Credit Cards

Credit Card Transaction Fees You Probably Don’t Know You’re Paying

hidden credit card transaction fees

When you get a credit card, you’ll also receive a book of terms and conditions. But you will need some legalese and time to get through them, and if you are like most credit card users, you probably would simply skip reading.

As a result, many of us would have no idea if they had just agreed to scrub the bank’s toilets for a year, let alone the exact fees that come with credit card usage.

 

1. Credit card transaction fees

Do you use your credit card overseas? Buy stuff online? Subscribe to foreign magazines?

Well, when you take a close look at your credit card statement, chances are, the invoices won’t match. The difference will probably be listed as a single heading such as “foreign currency transaction”, and if you think that refers to the exchange rate, you’re going to be in for a big surprise.

Besides the currency difference, credit card companies have their own fees. Here’s an example of a breakdown of an overseas transaction, if you use the Standard Chartered Manhattan card:

  • Cross-Border Transaction Fee: 0.8%
  • Foreign Exchange Fee: 0.5%
  • MasterCard Fee: 1%
  • Total fee for overseas transaction: Approx. 2.3%

You may also want to check the policies with different banks. Use the wrong card, and you could end up paying twice the fees.

 

2. Overseas transaction fees

A Visa credit card imposes a transaction fee of 1%, when you make an overseas purchase. A MasterCard credit card imposes a fee of between 0.2%, to 1%. If you…

  • Convert the currency and buy outside Singapore, the charge is 1%
  • Convert the currency, but make the transaction in Singapore, the charge is 0.2%
  • Buy something overseas, but in Singapore dollars, the charge is 0.8%

A lot of banks just lump all the extra charges into one “you may be charged x% extra” statement in their terms and conditions on their credit card pages, so do make sure that you find out what exactly you are getting charged before, before happily going on some online shopping spree. Here are some examples from some other banks:

 

CIMB credit card transaction fees

  • Visa Card Transaction Fee – 1.0%
  • MasterCard Transaction Fee – 0.2% to 1%
  • Foreign Exchange Fee – 1.2%
  • Cross Border Transaction Fee – 0.8%

The total charges for using Visa (if you convert currency) would be around 2.2%. For transactions in Singapore dollars (but buying overseas), it would be around 1.8%.

For MasterCard, the amount will vary as described above.

UOB credit card transaction fees

  • Visa Card Transaction Fee – 1.0%
  • MasterCard Transaction Fee – 0.2% to 1%
  • Foreign Exchange Fee – 1.5%
  • Cross Border Transaction Fee – 0.8%
  • Amex Foreign Currency Fee – 3.25%

The total charges for using Visa (if you convert currency) would be around 2.5%. For transactions in Singapore dollars (but buying overseas), it would be around 1.8%.

For MasterCard, the amount will vary as described above.

Citibank credit card transaction fees

  • Visa Card Transaction Fee – 1.0%
  • MasterCard Transaction Fee – 0.2% to 1%
  • Foreign Exchange Fee – 1.5%
  • No Cross Border Transaction Fee

The total charges for using Visa (if you convert currency) would be around 2.5%.

For MasterCard, the amount will vary as described above.

 

3. The interest on “interest free” repayments

So you’re finally buying that giant Plasma TV. Congratulations. You may not even be worried about the cost, since your credit card has “interest free repayments“.

For the most part, that deal is true. Until you make so much as one slip-up.

Many credit cards reserve the right to bring back the standard 24% interest rate (in fact, most of them are much higher now), if you miss even one repayment. And you may not get an e-mail or phone call about it. So if you’ve ever made a late payment, I’d advise you to check the statements; you may have started paying interest on that “interest free” plan.

Have you ever paid hidden credit card fees? Comment and let us know about it!

 

Related Articles

What You Need to Know About the Annual Fees for Singapore’s Most Popular Credit Cards

0% Interest Instalment Payment Plans: What Your Bank Isn’t Telling You

5 Ways to Deal With Late Payment Fees on Your Credit Card

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Comments (3)

  1. great point and I started to realize why the credit card conversion rate is so bad.. Now it makes perfect sense with my CITI Bank card which is approx 3% higher than the bank rates. Sadly we have no option..

  2. Can you please provide source for this information? Thanks!

    1. Hello, not sure if you will be interested but I just collated and compared the overseas transaction fees on my blog. Can take a look for reference http://auntiegeri.tumblr.com/post/118289252562/credit-card-fees-on-transactions-processed-outside

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