Best credit card for overseas spending
Best credit card for overseas spending
The best credit card for overseas spending is one that is accepted by overseas merchants, rewards you generously for spending in foreign currency, offers a good exchange rate, has no extra transaction fees, and most importantly, is safe to use. Credit card spending has always been associated with overseas purchases, starting when American Airlines created the Air Travel Card for ticket transactions. Fast forward to today, credit cards are the first choice for overseas spending due to their acceptance worldwide.
With the rise of e-wallets in cross-border transactions and the long queues at major money exchanges, this article compares spending using credit cards versus e-wallets and cash. It examines various aspects, such as rewards, cashback, merchant acceptance, exchange rates, and other factors.
Rewarding from your overseas transactions
Banks and issuers typically reward higher loyalty points for overseas transactions, as they benefit from exchange rate markups, dynamic currency conversion, and other administrative fees. Additionally, cardholders tend to spend more on holidays for hotels, food, and other expenses, making attractive loyalty points an enticing way to earn air miles. This system is also a profitable business for banks.
Using the Duithub reward estimator, we highlight five credit cards that excel in overseas spending, making them excellent choices for international travelers.
i. Ambank Enrich Visa Infinite Credit Card
Ambank Enrich Visa Infinite Credit Card is the cobranded card between Malaysia Airline (Enrich frequent flyer loyalty program) and Ambank. The card rewards 1 Enrich points for every RM1 spend overseas (and airlines). Thus, it is the highest reward credit card in overseas spending from Malaysia issuers and only one that has more than 1 miles per Ringgit or equal. By referring to our previous valuation of Enrich Miles value, this is definitely the best option for cardholders that want to maximise reward when shop overseas.
On top of that, the card also rewards 10% off all year long for Malaysia Airlines flight tickets, unlimited access to Malaysia Airlines Golden Lounge at KLIA, 30% reduction in Enrich Elite Points requirement, and other travel benefits that you can get with the card.
Do note that this card has 1% foreign exchange conversion markup (admin fees) when you perform foreign currency transactions, with the exchange rate published by Ambank daily.
ii. UOB Prvi Miles Elite Credit Card
UOB Prvi Miles Elite Credit Card is affluent Mastercard credit card issued by UOB Bank. Cardholders earn 10X UNIRM on every Ringgit overseas spending. With the recent revision of the point transfer rate, 12,000 UNIRM would get you 1,000 Enrich Points, which is equal to 0.83 miles per Ringgit spend.
This card just needs you to have any 3 oversea spending receipts for you to get complimentary ride from airport to home, after your overseas travel using the credit card. Cardholders also entitled to 8x complimentary airport lounge access with option to tonnes of lounge around Asia Pacific, such as Plaza Premium Lounge, Travel Club Lounge and etc.
Similarly, this card also subjected to 1% foreign exchange conversion markup (admin fees) when you perform foreign currency transactions, with the exchange rate published by UOB bank daily. Do note that the card also comes with annual fee of RM600 so be sure to do the calculations before your travel.
iii. UOB Visa Infinite Credit Card
UOB Visa Infinite Credit Card is another affluent Visa credit card issued by UOB Bank. Cardholders earn 10X UNIRM on every Ringgit overseas spending. With the recent revision of the point transfer rate, 12,000 UNIRM would get you 1,000 Enrich Points, which is equal to 0.83 miles per Ringgit spend.
On top of that, you get complimentary ride to KLIA or KLIA2 when you spend RM5,000 in the last 30 days before your trip. Cardholders also entitled to 12x complimentary airport lounge access (4x more than UOB Prvi Miles Elite credit card) with option to tones of lounge around Asia Pacific, such as Plaza Premium Lounge, Travel Club Lounge and etc. If you’re traveling to Bangkok, this card also gets you into UOB Infinite Private Lounge located at EmQuartier Mall.
Similarly, this card also subjected to 1% foreign exchange conversion markup (admin fees) when you perform foreign currency transactions, with the exchange rate published by UOB bank daily.
iv. AFFIN INVIKTA Visa Infinite Credit Card
AFFIN INVIKTA Visa Infinite Credit Card is one rare mention as it is issued by a rather smaller issuer. For every Ringgit of spending overseas, you get 5x AFFIN reward points, and for every 6,000 reward points, you receive 1,000 Enrich points. This is equal to 0.83 miles per Ringgit spend as well, putting them in the similar rate with UOB Prvi Miles Elite and UOB Visa Infinite credit cards.
