6 Pitfalls to Avoid During The June Travel Period

Heading overseas for a well-earned June holiday? Don’t add cost (or headaches) to your trip with these blunders!

With the June holidays finally here, many Singaporeans will no doubt be headed overseas for a well-earned vacation.

If you’re among them, here’s some tips on common pitfalls to avoid when using your cards overseas. After all, the whole idea is to relax, not give yourself additional stress!

Table of contents

• DCC scams
• Duplicate travel insurance
• Cash advance
• Absence of PIN for credit cards
• Using debit cards for authorisation holds
• Android phone for sideloading

Falling for the DCC scam

Dynamic Currency Conversion (DCC) is a “service” provided by merchants that converts a transaction into the cardholder’s home currency. The idea is that this provides convenience to customers, since they will be more familiar with their home currency.

If the idea sounds ludicrous to you in this day and age where conversions are the swipe of a smartphone app away, you’re right. DCC is basically a way for merchants to make some additional money from customers, because the rate offered is significantly marked up compared to banks. And keep in mind, most banks in Singapore will charge a fee on DCC transactions anyway, so you’ll still end up paying more than what you see on the terminal overseas.

You should always reject DCC and choose to pay in foreign currency.

In theory, the customer is supposed to be given a choice between accepting or rejecting DCC. In practice, however, some less-than-reputable businesses may instruct their cashiers to automatically accept it on behalf of the customer, in order to make more money from the spreads.

This calls for vigilance – always check your charge slips to see what currency you were billed in. If DCC was automatically chosen for you, raise a dispute with the merchant immediately and demand they reverse the transaction. If they refuse, write on the merchant’s charge slip “Customer not provided with option to reject DCC”. This will come in useful when raising a dispute with the bank, which you should also do as soon as possible.

Purchasing duplicate travel insurance (or not having enough!)

Cardholders who purchase air tickets with their credit card may be eligible for complimentary travel insurance coverage. 

With some cards, such as the Citi Prestige or HSBC Visa Infinite, the coverage can be substantial. HSBC Visa Infinite Cardholders, for example, enjoy US$2 million coverage for accidental death, S$100,000 of overseas medical expenses, S$10,000 for trip cancellation, and even S$2,000 coverage for rental car damage. In that case, purchasing a separate travel insurance policy may be duplicative, because you cannot claim the same expenses twice.

However, this can also go the other way, because some credit cards offer only the most basic of coverage. For example, the complimentary travel insurance provided by the UOB PRVI Miles Cards only offers personal accident and emergency medical assistance coverage. If you fall sick before the trip and have to cancel your plans, or if you fall sick overseas and need to see a doctor, or if your flight is delayed or baggage lost, you will not be able to make any claims. In those cases, you should absolutely be buying a separate travel insurance policy.

Always make a point of reading through the terms and conditions of your credit card’s complimentary travel insurance benefit to ensure you have adequate coverage. 

Cash advance instead of cash withdrawals

One of the best features of the Trust Card is that it allows customers to make no-fee ATM withdrawals worldwide, with conversions at the Visa rate with no markup.

However, if you plan to do this, ensure your Trust Card is in the debit card mode, not credit card! Withdrawals via credit card mode are basically cash advances, which attract very high interest rates. Withdrawals via debit card mode tap your Trust Bank balance, similar to withdrawing money in Singapore.

To switch your Trust Card’s mode, login to the app, tap on View Card, then Pair Card. You’ll see the option to pair the card with a savings account instead. 

Not setting up a PIN for credit card

While Singapore has long moved away from magnetic swipes in favour of chip-based transactions, signatures are still inexplicably used as a verification method. This is in stark contrast to other places like Australia, Europe and New Zealand, where chip and PIN is the default.

Since we hardly use PINs in Singapore for credit cards, many people will either not have set a PIN, or forgotten it altogether. You can save yourself some trouble by setting this up before you head overseas.

Using debit cards for authorisation holds

When you check into a hotel or rent a car, it’s common for an authorisation hold to be placed on your card. This is meant to cover any incidental spending such as spa treatments or in-room dining, or any damage caused to the car. 

Even though this is a foreign currency transaction, you should not be handing over your Amaze, Revolut or YouTrip card at this point! That’s because these are debit cards, which do not support authorisation holds. Instead of funds merely being blocked on your card, funds will be deducted instantly, leaving you with less money leftover to spend.

For example, if you have US$1,000 on your YouTrip card, and the hotel requires a US$200 deposit, then you’ll only have US$800 left to spend during the duration of your stay.

To avoid this issue, you should provide a credit card for such purposes. At the time of check-out or returning the car, you can ask them to charge your Amaze, Revolut or YouTrip card instead for more favourable rates (because that will be an actual charge and not just a hold). The hold will then be released on your credit card, and because it’s not an actual transaction, you won’t suffer any foreign exchange losses. 

Not having an extra Android phone for sideloading

With the recent spate of malware scams, many banks have updated their apps to automatically cease functioning if apps from unauthorised app stores are detected.

But there will be some cases where you’ll be forced to sideload apps. For example, when I travelled in Europe and the USA, many electric vehicle charging points required you to download an app in order to use them. These apps were often not available on the Google Play store for Singapore-based accounts, and therefore the only option was to download and install an APK file from outside of the app store (otherwise known as sideloading).

To minimise disruptions to banking services on your primary phone, and to keep yourself safe in the off chance you accidentally download an APK file from a dangerous source, having a separate phone lets you ring fence such apps.

Conclusion

Overseas holidays can present many pitfalls with regards to card usage, but thankfully most of them are rather easily avoidable. 

This would also be a good time to enable overseas transactions on your credit card (which most banks let you manage via the app), as well as inform the bank of your travel dates to minimise the chances of your card getting blocked by an overzealous fraud prevention mechanism.

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