The best credit cards for overseas travel spending

Note: this post is specific to Singapore. Feel free to browse my other articles if you’re a visitor from the other corners of the world 🙂 

For all my past trips, I have been using the Manhattan credit card for overseas spending, the reason being it rewarded 5% cashback. Subsequently, it was cut to 3%, and I continued using it for overseas spending since I was lazy to find out if there was a better alternative.

Things have changed with the introduction of the ANZ optimum card. It rewards 5% cashback on dining and hotel spending. Before I continue, let me state the disclaimer again that, other than being a regular customer, I am in no way affiliated with any bank mentioned in this article.

Alright, let’s first discuss the transaction fees involved in cross-border transactions. As of now (July 2015), the published cross-border transaction fee for the ANZ optimum card is 2.5%, comprising of 1.5% that ANZ charges and 1% that MasterCard charges. For the SCB Manhattan card, it is 2.5% plus a variable rate of 0.2% to 1% that SCB claims MasterCard charges. It looks like ANZ fixes the MasterCard fee at 1% even though in actual fact it could be a variable rate that is possibly lower than 1%. Nevertheless, the fee charged by ANZ is obviously still the lower of the two. If you consider the cash rebate, the 3% you get from Manhattan is not even enough to cover the transaction fee which is 2.7-3.5%. On the other hand, the 5% you get from ANZ covers the 2.5% fee, and leaves you with another 2.5% to offset the currency exchange premium. Clearly the ANZ optimum card is far better.

Before embarking on my trip, i called up ANZ to find out if paying for hotel stays qualify for the 5% cash rebate. The answer was affirmative. With that, i was set on using the ANZ optimum card for the trip. Afterall, the major expenses incurred while travelling are on hotel stays and meals.

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Towards the end of my trip, a statement cycle had lapsed and i received the bill from ANZ. I earned $258 in cashback, not bad! The Manhattan card has a cap of $200 in cashback per quarter, whereas there is no cap for the ANZ card.

The other major category of spending on an overseas trip is of course shopping. The card I chose to use for shopping was the M1 Citibank card. This card offers a 5% cash rebate if you chalk up over S$3000 of retail purchase in foreign currency within one statement cycle, capped at S$200 (i.e. up to S$4000 spending). That is easy to achieve when you visit Japan (cosmetics), USA (outlet branded goods) or Europe (branded goods). Otherwise, if your spending is under S$3000, you only get a 1% rebate. The rebate comes in the form of Citi Rebate, which you can only redeem by spending at participating merchant stores. Well, the merchants do include supermarkets such as Cold Storage, Giant and Sheng Siong, so it’s as good as cash. By the way, you don’t have to be an M1 customer to apply for the M1 Citibank card.

Update 19/11/15: There is another card that bests the M1 Citibank card – UOB Visa Signature card. You earn 5% rebate with just a minimum of S$1000 worth of foreign currency spend, INCLUDING online spending in foreign currency! The cashback is capped at $100 per month, which allows one to spend up to the equivalent of S$2000 in foreign currency per month. In fact, you have to accumulate S$2000 worth of spending in order to do a cash credit redemption (UNI$4000). It is easy to spend S$2000 when overseas. Just charge the shopping, admission tickets and rental car etc. to the card. If these don’t make up S$2000, then charge your hotel bills and meals too. Here’s a tip: if you use Agoda for hotel booking, then you should definitely use the UOB Visa Signature for payment to get 5% rebate (be careful to choose USD or better still, the original foreign currency of the country of destination for the payment when you do the booking!). Online payments for hotel doesn’t count towards getting 5% cashback from the ANZ Optimum card.

Update 15 Apr 15: UOB Visa Signature test drive result.

Update 12 Apr 17

CIMB credit cards look pretty good for overseas food and hotel expenses, you get 10% rebate for up to S$600 worth of spending plus zero admin fees! I would use CIMB for the initial $600 worth of food and hotel expenses respectively, then switch to ANZ Optimum or UOB Visa Signature.

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