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Monday, January 2, 2012

Overseas Transactions with Maybank Visa Infinite

(Article by My Credit Cards: http://creditcardsmalaysia.blogspot.com/ )


In my initial review of the Maybank Visa Infinite titled Maybank Visa Infinite - The Best Credit Card for Overseas (click here to read it), I mentioned the followings:

For every RM1 spent overseas with the Maybank Visa Infinite, you will earn 5X Treats Points. This feature is the main benefit of this card. With the 5X Treats Points, it's like getting returns of 2.5% when redeeming for cash vouchers (e.g. you spend RM2,000 overseas, you get 10,000 TP where you can redeem for RM50 cash voucher).


Well, I have done several overseas transactions since I received my Maybank issued Visa Infinite credit card, and here are my comments on 2 transactions:  
1st Transaction was for an online payment to a merchant in US.

Transaction Date: 31 December 2011 
Posting Date: 1 January 2012 
Online Transaction Amount: USD610.00 
Amount Billed by Maybank: RM1959.46
Therefore conversion rate = 1959.46/610 = 3.2122

Based on Visa International Currency Converter (click here), the exchange rate for USD to MYR on 1st January was 3.1725.

Therefore, as you can observe above, with the use of credit card, we are charged Overseas Admin Fee by the bank/card issuer when we do overseas transactions.

Let us see how much was the credit card overseas exchange fee in terms of percentage for the above online transaction:

MBB Overseas Admin Fee = (3.2122-3.1725)/3.1725 = 0.012513 or 1.251% which is much more than the supposedly 0.5% Admin Fee chargeable by MBB.

But the good news is, since I used my Maybank Visa Infnite, I earned 5X Treats Points :)

Based on 10,000 Treats Points to redeem RM50 cash voucher, it works out to be 2.5% returns. 

So from above transaction, I earned 1959 x 5 = 9795 Treats Points or equivalent to approximately RM1959 x 2.5% = RM48.98 (in terms of cash vouchers).

So deduct this so call rebate, my actual transacted cost comes out to be RM1959.46-RM48.98 = RM1910.40. 

And therefore the Foreign Currency Exchange Rate from USD to MYR comes out to be approximately 3.1318 (1910.40/610),  which is lower than Visa's Exchange Rate on 1st January 2012 :) 

Just for info, I also bought a bank draft for my son in USD on 30th December 2011 and the rate offered to me was 3.20 (which is less than the coversion rate compared to the rate billed to me by Maybank with my credit card at 3.2122 mentioned above).


2nd Transaction was for a face to face transaction in Singapore.

Transaction Date: 22 December 2011 
Posting Date: 23 December 2012 
Face to face Transaction Amount: SGD560 
Amount Billed by Maybank: RM1,395.92
Therefore conversion rate = 1395.92/560 = 2.4927

Based on Visa International Currency Converter (click here), the exchange rate for SGD to MYR on 23rd December 2011 was 2.46187

Once again, you can observe with the use of credit card, we are charged Overseas Admin Fee by the bank/card issuer when we do overseas transactions.

So, once again let us work out the Exchange Fee in terms of percentage for the above transaction in Singapore:

MBB Overseas Admin Fee = (2.4927-2.46187)/2.46187 =  0.012523 or 1.25% which is much more than the supposedly 0.5% Admin Fee chargeable by MBB.

Once again, from the above transaction, I earned 1395 x 5 = 6975 Treats Points or equivalent to approximately RM1,395 x 2.5% = RM34.875 (in terms of cash vouchers).

So deduct this so call rebate, my actual transacted cost comes out to be RM1,395.92 - RM34.875 = RM1,361.045. 

And therefore the Foreign Currency Exchange Rate from USD to MYR comes out to be  2.43 (1361.04/560), which is lower than Visa's Exchange Rate of 2.46187 on 23rd December 2011 :) 


CONCLUSION

Most of the time we will end up paying more with credit card issuers' overseas Admin Fee, but with the Maybank Visa Infinite, we can actually earn a little bit with our overseas transactions.

From the above, I have shown you that the Maybank Visa Infinite is indeed fantastic and definitely currently the best credit card for overseas transactions. This is because if we were to consider the 5X Treats Points earned, we are actually forking out less than the actual market foreign exchange/conversion rate. 

[UPDATE 7 January 2012] - Now I know why the overseas conversion rate is not 0.5% for the Maybank Visa Infinite. Below is what is stated behind my Maybank Visa Infinite Statement -



"Foreign charges applies a conversion factor of 2.5% to the converted amount and charges that is made in a foreign currency other than US Dollars will be first converted into US Dollars before being converted into Ringgit Malaysia"  

WTF, no wonder we are offered 5X Treats Points with the MBB VI. But, how come my about transactions came out to be less than 2.5% for overseas fee at approximately 1.25%???

And for those with Maybankard 2 Card American Express credit card, this is what is stated behind my onthly statement -



"Foreign Charges converted by AMEX apply a coversion factor of 2.5% to the converted amount plus 0.5% administration cost imposed by Maybank"


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8 comments:

  1. I do agree with you that the TP earned from oversea transaction is indeed very attractive. I will love to have this card as well but looking at the T&C, the annual fees will only be waived if a yearly transaction of RM50K. I was wondering how you manage to use this amount of transaction judging from the no of CC that you have?

    ReplyDelete
  2. ykwc, good question. I also have not figure that out since since most of my transactions are with my MBB 2 AMEX.

    RM50K is not hard for me to achieve with my children school fees and my insurance premiums (where AMEX is not accepted). But might have to sacrifice earning less with the MBB VI instead of using my Alliance Plat and Alliance Debit card. Still have 10+ months to decide on this matter, haha

    Other that OCBC Titanium MasterCard and the cards mentioned above, the rest of my credit cards are irrelevant as far as earning me money is concerned.

    ReplyDelete
  3. SCB VI also give 5x points for oversea transactions. Why u favour MBB only?

    ReplyDelete
  4. wt, maybe you should go find out what is SCB Overseas Admin rate AND redemption program compared to MBB's.

    And maybe you should also read my article on SCB VI (including the comments too).

    ReplyDelete
  5. hi,
    MBB admin fee is 1% instead of 0.5% which i've just confirmed with MBB cards centre. I encountered the same issue with you as well when i swiped my MBB VI during overseas trip but it's ok since my company pay for it and i earned the TP :)

    anyway, your blog does help me a lot on how to get more benefits from the card...

    ReplyDelete
  6. GenX, thanks again for another good analysis.

    MH, is the MBB admin fee of 1% stated anywhere online? And is this for all Visa and Mastercard issued by MBB?

    ReplyDelete
  7. hi,
    Just got my MBB VI last week, but unable find 2.5% conversion factor statement in TnC, only can see :-
    13.3 Where the Cardmember uses the Credit Card outside Malaysia, the transactions shall be charged in the oicial currency of the country
    concerned and converted into Ringgit Malaysia at such exchange rate and at such time as may be determined by Visa International
    at its absolute discretion on the date it is processed by Visa International, depending on the card used. In addition, the Cardmember
    also has to pay the administrative costs at a rate of 1% or at other rates will be determined by Maybank for conversion transactions made
    in foreign currencies.

    http://www.maybank2u.com.my/WebBank/TnC.pdf

    ReplyDelete
  8. cch, the 2.5% is mentioned behind my MBB VI monthly statement. You'll see it when you receive your paper statement.

    ReplyDelete

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