This affluent card also rewards cardholders with 12x complimentary access to Plaza Premium Lounge in Malaysia. And yes, this card also subjected to 1% foreign exchange conversion markup.
v. CIMB Travel World Elite Credit Card
Compared to the above 4 cards that reward 0.83-1.00 miles per Ringgit, CIMB Travel World Elite credit card only comes with 0.8 miles per Ringgit for overseas spending. However, the one selling point for the card is where the 1% foreign exchange conversion markup fees are waived, which means that if you’re spending tremendously overseas, this is the card that you should pay attention to. For dynamic currency conversion (means you’re paying using Ringgit even though you’re at overseas), the conversion rate is generally higher, thus please remember to pay in foreign currency to get not just the lower conversion rates but also at the same time benefit from the waiver of the services fees above.
Besides that, it is the only card here that provide access to Plaza Premium First, the higher end of the Plaza Premium lounge services. With a decent travel insurances and complimentary inflight data, data roaming and other travel related benefit, this is the ultimate card for foreign spending.
Just that the card has a RM1,200 and only can be 100% waive if you spend RM240,000 per year which means that it would be very hard for you to get it waive.
Overseas exchange rate and transaction fee
While overseas spending may have great rewards, but considered that it involving exchange of foreign currency and exchange rate mark up, the question arise is if spending using credit card is still the best choice, compared to using Wise debit card or cash directly. This is because at the end of the day, that is no point the credit card rewarding well but cardholders need to indirectly spending more due to the extra fees.
Let’s use a very simple example, you’re traveling to Singapore and purchase an item worth 1,000 Dollar on 14 of Oct 2024, and let’s assume that you’re paying in foreign currency, and calculate how much you need to pay in Ringgit and if the reward can cover the “lost”.
Scenario 1 – Using Ambank Enrich Visa Infinite credit card
For Visa credit card, the exchange rate is 1 SGD to 3.328 after 1% markup, so the total in Ringgit is RM3,328. This transaction also earns 1,000 Enrich points, and if we value each point at RM 0.087, then the earning would be RM 87. So, the total paid minus the reward would be RM 3,241.
Scenario 2 – Using Wise debit card
For Wise debit card, the exchange rate is 1 SGD to 3.2870, which is much better than Ambank Enrich Visa Infinite credit card, but Wise debit card also charge a 0.53% (or less) fee which then make overall amount to pay is RM3,304. This is RM 63 more than using Ambank Enrich Visa Infinite credit card.
Scenario 3 – Using Singapore Dollar directly which you exchange at local money changer before you travel.
Max Money money changer Mid Valley Megamall is doing a 1 SGD equal to RM3,280 rate, which is the best among the 3 scenarios, however, without the reward that you can get from spending on credit card, the total need to be paid is RM 3,280, putting them RM39 more than Ambank Enrich Visa Infinite credit card.
The key takeaway shows that using credit card might be the winner here, and with the convenience and benefits from the credit card, it might be good to just go ahead with the card since most of the merchants are receiving the international credit card scheme of either Visa or Mastercard.
The comparison above is just a very high-level comparison, given that the exchange rate is always fluctuating, if you able to get the best rate before your travel, using cash might be good option, because if someone able to get 1 SGD = RM3,200 for example few months before the travel, he or she would turns out the “winner” from the above analysis, but do note although using cash is an option in all the merchants, but carrying notes may not be the most convenience way of travel.
Overseas activation
For most of the credit cards, you don’t need to activate the overseas usage with the issuers, compared to how you may do it for debit card, as the credit card is accepted worldwide.
Summary
The summary here is use the credit card to spend in overseas if getting reward from the credit card spending is something you’re preferring, else you should find other sources to get cheaper exchange rate as credit card spender are deal with high exchange rate markup, and if the spendings are not compensated by the air miles or other rewards, you’re losing in the long run. Other than reward, frequent flyer should look into the perks in the form of travel insurances, lounge access, complimentary airport rides, and other travel related benefit from the credit card, where they can enhance the travel experience. We hope this article can help you to make decision in choosing the best payment method when you’re traveling abroad.