From 1 November 2019, DBS will have one of the highest fees for foreign transactions for its Visa and Mastercard credit cards.
DBS will be raising its foreign currency transaction fee on all DBS & POSB Visa and Mastercard credit cards from the existing 3% to 3.25% from 1 November 2019.
The notice did not mention anything about Amex cards, so it should be staying at 3% for now.
What are foreign currency transaction fees?
When you use your credit card overseas, there are typically two fees involved that is added to the converted amount:
- The card network fee (charged by Visa, Mastercard or Amex)
- The bank transaction fee
These fees are incurred for processing the transaction, converting them into the billing currency (Singapore dollars for those using Singapore credit cards, etc).
The prevailing rates charged by the card networks are as follow:
- Visa & Mastercard – 1%
- American Express – 1 to 1.25%, depending on bank
Different banks have different transaction fees, which will bring the total up to anything between 2.75% to 3.25%.
What this means is that you are effectively paying not only for the ability to use your credit card overseas, but also for the rewards you are earning.
So how much am I effectively paying for miles?
Of course, this question only applies for when you use your credit card overseas, as opposed to cold, hard cash.
In DBS’ case, there are two key cards we are looking at here: the DBS Altitude Visa, and the DBS Women’s World Mastercard.
I’ve tabled some of the major bank cards that earn miles, their total foreign currency transaction fee and the effective cost per mile as a result:
|Credit Card||Foreign currency fee||Mile earn rate||Effective cost of buying miles|
|DBS Altitude Visa||3.25%||2 mpd (for foreign spend)|
3 mpd (for online hotel & airline spend)
|1.63 cent per mile (cpm)|
|DBS Women’s World Mastercard||3.25%||4 mpd (for online foreign spend)||0.81 cpm|
|OCBC 90N||3%||4 mpd (until 29 Feb 20)||0.75 cpm|
|OCBC VOYAGE||3%||2.4 mpd (until 31 Dec 19, 2.3 thereafter)||1.25 cpm|
|UOB Signature Visa||3.1%||4 mpd (min $1,000 max $2,000 spend per statement)||0.78 cpm|
|UOB PRVI Miles Visa/Mastercard||3.25%||2.4 mpd||1.35 cpm|
|BOC Elite Miles Mastercard||3%||3 mpd||1 cpm|
|Citi PremierMiles Visa||3%||2 mpd||1.5 cpm|
|Citi Prestige Mastercard||3%||2 mpd||1.5 cpm|
|Standard Chartered Visa Infinite||3.5%||3 mpd (min $2,000 spend per statement)||1.17 cpm|
Every bank seemed to have raised their foreign currency transaction fees in the last year or so, and DBS has done it not once, but twice. Unfortunately we are at the mercy of the banks given that they are the one ultimately providing the service and the miles, so we can only choose wisely.
If you are holding the OCBC 90N card and travelling frequently over the next couple of months, that is your best bet in raking up the most number of points for now.