaction.

Previous to this, I introduced my DBS Vantage Card on all my abroad journeys with me as a result of I used to be attracted by the financial institution’s advertisements to earn 2.2 mpd on my FCY spend overseas. After I realised this, I took my DBS Vantage out of my abroad pockets for good.

This begs the query:

Why pay financial institution FCY charges to get miles when there’s amaze?

Understanding there’s a workaround for me to get 4 mpd and bypass the excessive(er) financial institution charges, why ought to I accept 2.2 mpd AND pay DCC or awful FX charges by swiping my precise bank card in any respect?

I’ve raved in regards to the amaze card since 2019 and until date, it stays my best choice for an abroad card. Every time I fly and even drive into JB, I faucet my amaze card all over the place I am going.

And since I used to be sharing about this amaze hack on my Instagram throughout my current Korea journey, I had some skeptics who didn’t imagine that amaze was actually higher…so I went to get proof once more.

Beneath you’ll see 2 transactions on the similar store in Korea, the place the charges work out to be:

• Paying direct with my UOB card = 3.25% financial institution FCY charges
• Paying through amaze = 1% above Mastercard’s fee  

I don’t learn about you, however I’d a lot fairly pay 1% than 3.25% to get the identical reward of 4 mpd.

Finances Babe

How does amaze evaluate to YouTrip?

I’ve misplaced depend of how many individuals DM-ed to ask me whether or not amaze is best than YouTrip. If you happen to’re questioning that too, you’re evaluating it unsuitable as a result of each playing cards are good for serving totally different functions

With multi-currency pockets playing cards like YouTrip or Revolut, their elementary objective is to scale back the price of your FCY transaction as a lot as doable. The mechanics subsequently contain you changing currencies as you go, which additionally means many travellers take care of leftover foreign exchange on the finish of their journey that they need to convert again – at a unique day’s fee. You don’t earn any miles for a single greenback of your spend on YouTrip, Revolut and even Smart.

With amaze, the concept is to allow you to earn rewards whereas paying lower than a conventional bank card. And since no bank card presents the Google / XE / mid-market charges, your appropriate foundation of comparability must be the Mastercard charges as a substitute. My expertise with amaze exhibits that the amaze’s fee is roughly about 1+% increased.

However Daybreak, I need to pay the bottom charges AND get my miles!

Positive, I hear you. Sadly there’s no such answer out there in the present day, however what’s stopping you from inventing one? Let me know when you do, so I can shoutout on this weblog about it too.

Therefore, your alternative boils down to selecting one of many following choices. Would you fairly

• Pay the financial institution’s 3.25 – 3.5% FCY charges and get their FCY miles earn fee (often 2+ mpd)? or
• Pay through amaze (1+% increased than Mastercard) and get native SGD miles earn fee? or
• Pay through YouTrip / Revolut / Smart and get zero miles (for each topping up the pockets and for spending)?

Personally, I exploit amaze as my main mode of fee abroad, but additionally maintain a multi-currency pockets possibility like YouTrip / Revolut / Smart helpful as backup – that’s for all of the occasions after I could have to withdraw money overseas as a result of sure locations (e.g. avenue distributors) don’t settle for card funds.

Don’t overlook, amaze additionally awards InstaPoints (IP) every time you transact with them, which work virtually as cashback:

• As of June 2024, customers earn 0.5 IP for each S$1 (in FX equal)
• Max cap of 500 IP earned monthly
• 2000 IP = $20 pockets credit score

I can simply spend my InstaPoints pockets credit like money, by merely altering the fee supply for my amaze card to deducting it from the pockets as a substitute of my linked bank card.

It is a bonus, though none of us who use amaze have sometimes counted within the cashback as a characteristic anyway. It’s extra of a bonus than anything (ooh yay I’ve some more money free of charge!).

With the max cap, this implies you may solely earn amaze cashback on a most of S$1,000 of your FCY bills. There’s a straightforward workaround although – get 2 amaze playing cards should you’re travelling with a companion, and front-date your transactions for automotive leases or actions, or basically anything you may pre-book forward of going in your journey.

So should you’re spending enormous {dollars} contributing to a overseas nation’s financial system whilst you’re away from dwelling and spend something north of these limits, then too unhealthy, however hey, a minimum of you’re nonetheless incomes your bank card miles through amaze!

What playing cards can you employ with Amaze?

As a reminder, Amaze can solely be paired with bank cards on the Mastercard community and means that you can hyperlink as much as 5 playing cards.

My suggestions are to:

• Use the Citi Rewards as your main Amaze pairing, capped at S$1,000
• Use the UOB Woman’s Solitaire Card for eating and journey (the 2 classes we’re almost definitely to spend on when abroad) capped at S$2,000
• Use the OCBC Titanium Rewards for procuring, capped at S$1,100
• As soon as maxed out, swap to make use of UOB Krisflyer (uncapped) for eating, procuring, journey and transport
• Alternatively, swap to UOB PRVI Miles for 1.4 mpd (uncapped) and throughout extra classes

Reminder: the UOB Krisflyer Card requires you to spend a minimal of S$800 on Singapore Airways, Scoot, Kris+ or KrisShop throughout the 12 months to be eligible for the upsized 3 mpd. If you happen to fail to satisfy this requirement, you’ll solely be getting 1.2 mpd.
This requirement is pretty straightforward to get round – simply cost your air tickets to the cardboard, or taxes and surcharges on a KrisFlyer award redemption, and even paying for add-on providers with Scoot like baggage, seat choice and meals. The accelerated Miles can be awarded on these transactions from the beginning of your membership 12 months, not simply from the time the minimal spend was met, so you may technically begin spending on the cardboard first earlier than you clock your SIA Group $800 spend for the 12 months.

However should you’re not a fan of ready for UOB Krisflyer to put up your accelerated miles (takes anyplace between 2 – 14 months), then the UOB PRVI Miles can be a greater match, albeit at a downsized 1.2 mpd.

These 5 playing cards ought to be greater than sufficient to cowl most of your abroad spending, although it undoubtedly requires some switching forwards and backwards on the amaze app to maximise it.

Conclusion: why I exploit my amaze card after I journey

I hope this text serves as a wake-up name for anybody who hasn’t been monitoring their card transactions and didn’t realise you’re really being levied charges on all of your FCY spend.

Extra importantly, I extremely suggest that you simply get the amaze card for while you journey overseas – and I hope this put up helps you perceive the trade-offs you’re settling for while you select another possibility aside from amaze.

If you happen to favor to transform on the lowest charges and earn no miles, or to pay your financial institution charges to earn the identical (if not lesser) miles in your FCY spend, that’s cool.

I’m Finances Babe although, so I favor to go for an possibility the place I get to earn miles for the least charges.

Want a referral code for amaze? Use DAWNBB to get welcome InstaPoints that you may later convert into money for spending in your amaze card.

If you happen to discovered this information helpful, go forward and share it with others!

With love,
Daybreak