Credit Cards for Overseas Transactions

[TheRoadAhead]

You don't need to convert manually - HSBC will just do it automatically if there isn't currency in your account. As noted, recently in India the HK$ exchange rates used for INR tranactions on the credit card and on the debit card were exactly 1.95% different. So there is no additional FX charge on the debit card - it uses the same rate as the credit card (without the 1.95% fee). And then it gives you 0.4% back as a credit to your HKD savings account.

Yes and again this is not a surprise. HSBC charged you a FX fee of 1.95%, as they do for all credit cards. If you used a debit card, they will also charge 1.95% in FX for a payment in INR as HSBC HK does not support INR. If you made your payment in THB, EUR, USD, AUD etc they would not charge the FX fee.

I've described all this earlier in the other thread (on rewards - this is the thread on the 1% surcharge).
But very briefly, a mixture of HSBC VisaSig for 3.6% on dining, HSBC Red for 4% on online, (previously when living in a serviced apartment CitiCashback for 2% on rent), CitiCashback for 1% by default, CitiPremierMiles (for miles, not cash) for overseas trips. All coupled with the various additional offers which HSBC and Citi have from time to time.

These are decent options for HK. Ultimately, I wish I could simplify my finances and only use one bank, and same bank credit card and ideally same bank investment platform. Adding more platforms/apps/accounts creates complexity, but many people are fine with it.

[PLamHK]

Yes and again this is not a surprise. HSBC charged you a FX fee of 1.95%, as they do for all credit cards. If you used a debit card, they will also charge 1.95% in FX for a payment in INR as HSBC HK does not support INR. If you made your payment in THB, EUR, USD, AUD etc they would not charge the FX fee.

No. You have misread my previous post. HSBC DID NOT charge a 1.95% fee for the debit card from INR.

On the 18 Jan I was charged an exchange rate of 0.09003 for a transaction using my Debit Card (and got 0.4% cash back). I was charged 0.091794 for a transaction on my Credit Card. Which is 1.96% different (I'll take the 0.01% as an exchange range movement between the transaction times).

[TheRoadAhead]

No. You have misread my previous post. HSBC DID NOT charge a 1.95% fee for the debit card from INR.

On the 18 Jan I was charged an exchange rate of 0.09003 for a transaction using my Debit Card (and got 0.4% cash back). I was charged 0.091794 for a transaction on my Credit Card. Which is 1.96% different (I'll take the 0.01% as an exchange range movement between the transaction times).

I am starting to understand your point and it is interesting. HSBC seems to charge foreign transaction fee on all their credit cards, but 0% on debit cards. "We will not charge you any foreign currency transaction fees for overseas purchases made with your HSBC Mastercard® Debit Card"

Generally, financial institutions (the credit card issuer such as HSBC and the network such as Visa and Mastercard) take a commission on the FX during the conversion, regardless of if your card charges you with a foreign transaction fee or not.

You mentioned you made two payments in India with a HSBC credit card and a debit card, in the same day. It would be interesting to compare the true cost including foreign transaction fee + FX markup. I would be surprised if HSBC takes a markup of 1.95% for the debit card transaction and not the other. If it is indeed the case, this is highly deceiving for consumers, even more so that the CBF that is discussed in this thread.

Mastercard, Visa, and Amex apply different methods when taking a margin on each transaction involving FX, but it is generally in the order or 0.2 to 0.5%, not 2%.

[PLamHK]

I am starting to understand your point and it is interesting. HSBC seems to charge foreign transaction fee on all their credit cards, but 0% on debit cards. "We will not charge you any foreign currency transaction fees for overseas purchases made with your HSBC Mastercard® Debit Card"
...
You mentioned you made two payments in India with a HSBC credit card and a debit card, in the same day. It would be interesting to compare the true cost including foreign transaction fee + FX markup.

The examples I quoted above were the true costs to me. The amount of HKD charged to my card was 1.96% greater for the credit card than for the debit card. If what you are discussing in HSBC/Visa/Mastercard's accounting then frankly I'm not that bothered - all that matters to me is what it costs me in the end.

