So you’ve done the research and applied for a whole bunch of credit cards in order to milk as many cash rebates, air miles and rewards points as you can. You’ve got one for groceries, one for online shopping, one for restaurant dining and one for buying useless items in shopping malls.
Then one fine day you finally get that overseas job you’ve been dreaming of.
Sayonara, suckers! But wait, does that mean you’ve got to abandon all your credit cards and start paying in… shudder… cash?
Nah, here are situations that might make it worthwhile to hang on to your Singapore credit card:
To get rewarded for online shopping
Depending on where your adopted country is, you might find that you’re still forced to pay in a third currency when you shop online. For instance, if you’re living in Australia, but still shop on US websites and get charged in USD, you’d get stuck with a bunch of fees for using an Aussie card, just as you would with a Singapore card.
You want to compare the various fees and charges imposed by your local and Singaporean banks and see which card is cheaper to use.
There are quite a few Singaporean cards which offer generous cash rebates for online shopping, so you want to take this into account when deciding which card to use. The tricky part is making sure you can satisfy their minimum spending requirements if any, and working out whether it will still be worthwhile.
Here are some notable cards:
- American Express True Cashback Card – 1.5% cashback on all purchases, no minimum spend (Best used only on online transactions in SGD or a third currency. As AMEX charges at least 2.5% in fees for overseas transactions, this isn’t recommended for IRL spending.)
- Bank of China Shop! Card – 6% cash rebate when you shop online or at Singapore department stores, provided you spend at least $1,000 per monthly bill. Maximum rebate of $100 per bill. (Due to the generous rebate, use this to shop online so long as you’re spending at least $1,000—consolidate your online shopping to achieve this if you have to.)
- CIMB Visa Signature – 10% cash rebate on online transactions in foreign currencies and F&B establishments if you spend a minimum of $500 in the statement month and make at least 8 transactions worth $30 or more.
To earn cash rebates
Some cards can be generous enough with their cash rebates that they can cancel out the extra charges you’d incur from using your Singapore card overseas.
In general, if you can get over 3% rebate on all spending, you can safely use the card without worrying about losing money to fees. If you intend to spend a lot of money on one card, it’s a good idea to find out exactly how much you’re being charged per transaction, just to be sure you’re at least breaking even.
Here are some cards you might want to consider—do note that you might also want to use these for online shopping.
- UOB One – Up to 3.33% rebate if you spend at least $500 a month for every month in a quarter, and up to 5% rebate if you spend at least $2,000 a month for every month in a quarter. (Good for online and IRL spending if you can hit the minimum spending every quarter.)
- CIMB Visa Infinite – 2% cashback on overseas spending, no minimum spend.
- Bank of China Family Card – 7% rebate on overseas and local dining, 5% on online purchases if you spend $500 in a statement month
- POSB Everyday Card – 5% cash rebate on overseas spending, minimum spending of $1,000 overseas spending in a month
But beware of hidden charges when using Singapore credit cards
If you wish, you can continue using your Singapore credit cards overseas, so long as you get your bank to activate your magnetic stripe for overseas use.
Once this is done, you’ll be able to use the card in the same way you use it in Singapore. But do you really want to? Well, that depends.
The main reason you might want to think twice about using your Singapore credit card overseas is the hidden charges. Each time you swipe that plastic, you’re being charged a bunch of fees, which might include the following:
- Foreign currency conversion fee
- Cross border transaction fee
- Visa/MasterCard fee
While the exact cost will differ from bank to bank and card to card, in general you are being charged about 2.5% to 3%, depending on the card you’re using—and that’s if you choose to transact in foreign currency. If they ask you if you would like the transaction to be made in Singapore dollars, refuse unless you want to pay fees of 3% to 5%.
For Singaporeans on holiday, it might make sense to continue using credit cards, because they don’t want to be carrying around a ton of cash, and they’d lose some money in the conversion process anyway if they were to exchange currencies at a money changer.
But when you’re earning money in the currency of your adopted country, it often doesn’t make sense to continue using your Singapore credit cards. If you spend $36,000 a year on your credit cards and pay fees of 2.5%, that adds up to $900 per year being lost needlessly.
Therefore, it only makes sense to continue using your credit cards in situations where you can get benefits, whether in the form of cashback, rewards points or air miles, that are worth as much as or more than the 2.5% to 3% you’d lose, or in situations where you wouldn’t benefit as much by using a local credit card.
You also want to consider that you might lose more money when you pay your credit card bills. Some Singaporeans on temporary overseas stints continue to pay their bills using savings in their local bank accounts, or wire money back to themselves in SGD, which will incur charges.
What about getting a card overseas?
If you’re going to be living in your host country for a while, you can start thinking of getting a local credit card.
Credit card culture really varies depending on where you’re living.
For instance, credit cards in the US tend to be a lot more generous when it comes to air miles, while credit cards in France generally give far fewer benefits than Singapore ones do. However, the one advantage is that you’ll be able to use them without having to pay fees for foreign currency transactions.
Different countries will have different requirements for credit card applicants, so when you can start to qualify for one really depends on your situation. Some overseas banks impose more stringent income requirements on foreign applicants, as do Singapore banks.
There might also be requirements pertaining to your visa or residency, so don’t think you can go applying for foreign credit cards when you’re on holiday. For instance, ANZ in Australia requires you to have at least 9 months remaining on your visa if you’re applying for a credit card as a non-PR.
Ultimately, whether you decide to use your Singapore credit cards, pay in cash or switch to using cards issued by banks in your host country really boils down to which is cheaper and gives you the most perks. The answer isn’t always that obvious, and also figuring out what you’re spending on could affect your choices. Comparing cards is easy though, and you can do that all in one place on MoneySmart’s Credit Card Comparison page.
2 fuss-free cashback cards with ongoing sign-up promotions include:
Do you use your Singapore credit cards overseas? Tell us why or why not in the comments!