Don't get overcharged for international spending: A guide to foreign transaction fees and offers

Whether you're traveling abroad for leisure or business, or shopping on international websites, making seamless overseas payments only requires one card. However, the myriad of foreign transaction fees and exchange rate calculations can often be confusing. Want to be smarter and save more when spending in foreign currencies? This article will break down the transaction terms and compare various overseas spending offers to help you easily manage costs.

‍

Two main types of overseas spending explained

‍

In-person foreign currency or HKD transactions

This refers to making card payments at physical merchants abroad, such as dining at a restaurant in Tokyo or shopping at a shoe store in London. You can choose to pay in the local currency (foreign currency) or Hong Kong dollars (DCC Dynamic Currency Conversion) at checkout.

‍

Online cross-border transactions

Transactions made with international online merchants not registered in Hong Kong are considered overseas spending, even if you are in Hong Kong. Examples include subscribing to overseas streaming platforms or shopping on Amazon US. These online cross-border transactions typically incur foreign transaction fees.

‍

Which card for overseas spending? Look for these 3 key points

‍

Understand foreign transaction fees and exchange rates

Foreign transaction fees usually consist of two parts: fees charged by the card network (e.g., Visa/Mastercard) (approx. 1%) and fees charged by the issuing bank (approx. 0.95% - 2%). Also, be aware of DCC (Dynamic Currency Conversion) charges – if you pay in HKD, the exchange rate used by the merchant is often very unfavorable, significantly higher than the cost of paying directly in foreign currency.

‍

Check pre-authorization and refund policies

When booking hotels or car rentals, merchants typically place a "pre-authorization" on your credit card to temporarily hold a certain amount. Additionally, if a refund is needed, the foreign currency refund process, exchange rate calculation, and whether paid fees can be refunded vary depending on the bank's policy.

‍

Confirm transaction security and regional compatibility

Ensure your card has robust security features (e.g., real-time transaction notifications) and understand whether the card network (Visa/Mastercard/JCB, etc.) supports foreign currency in that region to ensure successful transactions.

‍

Comprehensive guide to personal overseas foreign currency transaction fees/offers

‍

JCB Overseas Transaction Fees

JCB's fee policy depends on the individual issuing bank; for example, some banks waive transaction fees for spending in Japan. For businesses, the Wonder Card (JCB) business card solution offers a clear fee structure: local and international transaction fees are waived, but a 1.5% foreign exchange conversion fee is charged for international transactions.

‍

Visa Overseas Transaction Fees

Visa cards are a mainstream choice in Hong Kong, with standard overseas transaction fees generally around 1.95%.

‍

Mastercard Overseas Transaction Fees

Similar to Visa, Mastercard's standard overseas transaction fees are also generally 1.95%, making it one of the standard charges in the market.

‍

UnionPay Overseas Transaction Fees

The biggest advantage of UnionPay cards is that foreign currency transaction fees are generally waived. However, it's important to note that a small number of UnionPay cards issued by Hong Kong banks still charge a fee of approximately 1% to 1.2%. Therefore, it's best to confirm with your issuing bank before use.

‍

Overseas Foreign Currency Spending Fee Structure

Most Hong Kong credit cards have a total foreign currency transaction fee of approximately 1.95%. Therefore, choosing a card with overseas spending benefits exceeding 1.95% can offset the fees and even lead to net rewards.

‍

Common types of overseas spending offers

• • Cash rebates: Rebates are usually applied directly to your statement, while some convert points back into cash or gifts.
• • Air miles: Earn more air miles through foreign currency spending.
• • Airport lounge access: Some credit cards offer complimentary airport lounge access.
• • Fee waivers: A few cards specifically offer waived overseas transaction fees, or effectively waive them through high rebates.

‍

Can personal credit cards be used for company overseas spending?

Many SME owners or employees use personal cards to cover company expenses, such as flights and hotels for overseas business trips, or payments to foreign suppliers or online advertising. While this approach is simple and direct, it can lead to several management issues in the long run.

‍

Firstly, separating business and personal accounts can be confusing, requiring finance teams to spend extra time categorizing and reconciling, increasing the risk of errors. Secondly, the expense claim process is often cumbersome, requiring employees to keep receipts and submit forms, making it difficult for the company to track budget usage in a timely manner. Moreover, personal credit card limits may not be sufficient for large expenses and could even impact an employee's personal finances.

‍

Therefore, while personal credit cards can be used for company overseas spending, it's not ideal. Businesses are better suited to corporate payment solutions with backend management, spending limits, and multi-currency capabilities to enhance financial transparency and overall operational efficiency.

‍

Wonder Card for overseas spending: A more flexible choice for business international payments

For businesses, expense management and cost control are far more important than individual rewards. The Wonder Card business card solution is designed for Hong Kong businesses, created specifically for corporate overseas spending.

‍

Global business travel perks, exclusive concierge services, and offers

Wonder Card (JCB) provides a range of business travel benefits for companies, such as complimentary airport lounge access and dedicated concierge services, enhancing the business trip experience while enjoying overseas spending offers.

‍

7-minute instant card issuance, no long approval waits

Say goodbye to the complicated traditional bank application process for corporate cards. Businesses can complete online account opening in as little as 7 minutes, instantly issuing virtual and physical cards to employees to meet urgent foreign currency spending needs.

‍

Centralized expense management, real-time tracking of every transaction

Manage business expenses centrally through the Wonder App and Dashboard, synchronize Wonder Card transaction records, streamline financial processes, and flexibly and precisely allocate corporate funds.

Real-time transaction alerts, one-stop control of corporate spending

Managers can set individual spending limits for each card, with real-time notifications for all transactions. Combined with a powerful management backend, the finance department can track and analyze all overseas spending in one place, eliminating the need to process cumbersome expense reports.

‍

Supports multi-currency transactions, saving more on fees than HKD transactions

Wonder Card supports multi-currency transactions, offering highly competitive exchange rates and a clear, transparent fee structure. Compared to using DCC (HKD settlement) or traditional bank cards, it can more effectively save on overseas transaction fees, genuinely reducing operational costs for businesses.

‍