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The 50 Percent Rule: Why You Should Only Change Half The Foreign Currency You Need For Overseas Trips

It’s 2019. You shouldn’t have to exchange large sums of foreign currency when you go overseas “just in case”.

Years ago, a good piece of advice for overseas travellers was to change more foreign currency than you think you need, just in case.

This made sense because many places didn’t accept non-cash payments, and even if they did, would charge prohibitively expensive foreign transaction fees. And if you ran out of foreign currency mid-trip, you might be able to find places that would allow you to withdraw or exchange more.

However, times have changed and today, travellers would end up paying a price (literally) for this foreign currency cash buffer since they would need to exchange unused foreign currency at the end of the trip.

Today, cashless payments are more widely accepted around the world, while the network of overseas ATMs that can process international withdrawals has increased, and there are even incentives to using your credit cards overseas.

With these very welcome developments, there is very little reason for you to be walking around with excess foreign currency when you travel. In fact, here are 5 reasons why can consider going further and exchange just 50% of how you expect to spend.

Read Also: Changing Money For Your Overseas Trip? Here Are 5 Tips To Get The Best Foreign Currency Exchange Rates

#1 It’s Less Painful If You Lose Your Wallet Or Get Robbed

If your wallet gets pickpocketed or simply misplaced, you can contact your bank to cancel your cards right away to prevent any unauthorised transactions and dispute any charges already made – but any cash you have in your wallet would be unrecoverable.

Travel insurance might cover a portion of your lost cash, but most policies would have caps on how much can be claimed.

Most of us wouldn’t feel very safe walking around even in Singapore with $1,000 cash in our pockets, so why are we so ready to walk around a foreign country with an equivalent or even higher amount of currency on hand?

Read Also: What To Do If You Lose Your Wallet Or Purse?

#2 You Can Easily Obtain More Foreign Currency If Needed

Today, its pretty simple to withdraw cash from overseas ATMs, so long as your debit card has one of the matching symbols on the machine – Cirrus, Plus, Visa, MasterCard, etc.

You just need to be aware of withdrawal fees that will be charged.

Bank Overseas Withdrawal Fees
Citibank – No withdrawal fee
– 2.5% administrative fee
DBS/POSB – $7 service charge per withdrawal on Plus/Cirrus ATMs
– 1% Visa/MasterCard conversion fee
– 0.6% UnionPay conversion fee
– Up to 2.65% administrative fee
– Total administrative and conversion fees will not exceed 3.25%
HSBC – $8 withdrawal fee
– 1.5% administrative fee
OCBC – 3% withdrawal fee (min S$5, max S$20)
– 1.8% administrative fee
UOB – $5 withdrawal fee
– 2.5% administrative fee


You can save on fees if the ATM belongs to the same bank as yours, or if the ATM belongs to a partner of your bank. For example, DBS partners with Westpac Group in Australia, so there is no withdrawal fee if you withdraw using a DBS Plus/Cirrus Card at ATMs belonging to Westpac, St. George Bank, Bank of Melbourne, and BankSA.

Take note that when you make overseas withdrawals, you’re beholden to the foreign currency exchange rates used by the bank, which means you might lose out a little there.

If you are withdrawing from an overseas ATM using your Multi-Currency Account (MCA), you won’t have the foreign exchange conversion issues, such as the DBS Multi-Currency AccountHSBC Everyday Global Account (EGA), and UOB Mighty FX, though withdrawal fees may apply.

Read Also: Here’s Why Frequent Travellers in Singapore Should Consider Opening A DBS Multi-Currency Account

#3 You’ll Curb Binge Spending

Having too much foreign currency on hand might make you more inclined to binge spend, especially towards the end of your holiday if you want to “clear” the foreign currency you already exchanged and budgeted for.

Esta Shah, marketing professor at the University of Cincinnati, calls this the ‘licensing’ effect, which happens when we’ve over-allocated money for our trip and give ourselves mental excuses to splurge.

We could have saved that extra cash and used it for paying off your expenses back home, instead of buying a ton things you never wanted in the first place. Bringing less foreign currency adds a psychological barrier to discourage us from overspending while on holiday.

Read Also: I Spent 21 Days In The USA With My YouTrip Card – It Was (Mostly) Good

#4 You Can Enjoy Perks For Not Using Cash Overseas

Cards and other forms of cashless payments are starting to overtake cash as the primary mode of payment in many places around the world.  With this wide acceptance comes opportunities to earn big credit card rewards.

For example, air miles credit cards like the Citi PremierMiles Visa Card offers 2 miles and the OCBC 90°N Card offers 4 miles (until 29 February 2020) for every S$1 spent overseas, versus only 1.2 miles for every S$1 spent locally.

Just remember not to never pay in Singapore Dollar when overseas and incur more fees than you need to.

Read Also: Is Using Card Over Cash Always More Expensive When Travelling Overseas? We Travel To Europe To Put This Theory To The Test

#5 You Won’t Have To Deal With Too Much Leftover Loose Change

If you were to gather all the foreign currencies you have at home, how much would you have?

Loose foreign currency puts you in a lose-lose situation. If you decide to change them back to Singapore Dollars you’ll lose a little in the transaction, provided the money changers is willing to accept your small notes and coins in the first place.

If you decide to keep the foreign currency “for next time”, you’ll be sitting on cash that is idle and virtually useless for months (or even years). When you use less cash, you’ll have less loose change and minimise “wastage” of foreign currency.

Read Also: Complete Guide To Buying Travel Insurance In Singapore

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