What You Need to Know About Cash Withdrawals Abroad

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What you need to know about cash withdrawals abroad

Travelling abroad can be a ton of fun, but it also comes with its fair share of conundrums. Chief among those is whether it’s a good idea to withdraw cash in a foreign country using your debit or credit card.

Now, you shouldn’t even be in a situation where you need to withdraw money from an ATM abroad, unless it’s an absolute emergency. However, if you’re really in need of money abroad, and are looking to make a withdrawal, most debit and credit cards offer you the facility of doing just that.

However, withdrawals made using either of these cards come with fees, depending on who you’re banking with. In general, making withdrawals using your credit card is an expensive affair, as the fees and interest charges you incur can be quite high.

Charges levied by local  banks for cash withdrawals abroad:

DBS Bank

When it comes to DBS credit card withdrawals, a fee of 6% of the withdrawal amount per transaction will be levied, subject to a minimum charge of S$15. The bank will also charge you an interest rate of 28% per annum on the withdrawal amount. This applies on a daily basis from the time of withdrawal until you repay the full amount.

If you happen to own a DBS Bank debit card and are looking to make a withdrawal while you’re overseas, you have to prepare yourself for a charge that’s equivalent to 0.6% or 1% of the withdrawn amount, depending on whether the transaction conversion is carried out by UnionPay or Visa/MasterCard respectively.

To add to this, the bank will charge you an administrative fee up to 2.65% of the withdrawn amount and debit from your bank account. However, the maximum amount of all fees combined, will not exceed 3.25% of the withdrawn amount.

Any cash withdrawal made abroad at a Plus or Cirrus ATM will come with a S$5 service charge, but you can use your Cirrus Card for a S$2 service charge at the ATMs of the following banks:

  • Bank of Central Asia (BCA, Indonesia)
  • Bank of Pillippines Island (Phillipines)
  • HSFC (India)

Fortunately, withdrawals at the following ATMs abroad come with no service charge if you use your Plus/Cirrus Card:

  • DBS Hong Kong
  • DBS Taiwan
  • Westpac Group Australia
  • DBS India
  • DBS Indonesia

If you use your UnionPay Card at the following ATMs abroad, you will not have to pay a service fee either:

  • DBS Hong Kong
  • Westpac Group Australia

Related: Don’t Pay in Singapore Dollars When Shopping Overseas

UOB Bank

Cardholders who own a UOB credit card can get instant cash at ATMs abroad as well. However, there are some guidelines to keep in mind before making withdrawals:

  • The minimum withdrawal amount is S$200
  • You can get a cash advance only up to 75% of your credit limit or your available credit limit, depending on whichever is lower
  • The maximum withdrawal amount from a UOB ATM is S$3,000 per day
  • A fee of 6% of the withdrawal amount per transaction will be levied, subject to a minimum charge of S$15.
  • Interest will also be charged on a daily basis from the date of the withdrawal until the amount is repaid in full.

OCBC Bank

Similarly, OCBC credit card holders can also use their credit cards to make withdrawals at ATMs abroad. But there are a number of fees and charges that are applicable, as well as certain tips to take note of.

  • If the bank approved your OCBC credit card prior to 22 August 2012, then your withdrawal amount is limited to your available credit limit. However, if your card was approved after 22 August 2012, then you can only withdraw up to 70% of your card’s credit limit.
  • A fee of 6% of the withdrawal amount per transaction will be levied, subject to a minimum charge of S$15.
  • The interest rate of 28.92% per annum will also be charged on the withdrawal amount. This interest will be charged on a daily basis from the time of withdrawal until the amount is fully repaid. The interest charges will be compounded if the monthly interest charges aren’t paid back in full.

Small or large amounts? How much should you be withdrawing abroad?

If you’re in a position where making a withdrawal from an ATM becomes unavoidable, then it’s probably advisable to withdraw a fairly large amount instead of a smaller amount.

This is because banks impose fees on the percentage of the amount withdrawn, and on every withdrawal made.

Most cards also come with a minimum charge, thus it makes more sense to withdraw a larger amount. It will also cost you more to make several small transactions.

Using your credit card for purchases abroad vs withdrawing cash

Let’s say you’re short on cash and want to purchase something while holidaying abroad. What would be the best way to go about it? Paying with your credit card or using it to make a cash withdrawal from an ATM?

Well, the answer should be pretty simple. Swipe your credit card. There are a number of reasons why we prefer this to withdrawing from an ATM:

  • Credit card cash withdrawals come with higher interest rates than purchases.
  • While card purchases give you some breathing space to pay back the amount, withdrawals attract interest charges from the day you make the transaction, so you don’t have any breathing space to speak of.
  • Most credit card cash withdrawals also incur fees and service charges.
  • Using your credit card to make purchases will help you get reward points or purchase protection, which you can’t benefit from if you pay by cash made via a cash withdrawal.

Tips to avoid using your credit card to withdraw money

While this has more to do with good pre-trip planning and common sense, it’s always advisable to keep these few tips in mind to help you avoid ending up in a situation where you need to use your credit card to withdraw money.

  • Budget your trip. Ensure that you are carrying enough foreign currency as well as a little bit extra to tide you over in case you find yourself short of funds.
  • Take all possible expenses into consideration well in advance of your travel dates so you will have a fairly accurate idea of how much money to carry with you.
  • Buy traveller’s cheques as an alternative to cash.
  • Try acquiring a credit card that does not levy fees on withdrawals made abroad, just in case you DO find yourself in a situation where you need to withdraw money.

Different banks and card providers charge different amounts for withdrawals made abroad. It would certainly be in your best interests to gather as much information as you can before you head overseas. Stay informed, and you won’t be in for a rude shock once your receive your credit card bill.

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