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The COVID-19 outbreak has destroyed global travel in 2020. Singaporeans, being one of the most well-travelled group of people in the world, now need to discover hobbies beyond travelling to keep themselves occupied.
Similar to everyone else in Singapore, my family has been affected. Compared to others, we would consider ourselves lucky because both my wife and I are able to work well from home (we have a study room) and have support at home to take care of our two little girls.
The silver lining is that this means our overseas travel-related expenses, for 2020 at least, is going down. With the extra cash, we decided to give ourselves a little treat during circuit breaker by buying books for the entire family. Reading, after all, should be a family affair.
To buy books, I usually use Book Depository, a UK-based online bookseller that is part of the Amazon Group. Book Depository offers an extensive catalogue of books with free shipping to over 160 countries, including Singapore.
Typically, most people, including myself, would pay for their online book purchases using a credit card though there is also an option to use PayPal. Since many of these online bookstores are situated outside of Singapore, there is a credit card foreign currency transaction fee that you incur on each purchase.
Paying For The Books In SGD VS USD
Since we were buying books for the entire family, I was prepared to spend a little more than I usually do. In total, we picked out seven books (three of which were for me) and the others for my wife and our two young girls.
Purchased made on 5 May 2020
In total, the seven books cost S$131.66. This is automatically quoted in Singapore Dollar (SGD) based on your location.
I was curious to find out how much money I can save on my book purchase online if I used my YouTrip card to pay, instead of a regular credit card.
The first thing that you should remember when buying from overseas e-commerce sites is that there is usually an option for you to pay in foreign currency. In general, the US Dollar (USD) is the most commonly used currency that people would use to pay for online purchases.
As written in a previous article, there is a strong possibility that you can get a lower price if you pay with the correct foreign currency. For this purchase, I decided to pay using USD.
The same books cost US$93.01.
Paying In USD Using YouTrip Card
Here is where a simple arbitrage opportunity presents itself.
By checking on my YouTrip app at the point of purchase, I could immediately see that I need to convert only S$131.46 to get US$93.01. This is based on the current spot rate at the point of conversion. It’s also S$0.20 lower than the S$131.66 I was quoted in SGD.
In other words, YouTrip is offering me a better exchange rate for SGD/USD as compared to what the website is offering me.
|Price of books in SGD (default option)||S$131.66|
|Price of books in USD||US$93.01|
|Price of books if you pay in USD by converting your SGD to USD via YouTrip||S$131.46|
Additional Currency Conversion Fee
While it’s nice to know that I can save S$0.20 from my purchase just using this nifty trick, $0.20 is pretty negligible (though nevertheless still savings) for a purchase of more than $100. Fortunately (or unfortunately), this isn’t the only difference.
You see, whenever you make a transaction with an overseas e-commerce site using a regular credit card, you will be charged a currency conversion fee. This applies whether you are paying using in USD, other foreign currency or even if you choose to pay in SGD.
For example, when I bought books from Book Depository in February 2020, I paid S$41.87.
My credit card was billed that amount – S$41.87.
In addition, there was also a CCY Conversion fee of S$0.42.
In March 2020, I also bought books for the girls from Book Depository for S$37.51.
Similarly, I was charged S$37.15, plus an additional CCY conversion fee of $0.38.
Based on past purchases, CCY conversion fee appears to be about 1% of the bill, at least for the credit card that I used.
So, had I paid using a regular credit card for this purchase, I would have been charged a CCY conversion fee of about S$1.31.
How Much Did I Save Using My YouTrip Card To Pay For Books Online?
What I paid using YouTrip – S$131.46 (US$93.01)
What I would have paid if I used a regular credit card – S$132.97 ($131.66 + $1.31)
Total savings: About S$1.50
Before ending off, I think it’s important to stress that the savings I was able to enjoy by paying for books using my YouTrip card is based on my purchase. My personal experience does not cover the infinite scenarios we face for overseas online shopping.
Depending on the e-commerce sites that you use, you may save a higher or lower amount. In some cases, it may be possible that paying in USD or other foreign currencies using your YouTrip card may not earn you any savings.
However, it doesn’t change the main points that we want to share for this article on how you can save money on your overseas online purchases.
The first is that whenever you are buying from an overseas e-commerce site, the exchange rate that you get is important. A favorable exchange rate means that you get to enjoy a lower price once it’s converted back to SGD. The better the exchange rate that you get, the more you will save.
The second is that you also save by not paying the currency conversion fees. By using YouTrip to pay for your online purchase, you do not have to incur the additional cost, which can easily be 1% or more of your purchase.
So even as you stay at home during this period and rely more on overseas online transactions to get the items that you need, remember to pay using the right method to save as much money as possible on your purchases.
Use the promo code DNS5 during your YouTrip registration to receive a welcome credit of $5 in your YouTrip account.