Forex cards: The best way to use money abroad
Posted on Tuesday, January 2nd, 2018 | By IndusInd Bank
Travelling abroad needs a lot of planning and iterations even when things are properly finalized. Air tickets, hotel booking, and currency exchange are just a few but important things that you needs to take into account before finally flying away to a new destination. All things equal, you should give thought to how you will best carry your money to spend during your travel as you have to pay close attention to security, convenience, and cost of all the different options – debit/credit cards, traveler’s check, cash, prepaid travel cards, etc.
Until a few years ago, international debit and credit cards were the most preferred mode of carrying out transactions abroad, but you have plenty of options to choose from, as mentioned above. Exchanging cash at airports and hotels is the most expensive for you on account of different currency exchange rate and same is the case with international debit and credit cards with respect to processing fees and other miscellaneous charges. But it always makes sense to have some cash on you for immediate expenses such as buying a meal, or hiring a cab abroad, considering the fact that it is always risky to carry cash while travelling.
It is, therefore, important to know that there are other user friendly provisions available for travelers to make their overseas travel stress free, as far as money is concerned.
A forex card, also called prepaid travel card or simply travel card, is the most cost-effective, convenient, and secure option to travel tension free.
Why Using a Forex Card Is a Safe Bet?
- Most foreign establishments (hotels, departmental stores, etc.) will accept a forex card without any charge.
- The card can be loaded with a single foreign currency, or multiple foreign currencies if you plan to visit more than one country. You can use them at ATMs and PoS (point-of-sale) machines for most of your purchases.
- In case you misplace the forex card, you can block it online immediately. Some service providers may arrange for a secondary card in case of such emergencies within 2–3 working days. Most prepaid forex cards also offer an emergency cash service. You can call your card provider’s toll-free number to arrange for emergency cash or to re-issue your card.
- You can load your forex card on days of favorable exchange rates. You can lock in that exchange rate. So, even if the rate fluctuates later on, for the bad, you’ll continue getting your promised currency rate. And if you have leftover amount in your forex card, you can get it back at the prevailing exchange rate.
- You can withdraw cash from ATMs abroad free of charge.
- The card is pin protected and you can configure your spending limits.
- You can access online statements to monitor your expenditure.
- You might get complementary offers like discounts on flight fares or hotel tariffs.
- Even taxis in certain places accept a forex card.
- You can reload/recharge your prepaid forex card online by transferring the required amount in Indian Rupees to the card provider’s account. Your card will be loaded with the equivalent foreign currency.
- Your prepaid forex card comes with a free insurance cover.
How Much Cash Should You Carry?
The majority of your expenses when traveling abroad are usually cashless: hotel stays, food and dining, shopping, flight tickets. You can pay for all of these through your forex card. About 70% of your total expenditure is thus, taken care of by your forex card. Apart from this, other services and activities such as availing cabs, bus rides, entertainment options, amusement park visits, entry tickets for sight-seeing, eating at restaurants, etc. also accept Forex cards. Make sure your financial institution’s Forex Card is acceptable at multiple international retail chains.
How Is Prepaid Forex Card Better Than Traditional Forex Options?
Cash versus Forex Card
- While carrying cash would require constant checking of the exchange rate and would have a greater risk of loss, , a forex card is safe and secure, and conveniently fits into your wallet.
- A forex card is usually available at a better rate than currency notes.
- Unlike foreign cash, which is subject to availability, prepaid forex cards can be loaded with any amount of foreign currency at any time.
Credit/Debit Card versus Forex Card
- You can save between 3% and 11% that is charged on your credit/debit card in the form of commissions, service taxes, and cross-currency charges.
- You also save the 2% to 5% transaction fee charged on your international debit/credit card.
- Unlike credit/debit cards, you are not susceptible to variable rates. Since the Indian Rupee is on a downward trend against the dollar and many other currencies, it is smarter to lock the rate on a forex card.
- The foreign bank will charge your credit card bank in India an exchange rate keeping their profit margin built in.
- The exchange rate offered by debit cards are more expensive.
Travelers’ Cheque versus Forex Card
- You do not need to run around to find money changers to encash your cheque.
- You need not bother about whether the purchase point will accept your cheque.
How to Apply for a Forex Card?
Most of the leading banks offer Forex Cards. You might have to pay a nominal fee of INR 100–150 for getting the card issued, or some banks also provide the card free of cost. You will have to fill out a simple form and submit your Know Your Customer (KYC) documents. Then you will have to remit an amount equivalent to the sum you want in foreign currency to the card provider. Once the documentation is complete, your card is loaded with the required amount.
- Research thoroughly about the features and benefits of different forex card providers. Some banks may charge hidden fees.
- Buy your forex card well in advance. It takes up to 24–72 working hours for a card to be loaded.
- Buy one card for yourself and one for your travel companion.
- Don’t store your card and PIN together.
- Don’t share your PIN and card details with anyone.
Enjoy a secure and hassle-free travel experience with your prepaid forex card—the smartest and most economical way to carry foreign currency.