Cross Currency Conversion fee: All you need to know

Aman Saxena
14.09.20
3 minute read

What is a Cross Currency Conversion fee?

A cross currency conversion fee is often used interchangeably with foreign transaction fees or foreign conversion fees. But it isn’t all the same. Let’s break it down from the top.

The cross-currency conversion fee pops up when you are spending using your debit or credit card in a currency that is not your card’s home currency.

So if you are shopping or traveling or paying for a meal in a different country and you tap or swipe your card, you can expect a cross currency conversion fee as a percentage of your transaction.

When you get your statement and it says a foreign transaction fee, that usually includes the cross currency conversion fee in it. As the name goes, the cross currency conversion fee is a charge to you for the transaction being in a different currency.

There can also be an additional amount added to it separately by the card company or bank for transactions conducted abroad. Both of these together make up the foreign transaction fee.

How does a Cross Currency Conversion fee work?

So the Cross Currency Conversion fee can sometimes hide in the foreign transaction fee. And you can also get an additional fee on top of the currency conversion fee when you pay using a debit or credit card abroad.

Let’s see what the fee looks like at some of the popular banks in Singapore:

BankCCY Conversion Fee
Citibank¹2.5%
OCBC²2.8%
DBS³2.65%
POSB⁴2.65%
UOB⁵3.25%

On top of this, you’ll have to watch out for another hidden fee in the exchange rate you get from the bank or the card company. Visa and Mastercard have a markup over the real exchange rate.

The real exchange rate is the exchange rates banks use themselves, and the one you find on Google or Reuters.

By setting their own exchange rates, Visa and Mastercard can sneak in an additional fee in the difference between the rate you get and the real exchange rate.

⚠️ Watch out, as most non-travel debit or credit cards have a feature where any foreign transactions are first converted into US dollars before converting into Singapore Dollars. That means you can get hit with the exchange rate fee twice!

How can I avoid foreign currency conversion fees?

It used to be that you couldn’t avoid foreign currency conversion fees. But that has changed with new features on travel cards and the growth of multi-currency cards.

There are travel prepaid, debit, or credit cards that center around not having any foreign transaction fees. So you can spend without getting the additional currency conversion fees.

But that doesn’t mean that you can still avoid the exchange rate hidden fee. Check with your provider to see how they determine the exchange rate you get.

Another way to avoid foreign currency conversion fees is to use a multi-currency card. A multi-currency card lets you load up on global currencies that you can spend like a local when you are abroad. Again, watch out for the exchange rate.

One of the best ways to save on a hidden exchange rate fee and the foreign currency conversion fee is to get a multi-currency card from Wise.

With Wise’s Multi-Currency card, you just pay a low fee to convert into one of 40+ different currencies available. Then when you pay or spend abroad, the respective currency gets drawn down from the amount you have on your card. It is that easy.

For example, you can convert into 1000 Euros in your Wise Multi Currency card with just one low fee and at the real exchange rate. Then, as you travel and spend while on holiday you can use the card and spend down from the Euros you loaded.

No conversion fees, markups, or additional foreign transaction fees here.

Open your free Wise account now

A cheap, fast, and transparent alternative: Wise

The Wise Multi-Currency Card lets you avoid cross-currency conversion fees entirely.

With a single account, you can load up on 40+ different currencies that you can spend down from. All with just one low conversion fee and the real exchange rate when you convert.

And you can keep track of your transactions and top up your currency accounts on the go with the easy-to-use and award-winning Wise app.

You don’t have to be abroad to use the card either. You can shop at foreign online shopping sites like Alibaba, Amazon, Qoo10, and Grab with the Wise MultiCurrency Card.

Save money on foreign transaction and cross currency conversion fees by signing up for Wise’s MultiCurrency Card for free today.

**Sources used for this article:**
  1. Citibank Foreign Transaction Fee
  2. OCBC Cross Conversion Fee
  3. DBS Foreign Transaction Fee
  4. POSB Foreign Transaction Fee
  5. UOB Foreign Transaction Fee

All source checked as of 14 September, 2020


This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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