How should you carry your foreign exchange | Mint – Mint

  • Travelers get all the convenience of transacting abroad when they carry a travel credit card or forex prepaid card

International travellers get all the convenience of transacting abroad when they carry a travel credit card or forex prepaid card or both. These cards allow them to spend at merchant outlets, book tickets, withdraw cash from ATMs, etc. This piece will help you understand the difference between travel credit cards and prepaid forex cards.
Travel credit cards: These cards usually cater to customers who spend heavily on travel. However, the card becomes expensive if travellers withdraw foreign currency from ATMs abroad. They have to pay finance charges, foreign currency transaction fees, and withdrawal fees.
Forex cards: A forex card is a pre-loaded foreign currency card that helps you make purchases, withdraw cash in foreign currency, and enables spending on your overseas travels.
Raj Khosla, founder and MD,, said forex cards attract a fee every time currency is reloaded or the card is renewed. “The other is a cross-currency charge. It applies when you spend in a currency different from the currency on the card,” said Khosla. However, you can choose to load it in the currency of the country you are travelling to or opt for a multi-currency forex card if you plan on travelling to different countries. As long as you make payments in the currency available on your forex card, no markup fee will be charged, making it the most economical option compared to a travel credit card.
Which is better?
Sachin Vasudeva, associate director and head of credit cards,, said that travel cards offer travel-focused benefits such as complimentary lounge access, air mile earnings, extra benefits on travel bookings, and more. However, most of these do not feature a low/any forex markup fee, which comes as a major disadvantage for international travellers. Even if a card is handsomely rewarding you for international transactions, the actual value will be nullified or even be in deficit if cross-currency markup charges apply at the usual rates.
Sudarshan Motwani, founder and CEO, BookMyForex, said, “Since forex cards are prepaid instruments for a specific value, your regular bank account/ credit card is not exposed to any risk. Moreover, in the case of forex cards, the exchange rates are locked on the day of loading, whereas credit cards accept the prevailing exchange rate as on the date of settlement. So, if the rates happen to be higher on that day, you will face extra loss.”
However, experts also suggest that one must keep travel credit cards as backup options.
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