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46 replies to this topic | 165 praises

#1

Posted 20 October 2015 - 05:35 PM

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When you use your credit card buying something oversea, sometimes the merchant will ask do you want to charge in SGD or the local currency.
Which is better??

#2

Posted 20 October 2015 - 05:54 PM

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When you use your credit card buying something oversea, sometimes the merchant will ask do you want to charge in SGD or the local currency.
Which is better??

 

Be it online or shopping while on tour, always go for charging in the local currency of the country.

 

Charging in SGD for online shopping for sites located in overseas, the rates they used are always higher compare to the credit bank is charging.

 

While traveling, charging in SGD means the system will go thru currency conversion twice which means you will be likely be paying more conversion fees and the rates is normally higher.


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#3

Posted 20 October 2015 - 05:55 PM

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When you use your credit card buying something oversea, sometimes the merchant will ask do you want to charge in SGD or the local currency.
Which is better??

 

In general, I think local currency better cos your credit card bank will use their rate to convert to SGD whereas if charge in SGD, the merchant will likely use their own rate which is normally worse.

 

That said, there could be exceptions so you could do a quick calculation to see which is better. Credit card bank will normally be 150-200 points away from interbank rate eg. if USD/SGD interbank rate is 1.40, credit card bank will be around 1.4150 to 1.42 thereabouts. Then, compare with the merchant rate and you should be able to determine which is better.

 

One disclaimer though is that merchant rate used is final whereas credit card bank rate may not be the current rate as it will only be determined when it's presented by merchant for payment which could work for or against you. 

 

Quite complicated hor......



#4

Posted 20 October 2015 - 06:36 PM

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http://www.dbs.com.s...rates-fees.page

I found this on DBS website.
If charge in local currency, charges 2.5% above visa foreign exchange rates for visa /master. Amex pay 3%.
If charge in SGD, we pay 0.8% above foreign exchange rates set by merchant bank on that day.
Means paying in SGD still cheaper. If my interpretation is correct.
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#5

Posted 20 October 2015 - 07:25 PM

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http://www.dbs.com.s...rates-fees.page

I found this on DBS website.
If charge in local currency, charges 2.5% above visa foreign exchange rates for visa /master. Amex pay 3%.
If charge in SGD, we pay 0.8% above foreign exchange rates set by merchant bank on that day.
Means paying in SGD still cheaper. If my interpretation is correct.

 

Good info above!!!

 

however, I feel really hard to say which will be lower in the end as we won't know what will be the visa foreign exchange rates or the foreign exchange rates set by merchant bank.


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#6

Posted 20 October 2015 - 08:23 PM

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Nowsadays i juz pay full cash or use ATM to withdraw. Cheaper than using CC.

 


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#7

Posted 20 October 2015 - 09:36 PM

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Nowsadays i juz pay full cash or use ATM to withdraw. Cheaper than using CC.

ya I try not to use credit card when overseas unless there is a need too , the bank will sure earn from the exchange rate spread be it converting the bill to sg or local currency.  save the hassle and to avoid fraud  just use cash.



#8

Posted 20 October 2015 - 10:47 PM

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reckon it's nearby country like MY?

 

I will use Maybank CC and pay in MYR.

 

http://www.dbs.com.s...rates-fees.page

I found this on DBS website.
If charge in local currency, charges 2.5% above visa foreign exchange rates for visa /master. Amex pay 3%.
If charge in SGD, we pay 0.8% above foreign exchange rates set by merchant bank on that day.
Means paying in SGD still cheaper. If my interpretation is correct.

 



#9

Posted 20 October 2015 - 11:07 PM

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I think the charges and rates they use are really not good.

 

So prefer to use cash if possible.

 

Recall some years back there was some class action in US against Visa or Master re their charges and exchange rates or something.


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"old dog, new tricks ..."

#10

Posted 20 October 2015 - 11:53 PM

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One thing to note is that if you use a credit card that has extra rewards for foreign currency transactions, it seems that this benefit goes away if you convert it to Singapore dollars at the point of purchase.

#11

Posted 21 October 2015 - 12:01 AM

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Maybe this will help explain ...

https://en.m.wikiped...ency_conversion

#12

Posted 21 October 2015 - 02:14 AM

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When you use your credit card buying something oversea, sometimes the merchant will ask do you want to charge in SGD or the local currency.
Which is better??

Always use the foreign currency option. Never opt for home currency.

Why? Bec the bank providing the card swiping terminals have appointed a DCC provider to enable a home currency to be offered as an "option". Knowing human psychology, being told the exact amount in your home currency always feels more comfortable than opting for the foreign currency option and not knowing the exact amount.

But if you're in China, use AMEX. Why? Because in China, 99% of terminals have been rigged to charge you in your home currency regardless of what you choose if your card is Visa or Mastercard.

AMEX owns the entire payment network so there is no way a bank can hijack the transaction. VISA and MC allows its partners to hijack the transaction.

DCC (Home Currency) rates are always higher bec they take the wholesale Visa/ Mastercard spot rate and tag on 4% to 5% more so the eventual rate will be higher than even AMEX. The 4-5% that you get carroted for will be split between the shopkeeper,the shopkeeper bank that provides the card swiping terminal and the company providing the DCC service.

Now if you get charged in your home currency, the bank that issued you the credit card loses the commission it'd have otherwise earned so now if your card transaction is processed by an overseas terminal in SGD, you will be charged an additional fee.

I kenna DCC in Hong Kong Airport shop (Relay) although I chose HKD. So beware of Relay.

#13

Posted 21 October 2015 - 10:05 AM

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I use SGD. Why?

