Originally Posted by
KIcarus
Hello All,
Currently I'm living and working in Korea. I opened a bank account and received a domestic Korea Citi Rewards Credit Card. The point earning rate is not nearly as good as my Prestige card (5x on dining can't be beat). It's essentially a 1x everywhere card. However, when I use my US Citi card at merchants in Korea, I understand that I am exposing myself to exchange rate fluctuations between Korea and the US (Two times--Once when I swipe my card, and again when I transfer my Korean Won back into US dollars to pay my bill.
How would flyertalkers approach this situation? Would you move the majority of spending to a KRW Citi Card, to insulate myself from the exchange rate risk, or would you continue to use the card that provides you with the highest point return, exchange rates be damned? I'm curious to hear how ex patriot flyertalkers approach their overseas spending patters, not merely for using Citi products, but in general for daily credit card or bank account usage. Thank you for your insight!
Prestige card does not levy a foreign transaction fee and I have found that mastercard exchange rates are as close to market spot rates as you can get.
However transferring money back to the US to pay the bill is a different matter. For major currencies I have found transferwise to be the best... GBP/EUR/USD they charge what amounts to roughly 0.35% which is far better than any bank and maybe worth it for the 5% return on restaurant spending. But they do not support Korean Won (yet?).
So the next thing to look for is a debit card with no foreign transaction fee... I have a debit card on a USD account which I can withdraw cash at an ATM overseas and there is no transaction fee... it is a Visa debit and again rates are as close to market spot rates as you can get. So, does your bank in Korea charge foreign transaction fees for overseas withdrawals on the debit card? But wait, I hear you say, I can't get to an ATM in the US to withdraw cash. So try attaching the debit card to Venmo and paying yourself (or a trusted family member) and then withdrawing the cash from Venmo into a bank to pay the credit card bill. No guarantee that this will work (some cards get rejected, but I have had more luck with Venmo than e.g. Apple Pay/Cash). And of course Venmo only works in the USA so you will need to have kept your US cell phone number to sign up for Venmo.
All of the above can help minimize transaction fees. There is nothing you can do to avoid currency exchange rate fluctuations short of playing the exchange rate markets. For that you could open an account with someone like oanda.com. The Korean Won has been pretty stable against the dollar over the last 5 years, but has declined in value ~1% year-to-date...
https://finance.yahoo.com/quote/KRW=X
Have fun! And reminder that anything you try is at your own risk.
DAK