Best Multi-Currency Debit cards in Hong Kong

There are at least 8 multi-currency debit cards in Hong Kong. See them compared side-by-side to determine which is the best one for you. HSBC's multi-currency debit Mastercard is likely the choice of card for most people.

Background

The pre-requisite to having a multi-currency debit card is to have a bank account that supports multiple currencies. Some banks may let you store other currencies, but may not let you debit from them directly. e.g. Mox.

In almost all cases, a multi-currency debit card helps you avoid or reduce the 1.95% foreign transaction fee that applies to perhaps 99% of credit cards. Another reason for the debit card is to perhaps spend the currency you may previously have received as a gift or business transaction or converted (hopefully at a better rate).

I can write a lengthy post about exchange rates, but for simplicity's sake, the exchange rate may be set by your bank or by Mastercard, and there are 2 scenarios:

1. Supported currencies - These are currencies your multi-currency account supports. You can either convert currency upfront before you spend it with your debit card, or you may pay based on the exchange rate when the transaction is authorized, or the exchange rate determined for the day of the transaction.
2. Unsupported currencies - These are currencies you cannot store in your multi-currency account. You may either pay based on the exchange rate set by your bank or Mastercard, and your HKD account would be used to debit the amount.

There are variations between banks on whether the transaction in the currency will be rejected if there is an insufficient balance, or whether there is an automatic conversion if there is sufficient balance in your HKD account.

How to choose the bank

Unlike credit cards, where you can freely choose a credit card issued by a bank - the issuer - without having an account with the bank, debit cards require you to have a bank account with the bank issuing the debit card. Otherwise, there is no balance to debit against.

In other words, you are really choosing the bank when it comes to debit cards, and not choosing the card.

There are a few key considerations I will discuss. I've compiled the comparison table below and included links to data whenever possible so you can fact check for yourself. In an upcoming post I will discuss overseas ATM withdrawal fees. Cash use is constantly changing around the world, and it also depends which places/purchases require it. To keep this simpler:

I assume cash is going away and you pay mostly with card

I will also not cover other benefits that come with the debit card beyond what is listed in the table below. e.g. golf or insurance.

Supported Currencies

As 1.95% foreign transaction fee avoidance is the primary goal, you should first choose a bank based on whether they support the currency you want to store for whatever reason.

If Thai Baht (THB) is important to you, then you have already started narrowing down the list of banks.

The same goes for ZAR, SEK, NOK and DKK. There is no bank that supports both SGD and ZAR, so you may want to have multiple bank accounts.

If you don't need to store a particular currency, you may want to consider other factors such as cash rebate, balance requirements or exchange rates. I will cover those in sections below this table.

Cash Rebates

Most cards offer an unlimited cash rebate. Unless someone gave you the money, do not think of this as free money. This is a rebate if you exchanged the currency yourself at some point, or if the bank or Mastercard exchanged it for you.

DBS only offers promotional rebates, so many of you will choose a card with Unlimited because who doesn't like the sound of that?

Next, most people will choose based on the highest rebate. Completely logical. The banks will try to sway you based on whether there is a minimum account balance requirement, and what that amount is. If you have lots of money, narrow down your choices to the banks with the highest rebate.

Currency Auto-conversion

If you're tightly managing your budget, you may not want a bank that auto-converts a currency for you at all, or at least provide an option for you to toggle, regardless of whether it's a supported or unsupported currency. This is usually more important if the conversion is expensive.

If you manage your budget more loosely, auto-conversion may not be a concern at all and you want to focus only on getting the best rate.

Exchange Rates

We are all after the best rates, whether we have a high or low account balance. This could be number 1 in priority for some people.

The exchange rate depends on a number of factors, but generally they are in the order listed below. Mastercard is slightly better than UnionPay. UnionPay usually excels in RMB conversions.

Side note: UnionPay credit cards generally waives the 1.95% foreign transaction fee in Hong Kong.

The table above shows variations is exchange rates between supported and unsupported currencies, but there is one clear winner - HSBC - if you view it side-by-side as shown below because it uses the Mastercard network rate.

Hang Seng or Bank of China (HK) depends primarily on your ability to meet the account balance requirement.

Takeaway

HSBC offers the best exchange rates and cashback rates whether you have no account balance or a high account balance.

DBS is unique as it supports Scandinavian currencies (SEK,NOK,DKK).

There may be a trade-off between DBS and Hang Seng depending on the combinations of currencies you need. Of course, no trade-off is necessary if you have multiple bank accounts.

Bank of China (HK), offers the high 0.5% cash rebate despite having a lowest account balance requirement in its class at $10K.