Why Paying in Local Currency is the Real Winner—A Quick Guide for Global Shoppers
Picture this: You’re wandering the streets of Paris, laptop in hand, ready to snag that sleek gadget from an overseas site. The checkout screen pops up, offering a choice: Pay in Singapore Dollars (SGD) or the site’s local currency (USD, Euro, whatever). You’re tempted to stick with the comfort of SGD. But hold up—your credit‑card terms might be about to put that belief in a dust bowl.
Credit‑Card Fees 101
- Foreign‑currency transactions: Most Singapore issuers slap a 1‑3% charge, regardless of the currency tag.
- SGD payments processed abroad: Card associations still hit you with about a 1% fee, plus some sneaky mark‑ups the merchant strings on.
Bottom line: Switching to SGD doesn’t magically erase those fees—it’s just a shift in where the cost ends up.
The DCC Dilemma (Dynamic Currency Conversion)
Ever see that “Pay in your home currency or here’s a local rate?” pop‑up on your card read‑out? That’s DCC—a service merchants sell to convert foreign sums to SGD upfront. It feels safe—”
“Oh, I know exactly how much I’ll be charged.”
—but it’s a trick. Merchants typically jolt the exchange rate with a 5% or richer markup. So you end up paying a higher price, even if you think you’re paying in a familiar currency.
Two‑Step Cost Scenario
- Card issuer adds its 1% foreign‑transaction fee to your purchase.
- Merchant’s DCC adds a 5%‑plus markup.
That’s why the myth that “paying in SGD saves you” is pure folklore.
How to Dodge Those Extra DCC Fees
- Choose local currency: Stick with the money where you are; you’ll avoid those hidden mark‑ups.
- When a merchant forces you to pay in SGD, ask to void the transaction and consider shopping elsewhere.
- Write “DCC rejected” on both copies of the card statement—merchant & yours—to help you dispute the charge later.
In short, the cheapest move for your wallet is to keep payment in the local currency. It turns out your coin holder owes you that much more than you realized—so don’t be fooled by the “home‑currency” offer.
Final Verdict
When overseas, always pick the local currency. That’s the only way to keep foreign fees—and those sneaky DCC mark‑ups—under control. Your credit card will do the heavy lifting, and you’ll save the green.
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