Travelling outside India requires a lot of preplanning to save you from unexpected and unnecessary expenses. One such planning needed before going abroad is to decide the medium of foreign payment, which can vary from cash to credit cards to debit cards and even forex cards designed specifically for travel purposes. Many people prefer credit cards while travelling abroad, but credit cards involve higher conversion charges. Now that the pandemic is about to end and people are planning travels all over again, this blog can be a lifesaver for you if you are planning a trip abroad. It talks about foreign exchange (forex) cards and their benefits over cash or credit cards.
What is a foreign exchange or forex card?
Foreign exchange cards are an inexpensive alternative to credit cards while travelling abroad. It does not involve charges you might incur while dealing with credit cards outside India. It is much like a regular debit or credit card. However, while dealing with Forex card, you are saved from mark-up charges and currency fluctuation risks or transaction fees while making transactions abroad.
Forex cards allow you to withdraw the local currency from the ATM anytime you want as it is preloaded with one or multiple currencies. Forex cards have been specifically designed for travelling purposes. There are many benefits of forex cards over credit or debit cards in a foreign country. They are ideal for multi-city travel as it does not involve cross-currency charges and can load up to 15 currencies to up to 21 currencies that can change from bank to bank.
Benefits of forex card over a credit card or cash
Save medium of carrying cash
Carrying cash in foreign currency can be risky. Holding cash in the form of a card saves you from the hassle and is also quite convenient. You can even lose cash, and there would be no way to recover it. However, that’s not the case with a forex card. Much like a credit card, in case you lose your card, you can block it immediately and can also get insured against theft.
Protection against forex rate risk
Forex rate changes every now and then. You are exposed to currency risk while dealing in foreign currency. So in case you transact using a credit card abroad, you are exposed to foreign rate fluctuation. But you can save yourself from this risk by transacting using a forex card. Since you preload the amount in a forex card, the amount gets locked up there and is immune to currency fluctuations.
Lower cash ATM withdrawal charges
A lower per-transaction fee compared to a credit card is one very significant advantage of a Forex card. A credit card charges you a transaction fee and withdrawal fee for making an international withdrawal. Forex card charges you with withdrawal charges per transaction, but it is lower than what is charged in credit cards.
Optimal for multi-country tours and frequent travellers
Forex cards can be an optimal choice for you if you are a frequent traveller. It can save you from a lot of charges and expenses. One of the charges involved in a foreign transaction is the mark-up fee. A credit card can charge you anywhere between 2-3.5%. In a forex card, you can load one or multiple currencies.
Thus zero charges for making an overseas transaction. The card allows you to transact in multiple currencies, depending on your current country. It also ensures you are against the risk of theft since you can get it insured.
Most banks offering forex cards provide insurance coverage with it. Since, while travelling abroad, you are prone to the risk of theft and losing your card, insurance coverage on the card can be one of the crucial criteria while deciding which card to take.
Travelling abroad can be a costly affair. You don’t want to add up the cost by choosing the wrong payment method. Planning your travel can save you from making unnecessary expenses. After reading this blog, you now know choosing a forex card over cash or the best credit cards in India can save you a lot of money and be an inexpensive travel method. Before choosing your bank, you must compare the offers and features offered by various banks to conclude.