Forex Card or Cash? Or should I use my credit card or debit card?
This is the question that hovers around before you leave for your next or first trip abroad. The answer is simple — do a little homework first to get the most for your money overseas. Get on the internet and research. Compare rates and charges, features & benefits of all the products on offer for your overseas trip.
In the past, Traveller’s cheques were the most popular way to carry your money when traveling abroad. Since the advent of Forex card & the growing popularity of Debit & Credit cards, TCs are no longer the preferable option. You have options and the most important thing is to know about these options. You must know your options inside out. Know the pros and cons of everything that is on offer.
So the question is what’s the best option for you? How can you avoid paying exorbitant exchange rates and charges? We have done a very comprehensive roundup of all the options available to you when you’re traveling abroad. Read on for answers to these questions
—Everything you need to buy can be purchased using a Forex Card
—Most recommended and safest form of carrying currency nowadays. Prepaid travel cards are pin protected, have configurable spending limits and are fully replaceable in case lost or stolen.
—Usually available at better rates than currency notes (cash) and traveler’s cheques.
—Better than credit/ debit cards – With Prepaid Travel cards you avoid paying the 2% to 5% transaction fee (Visa/ MasterCard, Issuing bank fees) that is charged when you use your international debit/ credit card. Also unlike credit, debit cards you aren’t susceptible to variable rates as forex loaded on your prepaid card is loaded at a fixed rate.
—Convenient – can be reloaded anytime. 24×7 customer care service.
—Always available – unlike foreign cash and traveler’s cheques, which are subject to availability, prepaid cards can be loaded with any amount of foreign currency at any time
—Travel cards (VISA or MasterCard) are accepted at most foreign establishments (hotels, stores etc.) without any charge.
—Ability to withdraw cash from Visa/MasterCard ATMs abroad.
—Comes with a free insurance cover
—None. Forex cards are the best way to carry foreign currency when traveling overseas
What you need to know:
—Do a research first about the features and benefits of different forex card providers. Some banks and exchangers charge hidden fees.
—Always buy your forex card well in advance. It can take up to 24-72 working hours for a card to be loaded with currency.
—You get the interbank exchange rate whenever you use your credit card abroad to purchase something.
—The currency conversion fees are typically lower than what you’ll pay for exchanging currency at a money changer or airport.
—Some credit cards do not charge any foreign transaction fees at all, not even the ones from Visa or MasterCard.
—Your credit card may not be accepted at every place like restaurants, stores, and even hotels because of lack of POS machines.
—Withdrawing cash using a credit card is an expensive proposition as your credit card issuer will impose a cash advancement fees. And the ATM owner will impose their own withdrawing charges.
—As soon as you return from your trip, you should immediately pay off the due balance. In case you miss it, there will be few extra charges like late fees and the accumulating interest.
Note: If you’re traveling to the US, mention that you have a chip & pin card as US credit cards have a magnetic strip. You need to explain to the merchant or salesperson that you have a chip & pin card
What You Need to Know:
—Inform your card issuer of your international travel plans in advance. Ask them to activate the international usage on your credit card. As any sudden international activity will trigger the fraud alert system of your card issuer. This alert automatically blocks your card.
—Always ask about the charges and fees for using your card internationally. Ask both in Rupees and the local currency. Banks keep changing policies without notice, so it is better to inform them before each trip.
—Ask for a phone number that you can call them from overseas in case your card is lost or stolen or there is an emergency.
—Before purchasing anything using your credit card, ask the merchant if it is possible they charge you in Indian rupees rather than the local currency. Your card issuer will waive the currency conversion fee. Beware though of your merchant charging you the conversion fee. Always be aware of the fees that apply to either option before you decide to pay.
—Always ask your hotel or car rental company whether they will hold a deposit on your card. Some merchants may put a hold for the amount of your total bill. This will leave you with less credit limit to use.
—Be aware of the double charging by merchants overseas. Travelers get charged twice for the same item or charged for an item that they did not purchase. Even though credit cards are protected from such usage, some credit card companies may refuse to acknowledge this. Keep a close eye on the receipts. If you see something, immediately inform your card issuer and dispute the charge.
—Withdrawing cash in local currency.
—Just like your credit card. you’ll get the same great interbank exchange rate when you make a purchase or a cash withdrawal with your debit card.
—With ATMs available all over the world, this is the most convenient way to get cash in the local currency but not the cheapest.
—Any cash withdrawal or a purchase will attract a conversion fee, foreign ATM withdrawal fees, and foreign transaction charge. For more information, Read Did you use your debit or credit card abroad?
—Your debit card is not protected against theft or loss like a forex card or your Credit card.
—Inform your bank immediately of the loss or theft of your card. Failure to inform may lead to extra charges.
What You Need to Know:
—Make sure your Debit card is connected to a MasterCard or Visa network. Debit cards of Cirrus or Maestro networks may not work everywhere.
—Some hotels and car rental services don’t accept Debit cards because of security reasons.
—And just like your credit card, don’t forget to inform your bank of your travel plans; as with credit cards, sudden international activity using your debit card could cause your account to be frozen.
—For the first few hours of your trip until you find an ATM.
—Always carry some cash in hand before you leave your home country for your immediate expenses like a cab fare or a meal at the airport. Because you don’t want to be left stranded at the airport in case ATM is not working.
—It is never safe to carry large amounts of cash because of the obvious reasons like robbery or kidnapping for money etc.
—Exchanging Indian rupee to cash would not get you the best exchange rate. You may also have to pay fees or commissions.
What You Need to Know:
—Always visit your local bank or research online for the best currency rates for cash. Start with your local bank as they may waive off charges and fees because you’re an account holder. They value this relationship.
—Take 10-20% of your total forex in cash. Ask for small denominations.
—Just an emergency backup because you may not find a secure alternative to cash.
—Maintainence of close relatives
—Safe and secure than cash because you can get a replacement TC within 24 hours.
—Unfavourable exchange rates when you compare it with other options.
—Because TCs are losing the popularity, very few merchants accept cheques for purchases these days.
— You’ll have to pay commissions, shipping charges and/or conversion fees to purchase and cash the checks.
What You Need to Know:
—Keep a note of your TCs serial numbers in a secure and safe place. In case you lose your TC, you can get a replacement using those numbers.
—Maintainence of Close relatives
—Easy to arrange – your bank will guide you through the process and you might even be able to make transfers from your mobile phone.
—Convenient – Banks have their branches in every city and town.
—Safe and secure.
—Wire transfers normally don’t get you favorable foreign exchange rate.
—Banks charge a fee which can be up to 5% at times.
—Not the fastest option, takes 4-6 business days.
What You Need to Know:
—Don’t transfer money abroad through money changers as they charge high fees.
—If you want the money transferred urgently, it will be expensive. The slower the service you choose, the more economical the price.
—You have other choices for sending money abroad like international postal money orders from the post office. They are time-consuming but cost-effective.
—BookMyForex is economical and quick. Your recipient will receive money within 12-48 working hours. Fund transfer processed in less than 30 minutes with no hidden fees or charges.
BookMyForex – India’s No.1 Forex Card Reseller.
You can spend precious hours visiting various banks offering all the above-mentioned services. And compare their products – or you can sit at home and visit BookMyForex online!
We give you the best deal i.e ‘live’ market or interbank rates rather than the made-up ‘daily’ rates offered by banks and other currency exchangers. You can “Freeze the Rate” your preferred rates for a maximum of 3 days. We give you Best Rate Guarantee on Travel Card rates. You need not pay any fee for either issuance or reload, the first time and each time. Easy reload facility from your loved ones back home ensures that your cash keeps flowing at all times.