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April 10, 2023 Forex Card Travel
10 minutes, 39 seconds Read

Forex Card Vs Cash Vs Debit Card – Which is the Best Option for Travelling?

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Forex Card or Cash? Credit card or Debit card? What should you use when abroad? What’s the cheapest and most convenient option among these? These are the questions that hover around before anyone leaves for their trip abroad. The answer is simple — do a little homework first to get the most for your money overseas. Prior to your trip overseas, you should do some research and compare rates and charges, features & benefits of all these options.

In the past, Traveller’s cheques or currency notes were the most popular ways to carry money when traveling abroad. Cash is still a viable option, but you now have the option of using Forex cards, and debit/credit cards to make payments overseas.

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.

The following comparison table provides answers to all your questions:

 

Parameters 
Forex Card
Cash
Credit/Debit Card
Best ForBuying anything under the sun.The initial hours of your trip until you find an ATM.• Airline tickets
• Hotel bills
• Car rentals
• Restaurant meals
Advantages






• Ability to freeze exchange rates.
• Up to 7% savings over debit cards.
• Quick deactivation process and free insurance cover.
• Remote reloading facility.
• Support for 14 foreign currencies.
• Highly efficient expense tracking mechanism.
• Solid security features.
• Best for places that only accept hard cash.
• Tracking spendings becomes easier.
• Benefit of interbank exchange rates.
• Nominal currency conversion charges.
• Decent security features.
• Slim and lightweight design.
Disadvantages



Nil• Vulnerable to theft.
• Difficult to carry around.
• Value could decline due to fluctuations.
• Hefty charges if used for currency exchange.
• Hard to get lost or stolen cash back.
• High foreign transaction fees.
• Not accepted everywhere in the world.
• Hefty withdrawal fees

Forex Card

Best for:

—Everything you need to buy can be purchased using a Forex Card

Advantages:

—Most recommended and safest form of carrying currency: Prepaid travel cards are pin protected, have configurable spending limits and are fully replaceable in case lost or stolen.

—At Interbank rates: Forex Card are Usually available at better rates than currency notes (cash) and traveler’s cheques.

-Multi-currency card: The prepaid forex card can be loaded with different currencies all at once.

—Cheaper 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.

—No Rate fluctuations: Unlike credit or debit cards you aren’t susceptible to variable rates as forex loaded on your prepaid card is loaded at a fixed rate.

—Easy loading: – unlike foreign cash and traveler’s cheques, which are subject to availability, prepaid forex cards can be loaded with any amount of foreign currency at any time

—Smooth Reload Process: Forex cards can be reloaded anytime and forex providers offer 24×7 customer care service support.

—Accepted Everywhere: Forex Travel cards are accepted at most foreign establishments (hotels, stores, online payments, etc.)

—Cash Withdrawal: In comparison with debit/credit cards, which may charge you about 3% for ATM withdrawals, a Forex card usually has minimal ATM withdrawal fees.

—Travel Insurance: The prepaid multicurrency forex card comes with free insurance coverage too.

Disadvantages:

—None. Forex cards are the best way to carry foreign currency when traveling overseas

Factors to Consider:

—There are some banks and forex platforms that charge hidden markup fees. Find out what each forex card provider offers in terms of features, benefits, fees and other charges.

—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.

Find out whether benefits like free replacement of cards, backup cards, insurance cover, and 24/7 emergency assistance helpline are available along with the forex card.

Credit Cards

Best for:

—Airline tickets

—Hotel bills

—Car rentals

—Restaurant meals.

Advantages:

—Convenient Option: Credit card works the same as a forex card and is a convenient choice than currency notes when it comes to carrying currency.

—Better rates than at airports: The currency conversion fees are typically lower than what you’ll pay for exchanging currency at a money changer or airport.

—Good discounts: A foreign currency transaction fee of 1-3% is charged by MasterCard and Visa. However, some credit cards may offer discounts and do not charge any foreign transaction fees.

—Cashback & rewards: You may earn cashback when you book airline tickets, rentals, and hotels using a credit card.

Disadvantages:

—Not accepted everywhere: Your credit card may not be accepted at every place like restaurants, stores, and even hotels because of lack of POS machines.

—Hefty charges on Cash Withdrawal: 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.

