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Forex Cards vs Cash for your International Trip. A Comparison.

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Forex Cards vs Cash for your International Trip. A Comparison.

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By the time you’re reading this, lockdowns are probably a thing of the past. International travel is back with a vengeance, and that also means having to carry a bunch of foreign currency. The wiser thing to do of course is to carry a pre-loaded forex card that can be used to pay in the currency of the country you’re travelling to. But before we unpack the comparisons of carrying foreign cash against forex cards, here’s a quick primer on forex.

What is forex?

Foreign Exchange, aka Forex, is used in many contexts. Most often, in the case of currency trading. But for this discussion, forex refers to the foreign currency of the country you visit. Say you're visiting Germany, you can buy a forex card that has, say, 500 Euros in it. It's obviously safer, because it's protected by a PIN. So even if your wallet gets lost abroad (which can be pretty scary), your money is not lost entirely.

Forex cards vs cash - which is more convenient?

  • It is a type of prepaid credit card in which you can add foreign currency before leaving India. 
  • It is easy to handle, safer than carrying cash, and is accepted almost everywhere internationally. 
  • It can be swiped to make purchases or withdraw money from an ATM. You no longer need to travel with large amounts of cash and hide them in traveller’s pouches or the inner lining of a suitcase.
  • You can use a multi-currency forex card that works in many countries.

So, we don't ever need cash again?

Not exactly. This depends on the country you're travelling to. Say, you're visiting Europe, then it's cards all the way. Nearly every store or merchant accepts card payments without any fuss. But if you're in a country like Sri Lanka, then you might want to carry some cash with you, because not every store is equipped to process digital payments. But it's best you do your own research on this.

How Forex Cards work

Forex cards can either be single currency or multi-currency cards. Multi-currency cards let you load different currencies into the same card. For instance, you can add Euro as well as USD into a forex card, or just Euros into a single-currency card. Here are a couple of other things to keep in mind while using forex cards.

Getting a Forex Card

You can apply for a Forex Card through your Bank. This involves filling the required forms given on the bank's website and paying the fees, after which, the card will be delivered home to you.

Forex Card Issuing Fees

If you're getting a new card from your bank, you will be charged a one-time fee for the card.

Cross-currency Transactions

This means spending in USD when you actually have EUR (Euro) on your card. Most banks in India charge you a cross-currency transaction fee.

Cash Withdrawal

As you may have read above, in some cases, you might need to carry cash with you, should you be in a situation where a store or vendor does not have a card machine for you to swipe. You can withdraw local currency from the nearest ATM, but most banks charge you for this.

Debit Cards: The Affordable Alternative to Forex Cards?

As we've seen, Forex Cards are a pretty convenient way to carry foreign currency when you travel. But that's not the only way. There are others:

Credit Cards as Forex Cards

If you have a credit card, you can in fact use it to shop abroad. This requires no loading of forex on the card, and you can spend in any currency. But here's the catch - it's expensive! This is because unlike using your credit card in India, which is free (provided you pay your bill on time), your bank is essentially lending you forex. And this comes with heavy fees slapped on them.

Assuming you have a Visa credit card, you will be charged a 1% fee on top of which your bank takes about 3% on every transaction. Pretty huge, right? But it's not a bad idea in cases of absolute emergencies - it's better than having no forex at all. So use it sparingly, or never.

Debit Cards as Forex Cards

With the exception of a few debit cards like the Fi Money Debit Card that you get for free with your Fi Money Savings account, most debit cards charge you fees that are similar (if not lesser) to credit card usage. On Fi Money, your debit card can be used abroad, and without any additional charges (called forex mark-ups).

The Fi Money Zero Forex Debit Card and its Benefits

The Fi Money debit card is an excellent travelling companion. The best part about it, like you might have just read, is that there are no forex charges! Neither are there any annual membership or account maintenance charges. Just make sure to have enough money in your Fi Savings Account before you travel, and off we go.

Lost your Fi Money debit card? Now what?

Losing your card abroad can be stressful. But take a deep breath, and open your Fi app. Head over to your debit card (you can do this by tapping on the card icon in the app) and go ahead and freeze the card. This will simply block your card from being used by anyone else. If you need a new card, go ahead and request a new Fi Debit card hereby following the steps here.

Frequently Asked Questions

1. How much does a forex card cost?

Most forex cards come with a one-time joining fee. This could range anywhere from ₹300 to a few thousand, depending on the benefits that are being offered by the card. This cost goes towards acquiring the card, and it’s a one-time cost. After which, you only need to reload the card with more forex as and when you’re travelling.

On Fi Money, your debit card can be used as a forex card. There are no charges for using it whatsoever, and all you need to do is have INR in your Fi account. That way, you are not committed to spending all that forex on your trip abroad. You can only use as much as you need, and the rest is still available to you as INR for you to use in India upon your return.

2. Who is eligible for a forex card?

Any Indian citizen can buy forex for up to $10,000 without permission from the RBI. Most banks or issuing bodies ask for your passport number to be able to release forex to you. But according to the RBI, you don’t need to have your passport endorsed to obtain forex. 

That aside, banks need your address so they can courier your forex card after it has been issued. 

3. Which card is best for forex?

There are many forex cards that give you reasonably good offers along with your forex, for a one-time joining fee. You’re also charged fees for using the forex card at ATMs to withdraw cash or check your statement. On Fi Money, your Debit Card works pretty much like a forex card. But here’s where it scores better - you are charged absolutely no joining fee or other fees for using the card for forex payments. There’s a ₹100 charge for withdrawing cash from ATMs. 

What makes your Fi Money debit card better than a forex card is that you have to commit to finishing up the forex you’ve loaded onto your forex card. On Fi Money, however, each time you swipe your card, you’re simply paying that day’s exchange rate between Indian Rupees and the local currency. Once you’re back in India, you have the balance amount available in Indian Rupees to spend in India.

4. Are forex cards worth it?

Using a Forex card on an international trip comes with less or no transaction fees as compared to a debit or a credit card, and their conversion charges are lesser than converting your money into cash. For many international travellers, Forex cards are worth it while taking international trips. Fi.Money offers a zero forex card which can be used for seamless transactions abroad, check out more about Fi's zero forex here.

5. Is a travel card and a forex card the same?

Travel cards are typically credit cards that allow you to get rewards and cashbacks on travel bookings and spends. On withdrawing using a trvael card, you will be charged transaction fees as well. A Forex card is a a pre-paid card that allows you to have less or no transaction fees and less conversion charges.

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