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Reasons Why Forex Card is a Better Payment Option Than Credit Card While Travelling Abroad
Posted on Friday, August 13th, 2021 | By IndusInd Bank
When travelling abroad, what is the safest way to carry money? A credit card seems like a convenient choice. However, there is a more economical yet equally convenient payment method – forex cards!
Like credit cards, they allow you to make purchases at any merchant POS terminals; simply swipe/tap and buy on the go. They are also incredibly safe as they are PIN and chip-enabled and attract minimal transaction charges. Keep reading to know why forex cards are a better payment option than credit cards.
No Forex Conversion Charges
Every time you swipe a credit card overseas, your money is converted from INR to your transacting currency and attracts a forex conversion fee. A forex card, on the other hand, doesn’t incur any conversion fees. As the card comes preloaded in the foreign currency you’re transacting in, currency conversion is not necessary.
Thus, when you use a forex card abroad, you’re essentially spending in the foreign currency, not INR.
Nominal ATM Withdrawal Charges
While cashless payments are ideal for making purchases abroad, you might end up needing local cash at some point. Although credit and forex cards both offer convenient ATM facilities, they also charge some additional fees.
When you use a domestic credit card to withdraw cash at an ATM outside India, your bank will levy the following charges:
● Interest charges
● Foreign currency transaction fee
● Cash advance/withdrawal fee
In contrast, forex cards only charge you a nominal withdrawal fee for using ATM services, which is often a fixed amount for every transaction made. It is also much lower than the amount you’re charged for withdrawing cash using credit cards.
Avoid Forex Rate Fluctuations
With forex cards, you can stay protected against volatile forex rates. As the exchange rates are locked the instant you load the currency onto the card, there is no need for doing mental math.
Once the card is loaded, you won’t be charged any currency conversion fee on the transactions, so you’ll also have a clear idea of your overall spending. However, in the case of credit cards, you cannot determine the exact amount you will be charged as the prevailing forex rates influence it.
The moment you swipe your domestic credit card overseas, your bank levies the rates prevailing at the time in addition to the transactional charges. Besides, the rates charged also vary from one transaction to another.
Minimal Mark-Up Fee
All overseas transactions carry more than one fee. Whether you swipe your credit card or forex card, the bank will charge you a price over and above the actual transaction amount. This is known as the mark-up fee. Now, is there a way to avoid this fee? Absolutely! If you use the forex card within the currency jurisdiction, you won’t incur any cross-currency mark-up costs.
But if you’re travelling to more than one country simultaneously, a multi currency forex card will be the wiser choice. You can load multiple currencies in the same card and steer clear of such charges, no matter the country.
Over to You
As you can see, a forex card offers a cheaper alternative to credit cards while also offering unmatched convenience, flexibility, and security. So the next time you take a trip overseas, keep your forex cards handy.
With an IndusInd Multicurrency forex card, you can easily carry up to 14 different currencies on a single card and make international payments without servicing extra costs. Buy IndusInd Multicurrency Forex Card online on IndusForex portal and keep your foreign exchange woes at bay. Learn more here.
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
