Any Way to Avoid the Forex Transaction Charge?

[CarbonMan]

That reassures me that they have no plans to begin forcing me to pay in a foreign currency.

Indeed, currency risks should be borne by SQ. Their Finance Dept should have hedges in place to keep their currency fluctuations in check.

Credit cards do extract significant revenues through our foreign currency expenditure. That's why some of them "generously" give out extra miles if we use the card overseas. As with the setting of borrowing/lending rates, I do think that exchange rates need to be regulated. There are a good number of cards that does a double exchange for cross rates. For instance if your card is based on SGD and you charged the expense in EUR, what they will do is convert to EUR to USD and then from USD to SGD. With the kind of wide spreads you see on the buy/sell currency ranges, they can pluck quite a healthy revenue from these services, on top of the charges they levy on the vendor.

It is therefore my practice when I go on vacation to carry as much foreign cash as I deem safe (change at Raffles Place) to pay for my big-ticket items like hotel and restaurants. Of course, one has to know and understand the risks and the inconvenience of carrying a significant amount of cash. I haven't done any specific comparisons but I would estimate that one can save at least 3-5%. IMHO.

[SQ228]

There are a good number of cards that does a double exchange for cross rates. For instance if your card is based on SGD and you charged the expense in EUR, what they will do is convert to EUR to USD and then from USD to SGD. With the kind of wide spreads you see on the buy/sell currency ranges, they can pluck quite a healthy revenue from these services, on top of the charges they levy on the vendor.

Agreed! The biggest scam I have learnt never to be part of are the merchant terminals that offer for you to pay in your home currency. It gives the sense that you'll avoid all the currency conversion fees and get a good deal but the margins added to these amounts can be up to 20% I have found.

I always pay in the local currency on my visa card. My credit union only charges 1.5% for currency conversion which is usually done at the listed rate for the day, not at buying or selling cash rates. I get the same deal doing Visa withdrawals at ATMs with only a 2.50 AUD fee per withdrawal.

[orsetto]

I'm accessing the SQ website stateside and don't see any option to change currency but fares are in the currency of flight origin. The only thing related to currency/forex is the disclaimer:

"Conversions are for reference purposes only. Final billing will be made as per the ticketing currency, and your bank will undertake any conversions."


When I book via call centre, I am always quoted, and I assume charged, in SGD. My bank statement only lists the converted amount. Not sure what the SGD-USD rate was 45 days ago but just calculated now and seems like I got better than the published exchange rate.

Credit cards do extract significant revenues through our foreign currency expenditure. That's why some of them "generously" give out extra miles if we use the card overseas.

I wish US banks gave out extra for overseas use if they keep the current trend toward no forex fees. JP Morgan Chase in particular has quite a few cards without the fees, especially the travel-related cards.