Last Updated: Tuesday, 17th Aug’21
There is no denying that embarking on a trip to popular foreign destinations can pave the way for a fun-filled experience. Be it a business trip or a family holiday, you must plan in advance how you are going to pay for your expenses abroad. A majority of people are of the opinion that using Indian debit card abroad is the best way to make international payments.
Such notions stem from lack of awareness about the hefty service charges that are associated with debit/credit cards. Debit cards can come in handy for paying at shops, hotels, restaurants and merchant outlets across the globe. Above all, they can be used for withdrawing money when the need for hard cash arises. But little do people realize that frequent use of debit cards in international cities can take a heavy toll on their pockets in the long run.
It must also be noted that debit/credit cards are at a higher risk of getting stolen. This is why you should always carry some money in the form of banknotes in case there is an emergency or you get locked out of accessing your debit card abroad. In this blog, we will acquaint you with everything you should know about using your Indian debit card in foreign countries.
Common Charges Associated With International Debit Card Usage
Here are some charges you need to be aware of before using your debit/credit card for making payments overseas.
1. Currency conversion charges: When you swipe your debit card overseas, the process of currency conversion takes place as the balance in your card is reflected in INR. The Indian Rupee is converted to the currency of the foreign country and conversion charges are levied for the same. Currently, the currency conversion charges range between 1-2% of the total transaction amount.
2. ATM withdrawal fees: Most ATMs abroad charge a flat withdrawal fee every time you use your debit card to withdraw money. The fees may go up to 4% of the transaction’s value. However, be prepared to shell out extra some bucks as the ATM withdrawal charges are not inclusive of GST.
3. Foreign transaction charges: The foreign transaction charges are levied every time you use your debit card abroad, be it at a POS terminal or an ATM. The overseas transaction charges may fall anywhere between 2.5-3.5%. In addition to these transaction charges, debit card usage may also be subject to a foreign currency markup fee of 3.5% which is again charged by the debit/credit card issuer.
Things to Keep in Mind When Carrying Your Debit Card Abroad
Given below are the 4 most important things you should keep in mind before carrying your debit card overseas.
1. Research the networks supported by your debit card: The easiest way to ward off international ATM access fees is to opt for a debit card that supports a large array of networks. If your debit card provider is a participant in an international banking network like Global ATM Alliance, it would waive off foreign ATM fees it normally charges. Similarly, Allpoint is another surcharge-free interbank network. It offers fee-free access at more than 55,000 ATMs across the globe. All you have to do is to conduct an online research to find out about the networks supported by your bank.
The good news is that both MasterCard and Visa allow card holders to remotely locate ATMs in countries which they are planning to visit in the coming time. Moreover, anyone having basic internet knowledge can ascertain the availability of ATMs in international cities using the online locator absolutely free of cost.
2. Inform your bank of your international trip beforehand: It has been seen that people who do not share their travel plans with their banks end up bearing the embarrassment of declined transactions abroad. You must get in touch with your bank representatives and inform them of your international trip a few weeks prior to your departure. Tell them that you are going to be using debit card in another country and confirm whether it is enabled for international usage or not. Don’t forget to inquire about overseas transaction charges and conversion fees which you may have to incur.
Take note that such charges vary dramatically from one bank to another. Inquiring about these matters in advance will help you avoid any unpleasant surprises during your international trip. The biggest advantage of informing your bank is that you will be protected against fraud. In the unfortunate event of your debit card getting lost, you can notify your bank and it will immediately block your account to prevent unauthorized access to funds.
3. Beware of the DCC scam: Beware of the Dynamic Currency Conversion (DCC) scam which is a predatory tactic employed by merchants for making additional profits. They talk uninformed travelers into accepting the deal on the pretext of offering the cheapest rates. If you shop overseas and the vendor offers you to pay in your home currency, it is a telltale sign you are on the verge of being duped. In the DCC scam, unfavorable rates and huge margins are applied on currency conversion, which eventually result in higher credit card charges without you even realizing it.
4. See if your bank offers reimbursement for ATM fees: It goes without saying that hefty ATM fees can add to your travel expenses significantly. However, there is a good chance that your bank offers accounts that provide reimbursements for international ATM withdrawal charges. So, try to approach your bank and ask if it can reimburse some percentage of ATM fees to further increase your savings.
What is the Best Substitute for Debit/Credit Card
When it comes to visiting international destinations, there is a wide range of expenses you need to take care of.
Forex cards are accepted across 30 million stores globally and they are a perfect substitute for your debit/credit card. Here, we have listed the top 3 advantages of using forex cards for international travel.
- Zero reload charges: Running out of money is one of the most common problems faced by international travelers. Forex cards are in high demand among international travelers they offer upto 6.5% savings over credit/debit cards. You can reload your forex card from the comfort of your couch at zero reloading charges.
- Multi-currency support: Unlike your regular debit cards, travel forex cards offer multi-currency support. They can be loaded with up to 16 different types of currencies concurrently. This can save your precious time as you will not have to reload your forex card each time you travel to a different country.
- Solid PIN protection: There is a widespread misconception that forex cards lack high-end security features. On the contrary, forex cards come backed with an unbreakable fraud prevention system. Their security is further reinforced by solid PIN protection.
- Safe from currency fluctuations: What makes forex cards stand out from debit cards is the fact that they are not subject to currency fluctuations in the market. Unlike debit cards, travel forex cards can be loaded with currency at fixed rates. Once a foreign currency is filled in your forex card, there can be no change to the exchange rate at which it was originally loaded.
Traveling to international destinations is a sure shot way to break away from the ordinary and broaden your horizons. Since overseas travel involves various costs, choosing the right mode of payment becomes a matter of high importance. While the lure of earning reward points might make credit cards seem appealing, the hidden transactional charges that follow their usage can prove quite costly.
So, should you use Indian debit card abroad instead of a credit card to boost savings? No matter which card you choose, you will be subject to hefty fees that will negatively impact your budget. If you do not want to get slammed with exorbitant charges abroad, we would recommend you get a prepaid forex card from Bookmyforex for your upcoming trip.
Also Read: How To Apply For a Forex Card?
Let us take a look at some of the most frequently asked questions about international debit/credit card usage.
1. Do international debit cards have a daily spending and withdrawal limit?
Yes, all debit cards come with a daily spending and withdrawal limit. If you exceed the daily limit, your debit card will be rendered nonfunctional for further transactions on that given day.
2. Will I have to pay extra from my pocket in case my debit card gets lost?
While you normally won’t have to pay extra, some banks might charge a replacement fee for stolen or lost cards. But there is no need to worry as most leading banks offer coverage on their debit cards to give you peace of mind in case something unfortunate happens.
3. How do I determine the exchange rate for every debit card transaction?
It must be taken into consideration that exchange rates fluctuate on a regular basis based on the market performance. This simply means that you will have to check the exchange rate every time you make a debit card transaction abroad.
4. Will my international debit card support all foreign currencies?
Most international debit cards offer support for only a limited number of foreign currencies. You should confirm with your bank beforehand whether your debit card can be used for international transactions and withdrawals in the country you are visiting.