Credit Cards, Loyalty
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DBS raises foreign currency transaction fee to 3.25%

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 CardForeign currency feeMile earn rateEffective cost of buying miles
DBS Altitude Visa3.25%2 mpd (for foreign spend)
3 mpd (for online hotel & airline spend)
1.63 cent per mile (cpm)
1.08 cpm
DBS Women’s World Mastercard3.25%4 mpd (for online foreign spend)0.81 cpm
OCBC 90N3%4 mpd (until 29 Feb 20)0.75 cpm
OCBC VOYAGE3%2.4 mpd (until 31 Dec 19, 2.3 thereafter)1.25 cpm
UOB Signature Visa3.1%4 mpd (min $1,000 max $2,000 spend per statement)0.78 cpm
UOB PRVI Miles Visa/Mastercard3.25%2.4 mpd1.35 cpm
BOC Elite Miles Mastercard3%3 mpd1 cpm
Citi PremierMiles Visa3%2 mpd1.5 cpm
Citi Prestige Mastercard3%2 mpd1.5 cpm
Standard Chartered Visa Infinite3.5%3 mpd (min $2,000 spend per statement)1.17 cpm

Final thoughts

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.

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