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 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.
When it comes to convenience, forex cards have a clear advantage over carrying cash. Forex cards offer a hassle-free and secure way to manage your money while travelling. With a Forex card, you can load multiple currencies onto a single card, eliminating the need to carry different currencies or worry about currency conversion. It allows you to make purchases, dines at restaurants, and withdraw cash from ATMs in the local currency of your destination.
Forex cards, also known as travel cards or prepaid travel cards, are prepaid payment cards designed specifically for travellers. These cards are preloaded with a specific amount of foreign currency, allowing users to make purchases and withdraw cash in local currencies while abroad. Forex cards work by converting the loaded currency into the local currency at the prevailing exchange rate at the time of the transaction. They offer convenience, security, and protection against exchange rate fluctuations.
Effective from July 1st, 2023, certain financial activities related to currency notes, forex cards, overseas tour packages, and foreign outward remittances under the Liberalised Remittance Scheme (LRS), excluding those for education and medical purposes, will be subject to a 20% tax collected at source (TCS). Previously, a TCS rate of 5% was imposed on forex transactions exceeding INR 7 lakhs. It is crucial to highlight that, as of July 1st, 2023, the 20% TCS will be applicable without any threshold limit, irrespective of the transaction amount.
Interestingly, Forex cards also charge something called a 'Cross-currency fee". Read all about it in this blog.
Debit cards are a cost-effective alternative to forex cards for convenient money management while travelling. Access funds directly from your bank account, enjoy competitive exchange rates, and minimal transaction fees. Widely accepted worldwide, offering flexibility and accessibility. Check with your bank for any applicable fees or limits. A budget-friendly option for hassle-free travel.
A Forex debit card offers several advantages over traditional methods of accessing and exchanging foreign currencies. Its convenience lies in combining the functionality of a debit card with the ability to transact in multiple currencies, eliminating the need for carrying various currencies or visiting exchange offices. Cost savings are another benefit, as forex debit cards often have lower fees and competitive exchange rates compared to traditional currency exchange methods.
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 Debit card hereby following the steps here.
Here are the Card Replacement fees. It varies based on your account plan.
Salary Program/Infinite: All users can easily get a replacement card for ₹199+GST.
Plus/Standard: All users can easily get a replacement card for ₹499+GST.
Forex cards are a convenient and secure option for international travel compared to carrying cash. They offer easy transactions, wide acceptance, and the ability to hold multiple currencies. While some countries may still require cash, forex cards are suitable for most destinations. However, it's important to consider fees and tax changes associated with Forex cards.
Debit cards, particularly the Fi-Federal zero forex debit card, provide an affordable alternative to forex cards with no additional charges. Note: The zero forex feature is available only to users on select plans. They offer benefits such as security, currency control, and online transaction capabilities. In case of card loss, Fi Money offers a straightforward process for blocking and replacing the card.
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.
To purchase a forex card, it is mandatory for an individual to be a KYC-compliant Indian national. Non-resident Indians are not eligible to apply for this facility. Furthermore, minors above the age of 12 can be issued a forex card only if their parent or guardian signs the application form.
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 Fi-Federal 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.
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.
Travel cards are typically credit cards that allow you to get rewards and cashbacks on travel bookings and spends. On withdrawing using a travel 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.