For what it's worth xe.com shows that the mid-market rate on 18 Jan was 0.0900066 which is within 0.02% of the rate that HSBC charged me for the transaction on my debit card.

[poiasd]

I played around something similar with:
* AMEX Explorer
* Taobao World Mastercard (BOCHK)
* Chill Card (BOCHK)
* Visa Signature (HSBC)

I tried to do the same value transactions in INR, within a few minutes to max an hour of each other. Here were my findings:

* BoCHK Taobao: +0.15% of midmarket rate (xe.com)
* AMEX: +1.5% of Taobao
* BoCHK Chill: +1.92% of Taobao
* HSBC Visa Signature: +2.06% of Taobao

I didn't try the HSBC Debit Card even though I have it unfortunately, but maybe it would've been cheaper than BoCHK Taobao (maybe coz HSBC can also get better INR rates than BoCHK?)

I'm going to the UK next month, will try and buy the same pint on every card I own. Good way to get drunk!

[Crankshaft]

I see a lot of my colleagues use the HSBC debit card for overseas spending and I've been tempted, but I still use my HSBC Visa Signature CC for that. Got all my rewards set to the overseas spending category, so one would assume there is still a net gain there in the end.

MMPower card would be nice though, but I don't want to have to worry about meeting the minimum spending every month.

[TheRoadAhead]

The examples I quoted above were the true costs to me. The amount of HKD charged to my card was 1.96% greater for the credit card than for the debit card. If what you are discussing in HSBC/Visa/Mastercard's accounting then frankly I'm not that bothered - all that matters to me is what it costs me in the end.

For what it's worth xe.com shows that the mid-market rate on 18 Jan was 0.0900066 which is within 0.02% of the rate that HSBC charged me for the transaction on my debit card.

Got it, then you got charged more or less the same FX rate using your debit and credit card, which is a good thing as it is more transparent this way. It reinforces the idea that let alone redemption / special cash back offers, using your HSBC debit card overseas is substantially better than using your credit card.

It might actually be better to use your debit card this way than converting HKD to whatever local currency you need, and use your debit card to withdraw from this specific currency as HSBC generally takes about 0.5 to 0.8% when doing FX conversion. If you simply use your card with no local currency balance, it is connected to the network FX exchange and therefore you might only see a few basis points of markup. Anyhow, at the end of the day, debit card is the way to go in most scenarios.

[poiasd]

In my particular case, AMEX Explorer's bonus on fx (upto HK$10k/quarter) makes it worth it even after the ~2% fx fee. (AsiaMiles / Effective Cashback of ~11%)

[TheRoadAhead]

I played around something similar with:
* AMEX Explorer
* Taobao World Mastercard (BOCHK)
* Chill Card (BOCHK)
* Visa Signature (HSBC)

I tried to do the same value transactions in INR, within a few minutes to max an hour of each other. Here were my findings:

* BoCHK Taobao: +0.15% of midmarket rate (xe.com)
* AMEX: +1.5% of Taobao
* BoCHK Chill: +1.92% of Taobao
* HSBC Visa Signature: +2.06% of Taobao

I didn't try the HSBC Debit Card even though I have it unfortunately, but maybe it would've been cheaper than BoCHK Taobao (maybe coz HSBC can also get better INR rates than BoCHK?)

I'm going to the UK next month, will try and buy the same pint on every card I own. Good way to get drunk!

You need to add 1.95% in transaction fees. BoCHK has a 1.95% foreign transaction fee. The 0.15% is probably the FX markup they take on the mid market so we are already at 2.1% in fees here.

I do not think HSBC would charge 2.06% in FX upmark alone. Also, Taobao is not the best way to compare as they generally have a 1 or 2% surcharge on CC payments (including through Alipay HK).

[poiasd]

I mean the BoCHK World Taobao Credit Card, which has 0% FX Fee. The purchase was made in Bombay physically in INR.

https://www.bochk.com/en/creditcard/...nd/taobao.html

Since it's "0% FX", I used it as a basis to compare against the others.