—High fees/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

 Factors to Consider:

—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 for them to charge you in Indian rupees rather than the local currency. Your card issuer will waive the currency 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 on 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.

Best for:

—Withdrawing cash in local currency.

Advantages:

—Convenient Option: Debit card just like a credit card is a convenient choice over currency notes when it comes to carrying currency.

—Easy cash withdrawal: With ATMs available all over the world, this is the most convenient way to get cash in the local currency but not the cheapest.

—Usage and acceptability: Debit cards can be used at a wide variety of merchant stores abroad.

Disadvantages:

—High Fees & Charges: 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?

—Not a safer option: Your debit card is not protected against theft or loss like a forex card or your Credit card.

—No spend management- As compared to a forex card, a debit card doesn’t allow you to control your spending.

Factors to Consider:

—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.So, it is always better to carry some amount of money in form of currency notes.

—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.

Cash

Best for:

—For the first few hours of your trip until you find an ATM.

Advantages:

—Acceptability: A major advantage of currency notes is that they are accepted everywhere.

—Best for immediate expenses during the first few hours of arrival: 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. you don’t want to be left stranded at the airport in case ATM is not working.

Disadvantages:

—There is no security: It is never safe to carry large amounts of cash because of the obvious reasons like robbery or kidnapping for money etc.

—No Fixed Exchange Rate: Foreign currency notes value varies according to the exchange rate of the day.

Factors to Consider:

—Always visit your local bank or research online for the best currency rates for cash. Start with your local bank or online forex platforms as they may waive off charges and fees and will offer best exchange rate along with great customer service support.

You must only take 10-20% of your total forex in cash. Also, it is better to ask for small denominations.

Traveller’s Cheques

Best for:

—Just an emergency backup because you may not find a secure alternative to cash.

—Tuition Fees

—Maintainence of close relatives

—Investment purposes

Advantages:

—Safer than cash: It is safer than cash because you can get a replacement TC within 24 hours.

Disadvantages:

—Poor Exchange Rate:  You get Unfavourable exchange rates when you compare it with other options.

—Not Acceptable everywhere: Because TCs are losing the popularity, very few merchants accept cheques for purchases these days.

— High fees and charges: You’ll have to pay commissions, shipping charges and/or conversion fees to purchase and cash the checks.

Factors to Consider:

—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.

Takeaway

Be it embarking on holiday or visiting relatives, foreign trips entail a lot of preparation and planning. Travelling with hard cash and debit/credit cards might seem appealing at first glance. However, these outdated mediums of carrying money can lead to inconvenience in addition to taking a toll on your pocket.

Gaining ground among frequent travelers, forex cards have emerged as the safest payment method in the 21st century. Guaranteeing up to 6.5% savings over credit/debit cards and up to 1% savings on global INR Cards , forex cards can work wonders for fulfilling your monetary needs abroad. Be it paying at a local store or doing ATM withdrawals, the functionalities of forex cards will never disappoint you.

Leading providers offer dedicated smartphone applications to give you full control over your forex card in one place. Besides keeping unnecessary charges at bay, forex cards can make you eligible for claiming discounts at various stores. So, if safety and convenience are your top most priorities, make sure you invest in a prepaid forex card to handle your expenses abroad without any hassles.

BookMyForex – Leading Online Forex Platform

You don’t have to spend time visiting various banks offering forex cards when you can get the best forex card online at BookMyForex.

We give you the best rate i.e ‘live’ market or interbank rates rather than the made-up ‘daily’ rates offered by banks and other currency exchangers. In other words, you can exchange currencies for free. As a prepaid card, once loaded, your balance in the foreign currency remains intact, so you don’t need to worry about forex volatility with our forex card. Moreover, your order can be placed online in just 5 minutes and delivered on the same day to your doorstep. The best part is you won’t be charged any fees for issuing, reloading, unloading, or maintaining the card. 

Related Resources:

What is Forex Card? Complete Guide

Benefits of Forex Card for Students and Travellers

Best Forex Cards in India

How to Apply for Forex Card? Steps & Documents Required

How to Reload & Unload Forex Card? Steps & Documents Required

Charges and Usage Limits of Forex Card

Tips for Using a Forex Card While Travelling

Forex Card FAQs

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