Easier to do my expenses claim.

Otherwise, I will have to wait for my cc statement to come before I could claim the correct amount. Or use internal rate which I might be subsidizing my company.

Finance dept also save time. Need not verify the rate I use. Just look at the charge slip. 



#14

Posted 21 October 2015 - 10:30 AM

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Always use the foreign currency option. Never opt for home currency.

Why? Bec the bank providing the card swiping terminals have appointed a DCC provider to enable a home currency to be offered as an "option". Knowing human psychology, being told the exact amount in your home currency always feels more comfortable than opting for the foreign currency option and not knowing the exact amount.

But if you're in China, use AMEX. Why? Because in China, 99% of terminals have been rigged to charge you in your home currency regardless of what you choose if your card is Visa or Mastercard.

AMEX owns the entire payment network so there is no way a bank can hijack the transaction. VISA and MC allows its partners to hijack the transaction.

DCC (Home Currency) rates are always higher bec they take the wholesale Visa/ Mastercard spot rate and tag on 4% to 5% more so the eventual rate will be higher than even AMEX. The 4-5% that you get carroted for will be split between the shopkeeper,the shopkeeper bank that provides the card swiping terminal and the company providing the DCC service.

Now if you get charged in your home currency, the bank that issued you the credit card loses the commission it'd have otherwise earned so now if your card transaction is processed by an overseas terminal in SGD, you will be charged an additional fee.

I kenna DCC in Hong Kong Airport shop (Relay) although I chose HKD. So beware of Relay.

 

Thanks. Great info there.

I'd still use CC for big things like the hotel stay as i'd rather not get targeted by pickpockets or snatch thief.

 

These misc charges i just count it as part of the travelling cost.



#15

Posted 21 October 2015 - 10:46 AM

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Local currency. I've tried both and found out conversion rate is higher when they convert for you in the store/hotel.



#16

Posted 21 October 2015 - 11:26 AM

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Thanks. Great info there.

I'd still use CC for big things like the hotel stay as i'd rather not get targeted by pickpockets or snatch thief.

 

These misc charges i just count it as part of the travelling cost.

I actually try to use CC for everything, local and overseas. I go after air miles. Unless the currency is really going to appreciate sharply against the SGD, I will use cards.

 

Partly for security reasons, partly there are cards for that allows me to earn 4 miles (I value 1 air mile at 2 cents) and they more than compensate for the 3% difference if I had used cash.

 

I don't carry my usual wallet when I am overseas (including Vietnam).

 

Just the couple of cards I want to use and some buffer cash, all in different pockets/ socks. When I travel, I do have an old dummy wallet in my bag though as a "red herring". (excluding Vietnam)



#17

Posted 21 October 2015 - 11:38 AM

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I actually try to use CC for everything, local and overseas. I go after air miles. Unless the currency is really going to appreciate sharply against the SGD, I will use cards.

 

Partly for security reasons, partly there are cards for that allows me to earn 4 miles (I value 1 air mile at 2 cents) and they more than compensate for the 3% difference if I had used cash.

 

I don't carry my usual wallet when I am overseas (including Vietnam).

 

Just the couple of cards I want to use and some buffer cash, all in different pockets/ socks. When I travel, I do have an old dummy wallet in my bag though as a "red herring". (excluding Vietnam)

 

Ha you guys always travelling or on the move.

I don't travel much.

This year haven't even crossed the causeway haha.

 

2010 - Japan

2011 - NZ

2012 - nil

2013 - nil

2014 - Bali, Malaysia, Australia (some kind of record as i've hardly even traveled twice a year before)

2015 - nil

[lipsrsealed]

 

Gosh, hope my kid grows up faster. 


Edited by Lala81, 21 October 2015 - 11:41 AM.


#18

Posted 21 October 2015 - 11:44 AM

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Sabian, actually I cut and paste your forum post to my parents who are going china this week.

 

So this is my dad's reply,

 

 


I always use cash! Or if need to charge,use BOC UnionPay. Always RMB, convert to day,they charge.

 

Will this kana the DCC thing also? For benefit of china travellers. Cos i avoid going china hahaha...

 

 


Edited by Lala81, 21 October 2015 - 11:45 AM.


#19

Posted 21 October 2015 - 11:53 AM

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Similarly to India, Amex is not widely accepted, a lot of restaurants would not accept it

For shopping and makan, change cash for use is more useful

If go those wholesale market, they will only take cash

For hotel, just use credit card

Above for China
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#20

Posted 21 October 2015 - 12:17 PM

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Sabian, actually I cut and paste your forum post to my parents who are going china this week.

 

So this is my dad's reply,

 

 

 

Will this kana the DCC thing also? For benefit of china travellers. Cos i avoid going china hahaha...

 

I have not come across DCC cases on China Union Pay (CUP) Cards so far, it's only on VISA and MasterCard.

 

Not saying that it won't happen in future but I guess the DCC companies are just following the money trail --> Foreigners who need cross currency conversion (China tourist are a recent phenomenon - going by banking timeline) tend to be from outside China going into the country and holding the 2 most popular cards (VISA & MC). Somewhat like why PCs are virus magnets while almost nobody bothers to come with a virus for Mac.

 

If your Dad doesn't chase miles nor cash rebates and ins't on company expense, cash is the way to go. I know ICBC and BOC in Singapore issues a dual currency credit card so you use the card to pay in Yuan and then deposit Yuan at the Singapore Branch to make payment for the card purchases.

 

Is your Dad holding this card?

http://www.bankofchi...23_4521831.html




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