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Using a Foreign Citi Card or a US Citi Card

Using a Foreign Citi Card or a US Citi Card

Old Aug 25, 19, 11:04 pm
  #1  
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Using a Foreign Citi Card or a US Citi Card

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!
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Old Aug 26, 19, 6:34 pm
  #2  
 
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Originally Posted by KIcarus View Post
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

Last edited by dkerr; Aug 26, 19 at 6:37 pm Reason: Corrected YTD value decline.... big mistake is closer to 1% than 10%. Wow.
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Old Aug 26, 19, 6:41 pm
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Originally Posted by dkerr View Post
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
Note that I edited my original post to correct exchange rate decline. My math was way wrong. Sorry.
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Old Aug 26, 19, 8:00 pm
  #4  
 
Join Date: Mar 2019
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Don't know what it's like in Korea, but here's some thoughts from living in Taiwan:
  • There's no such thing as free currency exchange. Try buying something in Korea with your US credit card and returning it immediately after. You will not get the same amount back. If you only go in one direction (e.g. pay non-US expenses on a US card, and then pay off that card with USD) then the cost might be small, and it might not be obvious, but it's still a cost -- although it's the best you can do in that situation. But adding more transfers adds more layers of costs.
  • Check out what other benefits are offered by your local credit cards. For example, I have a card that gives 40% off movie tickets at the local theater chain. Obviously I'm not going to turn down a 40% discount just to get some extra Citi points. Another card gives free parking at department stores, which is also worth a lot in the city. 10% or more off popular local restaurants. Discounted hotel rates when traveling domestically. Etc.
  • Check out what benefits are available on Korea (or Asia) based airlines. Co-branded credit cards can give ticket discounts and status benefits (separate check-in lines, lounge access, priority baggage/boarding, etc.) All very helpful if you travel even a couple times a year.
  • After all that, how much is left for spending on your US card? In my case, not very much. Sometimes I'll put foreign travel on a US card (Capital One Quicksilver -- no annual fee, straight cash back, don't have to think about it). But recently there have been some new cards in Taiwan with attractive cash-back/rewards even for foreign purchases, so I'm starting to do more of that these days and avoid the trouble/cost of replenishing my USD accounts.
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Old Aug 27, 19, 2:05 am
  #5  
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Thank you for the comments. Currently, I have bank accounts at Citibank KR and Citibank US that I use to make my money transfers. There is no fee to transfer, leaving me only with the currency exchange rate risk. However, it seems like according to the KRW/USD exchange rate over the past year, it has worked in my favor to move my cash to the US and use a US card to make purchases.



I was approved for a domestic Korea Citibank credit card. The Citi “Rewards Card”. https://www.citibank.co.kr/CrdPrdcAl...SQNO=M0_002540.

The earning structure of the card seems to be more complicated that a standard US credit card. (The point earning rate improves the more I spend on the card each month). I am considering upgrading to either the Korean Air or Asiana Citi Card, which offer a flat rate of 1.2 Korean Air Miles or 1.6 Asiana miles (and some other transfer partners at a lower rate), but with a more expensive annual fee (about $120 US). I’m presuming the Asiana card might be better, because I think the points are elite-qualifying. Conversely, many in the points world view Chase losing KAL as a big loss. (Any advice on Asiana vs. KAL would be great!!)



I think in order to maximize my situation, I should use the US Prestige card for all dining and airfare purchases for the 5x, and use the domestic Korean Citi card for everything else.



Thank you @claimui for your comments about living in Taiwan. I’d be interested to learn from other expats how they optimize spending money and earning points while living overseas. (Not necessarily using Citi products specifically, but any bank or card product more broadly.
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Old Aug 27, 19, 2:23 am
  #6  
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It also depends on how you value your reward.

In short - Citibank US Thank You program is better than its KR counterpart (which should be named as Thank You as well). So if you think you can afford it (not sure if you make USD or KRW), then using the U.S. card is a better option.

To make it simple - almost all Asian cards sucks. It is only a matter of how suck they are.
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