Why You Should Buy a Forex Card for Your Next Foreign Holiday

When you plan on travelling to a foreign destination, foreign exchange rate is among the first things to consider. There has been much debate on how much money you should carry to a foreign country and in what mode. Plastic money, like international credit cards and debit cards, are quite popular among travellers but they have the drawback of high fees and charges over and above the exchange rate. The most convenient and inexpensive way to carry money abroad is a Forex Card.

A forex card is a prepaid travel card offered by banks to people who are travelling to one or more international destinations. As per the user’s needs, the card can be loaded with a single foreign currency or multiple currencies.

How a Forex Card Scores Over Credit/Debit Card?

If you are planning to travel to a foreign destination, here is why you must consider prepaid travel cards for carrying money-

1. Wide Acceptance- Forex cards are not only accepted at fancy stores and restaurants but also at smaller shops which makes it a perfect option for tourists.
2. Load Multiple Currencies- If you are travelling to multiple countries in a single trip, you can buy a multi-currency forex card. On this card, you can load the currencies of all the countries you will be visiting.
3. Inexpensive- Prepaid travel cards provide a hedge against currency fluctuation. This means the amount loaded on the card will be exchanged at the prevailing rate of that day. Users can buy a forex card on a day when the rates are comparatively lower in order to get maximum benefit.
4. Lower Charges- Prepaid travel cards carry lower fees and charges as compared to internationally accepted credit/debit cards. One such charge is the foreign exchange mark-up fee. Credit/debit cards charge a fee of 2% to 5% as the forex mark-up fee whereas forex cards do not attract such charges.
5. Safe- Carrying a card is always safer than carrying wads of cash. Also, if you lose the card in case of loss or theft, you can call your bank’s customer care and get it blocked instantly to ensure that nobody can misuse it. A number of banks also offer the facility of card replacement under such circumstances.

Things to Keep in Mind when Buying a Forex Card

Much like other financial products, forex cards also come with a set of terms and conditions. Hence, it is important to choose a travel card smartly so that you do not have to regret later. Here are a few points that you must keep in mind at the time of buying a forex card.

1- Understand the Fees and Charges- There are several fees and charges associated with these cards such as-

• Card issuance fee
• Balance Enquiry Charges
• Replacement Card Fee
• Statement Request Charges
• Cross Currency Mark-up Charges
• International SMS Alert Charges
• Charge Slip Retrieval Charges
• Inactivity Fees

At the time of getting a forex card, you should ask your bank about such charges to ensure that you do not end up paying more by using it. If you think the charges are too high, consider going to a different bank. The table given below shows some charges levied by HDFC Bank, ICICI Bank and Axis Bank on their forex cards.

2- Swipe in the Same Currency as Loaded- When you are swiping your forex card at a merchant store, make sure that the payment is made in the same currency as you have loaded. For example, if you have loaded your card with US Dollars but the payment is made in Indian Rupee, then you will incur significant cross currency charges. Also, when you are using your travel card at an ATM, select the credit card option as there would be no option for ‘Forex Card’.

3- Keep your card safe- Skimming is one of the most common types of fraud on cards. This means someone clones your card and when he deceitfully makes the payment, it will be charged to your account. Hence, it is important to keep your card safe from such activities. Do not hand over your card to anyone else for swiping. Many banks are launching contactless forex cards which offer greater security as you can ‘tap and pay’.

4- Check Insurance on Your Card- Like credit cards, forex cards also offer some insurance cover. There may be insurance protecting you against personal accident, loss of checked baggage at the airport and against credit card fraud. You must confirm with your bank about what type of insurance cover is being offered on your card.

Should You Travel Solely on Forex Cards?

It is not advisable to carry just Forex Cards for your international travel. You should also carry some forex cash wherever you are going. Indian currency is not widely accepted across nations so it is safer to carry some cash to help you in case of emergency. Plan your expenses in a way that 80% is spent through forex card and 20% goes out in the form of cash. For cash conversion, you should go to a money changer in India as it can get comparatively costlier to exchange it at the airport.

Forex cards are, by far, the most convenient and economical method of carrying foreign currency. You do not need to be the customer of a bank to buy a forex card. Simply walk into a bank branch with cash and buy a forex card for the currency you want equivalent to its value in Indian Rupee.