Manage Money

Best Forex Travel Card

Traveling and exploring different countries is indeed enticing. However, how do you plan to carry foreign currency? How much of an amount should you take when you're visiting an unknown land? What if you are visiting multiple countries? Such questions are bound to crop up. Using cash might seem the obvious way, but is it the best and safest option? 

Apart from hard cash, there are a few other ways to carry liquid cash and safeguard money.  Forex travel cards, traveler's cheques, and plastic money in the form of debit cards, credit cards, and prepaid travel cards are some notable examples. Of these, a forex travel card is undoubtedly the best way to keep your money safe during your stints as an overseas adventurer.

What Is a Forex Prepaid Travel Card?

A prepaid forex card enables you to load multiple currencies on a single card ( Around the world in 80 days? No big deal). However, if you are visiting just one country, you can also choose to load a single currency. The forex cards will not only save you time, but can also spare you the pain of calculating conversion charges when you should be enjoying your vacation.

You can load up to INR 2.5 lakh per annum per card according to the guidelines of the Liberalised Remittance Scheme (LRS) notified by RBI. However, each individual can carry only one forex card while traveling.

Why Forex Travel Cards?

Well, you can always use your credit card during your overseas travel, but you would have to pay a whopping amount for conversion charges, additional ATM fee, etc. You can rest assured that you are going to burn a hole in your pocket by paying more than a cumulative percentage of 7% over the exchange. Are you willing to do that - especially when you can avoid it?

A prepaid forex travel card is the ideal solution that can help you save some extra bucks. Forex travel cards are one of the safest options, especially as compared to carrying a bagful of cash. They are enabled with PIN protection and can be swiped for all sorts of transactions.

How Do Forex Travel Cards Work?

Forex travel cards serve as a boon for travelers as they need not carry cash at all. But how does it work?

To understand how a forex travel card works, let's go through an example.Let’s say you are traveling to the UAE; you would need to have money in Dirhams. A prepaid forex travel card gives you the option to carry any foreign currency around the world. Hence, your prepaid travel card will be loaded with a certain amount of Dirhams, and you can use the card at all international stores and retailers that accept the concerned card network (mostly Visa or Mastercard).

You can also use the card at ATMs to withdraw cash. In fact, you also have the option to withdraw the entire amount of currency loaded on the card in cash from an ATM. However, you should be aware that you will be charged if the transaction currency is different from the currency loaded in the card.

What Are the Forex Card Charges That I Need to Be Aware Of?

It is essential to be aware of the various charges associated with using a forex card. Thus, once the card is loaded with money, you wouldn’t have to worry about the conversion charges anymore. However, the charges vary from one issuer to another.

Here are a few of the charges based on usage:

  1. Cash withdrawal charge - There's a cost levied when you swipe the forex card at ATMs to withdraw cash.

  2. Balance inquiry charge - You would be charged for checking your balance at an ATM.

  3. Monthly International SMS alert charge - There's a charge levied if you want to receive any SMS alerts when you're abroad.

  4. Domestic replacement card fee - This charge is for getting your card replaced while you are in India.

  5. International replacement card fee - If by chance, your card is misplaced or stolen,  you would incur a charge for replacement.

  6. Statement request charge - Requesting for statements can also incur expenses for you.

  7. Charge slip retrieval charge - This charge is levied on you for getting a transaction slip at any ATM.

  8. Cross currency markup charge - You would have to bear the cost if the transaction currency is different from the one loaded on the card. It would be labeled as a 'cross currency markup,' and would be around 3-3.5% of the transaction amount. 

  9. Inactivity Fees - Absence or inactivity is defined when there is no activity on the forex card for a consecutive period of more than six months. A charge is levied on the same.

Before Purchasing a Forex Travel Card...

Here are a couple of things you should be aware of before buying a forex travel card:

  1. Daily limit: Some forex cards have a daily limit on usage. Check with the issuer to know the exact amount that you can withdraw or spend in a day.

  2. 24-hour helpline: Have the helpline number of the card provider at your disposal to help yourself out when you run into a tricky situation.

While Using a Forex Travel Card…

Keep these aspects in mind at all times:

Safety: Safety and security is of utmost importance, because cases of international fraud on cards are not very uncommon. One of the ways to safeguard your hard-earned money would be to swipe the card right in front of your eyes. Never let it be out of sight. Such small steps would reduce the risk of cloning of your card.

Be aware of where you swipe: The forex travel cards are loaded with foreign currency, which is why you shouldn't swipe it at a place where the transaction's value is in INR. If that happens, you would end up paying conversion charges.

Choose the right option at ATMs: While in an ATM or merchant outlet, always select the credit card option, as then you wouldn't have to pay any separate charges for forex cards.

After returning from your trip: While returning from your trip, make sure to check your balance on the card, as holding amounts exceeding $2,000 is prohibited as per RBI laws. If you get caught, you would have to pay a hefty price, or could even be put behind bars.

Insurance cover: There are different types of insurance coverage made available for these forex cards; make sure to confirm with the issuer if it comes with specific coverage or not. Coverages for protection against misuse of lost or counterfeited card, personal accident insurance, and loss of checked-in baggage cover are mostly provided on most forex cards. Some forex cards also cover ATM assault and robbery, including the expenses incurred for medical treatment.

To Sum Up

Planning your finances during overseas travel is a critical task, since the Indian rupee is not a widely accepted currency. Research thoroughly before purchasing a forex card; and most importantly, understand the terms and conditions of using such travel cards. 

It is essential to understand how you can save a lot with these cards by cutting down on various charges that are otherwise involved in credit card usage. As they are prepaid, rest assured that they don't affect your credit score.

Traveling is fun and helps you unwind. Forex travel cards not only save you money but also keep all the stress of currency exchange at bay, making them an ideal companion for travel abroad. So, a little research before planning will help you cut down costs as well as enable you to explore more options.

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