You will be able to find the cost of overseas and online foreign currency spending on your statement.
Shu Ting came back from a week in Tokyo and checked her card statement against her budget. Every purchase was there, converted to Singapore dollars. But the totals were higher than the amounts she'd worked out on her phone's currency app at the time, and in a few places there was an extra line she didn't recognise. One shop had also asked her, at the till, whether she wanted to pay in yen or Singapore dollars. She had picked Singapore dollars because it seemed easier.
Spending in a foreign currency has costs that don't show up as a price. They're built into the exchange rate or added as small separate lines. This lesson shows you how to find them on your statement and work out what you actually paid.
When you pay in a foreign currency, two things happen. The card network, such as Visa or Mastercard, converts the amount into Singapore dollars at its exchange rate for that day. Then your bank adds its own fee, a percentage of the converted amount, for handling a foreign currency transaction.
Banks show this in one of two ways. Some show the fee as a separate line, often labelled as a foreign transaction or foreign currency fee. Others fold it into the converted amount, so the Singapore dollar figure on the purchase line already includes it. Either way, you pay it. Your card's terms say which method your bank uses, and its fee schedule gives the current percentage.
Each foreign transaction on the statement usually shows the original foreign amount as well as the Singapore dollar amount. That's what lets you check the cost yourself.
The method is simple. Divide the total Singapore dollars you were charged, including any separate fee line, by the foreign amount. That's your effective rate. Then compare it with a reference rate for the same day. The card networks publish their exchange rates on their websites, and that's a fair benchmark.
Here's one of Shu Ting's transactions, with a rate and fee made up for the example. She spent 12,000 yen at a restaurant. The statement converted it at S$0.0091 per yen, giving S$109.20, and a separate fee line of S$3.55 appeared beside it. Her total was S$112.75. Divided by 12,000, that's about S$0.00940 per yen. Compared with the S$0.0091 network rate, she paid about 3.25% more, which is exactly the bank's fee in this example.
On a single dinner it's a few dollars. Across a trip, or across years of online shopping in foreign currencies, it adds up, and it's worth knowing the number.
At that one shop, the card terminal offered to charge her in Singapore dollars. This is dynamic currency conversion, often shortened to DCC. The merchant, or its payment provider, does the conversion at the till, at a rate it chooses, and shows you the Singapore dollar amount before you pay.
It feels helpful because you see the final figure in a currency you understand. The catch is the rate. The merchant's rate usually includes a margin that is larger than what the card network and your bank would have charged together.
Here's the example. Her purchase was 20,000 yen, and the terminal offered S$191.00. Paying in yen instead, at the example network rate of S$0.0091 plus the 3.25% fee, would have cost about S$187.92. So choosing Singapore dollars at the till cost her about S$3.08 more, an effective rate of S$0.00955 per yen, nearly 5% above the network rate. And some banks still charge their foreign transaction fee on a DCC payment, because it was processed overseas, which would add to the gap.
When a terminal or a website abroad offers you the choice, the local currency is usually the cheaper answer. If a shop has already processed it in Singapore dollars without asking, you can ask for it to be redone in the local currency before you sign.
Shu Ting's statement had one more surprise, from home. An online purchase priced at S$45.00 had a small fee line beside it, even though she had paid in Singapore dollars and never left the country.
Some merchants that sell in Singapore dollars process their payments outside Singapore. Many banks treat these as overseas transactions and charge a fee, even though no currency was converted. The card's terms usually describe this, sometimes as a fee on transactions processed overseas. It's easy to miss, because the purchase price is exactly what you expected and the fee sits on its own line.
You can't always tell in advance where a merchant processes payments. The statement shows it after the fact, through the extra line. If a regular subscription or online shop keeps triggering it, you'll find it on your statements month after month.
For each foreign currency transaction, the check takes a minute: find the foreign amount, add up the Singapore dollar amount and any fee line, divide, and compare with the network's rate for that date. For any transaction in Singapore dollars with a fee beside it, note the merchant.
Shu Ting checked five transactions from the trip, and the DCC purchase came out as the most expensive per dollar. If one of your own transactions went through DCC, it's the most useful one to include when you try this yourself.
Pick three foreign currency transactions from your statements and calculate the effective rate and total fee for each.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).