Forex card or cash? Or should I use a credit or debit card? These are the most prominent questions that pop in our heads before we head out for an international trip. The answer is simple. Do your homework first to get the most out of your money abroad. Go to the internet and do some research. Compare prices and rates, features, and benefits of all products offered for international travel.
Traveler’s checks(TC) used to be the most common method of carrying money when traveling abroad. With the advent of forex cards and the growing popularity of debit and credit cards, TC is no longer the preferred option. There are other options, but you need to understand those options in depth. One of the most popular options for traveling abroad with the peace of mind regarding your transactions is the forex card.
What is a forex card?
Forex cards are usually denominated in multiple foreign currencies. US Dollars, Australian Dollars, British Pounds, Euros, Dirhams, and Singapore Dollars are some of the foreign currencies that can be used with Forex Cards.
For other currencies, most countries accept, so you can still use your US dollar-denominated card. Most banks issue foreign exchange cards.
What is an International Debit card?
Global International debit cards, on the other hand, are loaded with domestic currencies. These cards can be used in multiple countries.
Niyo Global offers the best international debit cards. To use these cards, the customer needs to open a bank account with a partner bank and register through their website for ease of use. Users do not need a savings account to apply for a prepaid travel card.
Foreign Exchange -Understanding the Benefits of Forex Cards
If you have plans of traveling abroad, an integral part of your entire travel plan should be keeping some foreign currency notes in your wallet. If you feel carrying currency a major risk, you can use a forex card and load the same with the foreign currency value to ensure transactions abroad.
Usually, forex cards do not charge any transaction fee when you use them at merchant outlets abroad. This makes them a great alternative to credit and debit cards. You should use forex cards only for swiping at POS (Point of Sale) and avoid its usage for withdrawing cash out of ATMs. You can search for options like Niyo Global offering zero markup for conversion while issuing forex cards.
The comparison between forex cards and international debit cards –
| Features | Forex Card | International Debit Card |
|---|---|---|
| Best for buying | Anything | • 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. | • Benefit of interbank exchange rates.• Transaction fees that are negligible in light of currency fluctuations.• Acceptable safety measures.• Super-minimalist and featherweight construction. |
| Disadvantages | None | • High foreign transaction fees.• Not accepted everywhere in the world.• Hefty withdrawal fees |
As it is clear from the above tabular description, forex cards are way more advantageous and beneficial than international debit cards.
- Volatility – Forex cards offer protection against price fluctuations. With a forex card, your forex course is locked as soon as you load your money. For example, if you top up your FX card with USD at 79 rupees, it will not help if the rupee drops to 82 rupees per USD while traveling abroad. However, the International debit Card does not have a fixed exchange rate. Foreign exchange rates are applied at the real-time moment of your card swipe transaction while traveling abroad. For example, suppose you have an International debit Card and you transact in US Dollars, Australian Dollars, or other foreign currencies while traveling. In that case, currency fluctuations mean that you have no control over the exchange rate at the time.
- Cost and charges – The International debit Card has a low currency conversion fee of 1-1.5 percent compared to 5-6 percent for credit and debit cards and 1-4 percent for foreign exchange cards. Once back in India, you can use the same prepaid card at local ATMs and merchants. There are no conversion fees. Since it is a domestic card, there is no need to worry about exchange rate fluctuations. Experts warn travelers not to be misled by claims of “no fees’ ‘ by some rupee travel card merchants. You will have to pay a fee to the neo-bank for opening a bank account and signing up for a card. Some non banks advertise ‘zero markup fee’ global rupee cards, but remember that these cards are based on Visa rates, not interbank rates. Forex cards usually have a markup for interbank rates, and banks charge around 2-3% markup, but Global Niyo travel card does not offer a forex markup for interbank rates. If you go abroad and use the International debit Card to withdraw cash from ATMs, your bank will charge exorbitant fees for such foreign transactions. In contrast, forex card ATM withdrawal fees are fixed and transparent, around $2 per withdrawal.
- Customer experience – Customer service plays an important role when choosing a forex card or a global rupee travel card. Banks and fintechs that have been in the field for more than 5 years are well versed in card offerings Banks and fintechs that, based on their experience, have the breadth and expertise to handle customer complaints and escalations. you may have. Timely support from your card issuer is important when traveling internationally via multiple communication channels. This is where bank-issued forex cards typically score against neobank global rupee cards. If you run into trouble abroad, a long-standing relationship with a bank that has a savings account and perhaps a forex card may help more quickly.
How are forex cards better than international debit cards –
- When traveling abroad, you can use foreign currency notes or pay directly in foreign currency using international debit cards, credit cards, or foreign exchange cards. However, according to experts, forex cards are relatively efficient among all the available options, as they are tailored to fund international expenses. Let’s take a closer look at how foreign exchange cards differ from debit and credit cards.
- First, all types of cards can be used to make payments to merchants or ATMs abroad. You can also withdraw money from anywhere in the world using an INR credit or debit card issued from your existing bank account. These cards usually have a credit limit on your savings account. However, credit and debit cards are very expensive when withdrawing foreign currency from overseas ATMs. Interest fees, foreign currency transaction fees, and withdrawal fees (also known as cash advance fees) are required.
- However, a foreign exchange card is a prepaid product denominated in a specific foreign currency to carry a specific amount of money.
- Cards are preloaded with currencies and are not linked to a specific bank account. More specifically, swiping a card applies the exchange rate for a specific debit/credit or forex card. INR credit and debit cards are local currency commodities.
- The INR to foreign currency conversion is done at the time of the POS/ATM transaction at the daily rate plus a premium unknown to the customer. Forex cards, on the other hand, contain a certain amount of currency already converted at a certain exchange rate. This way, when the forex card is preloaded with the desired currency, the exchange rate is fixed and protected against exchange rate fluctuations. Therefore, you pay lower fees than debit and credit cards when trading with forex cards.
- Forex cards have multiple currency denominations, so there are no cross-currency markup charges as long as the cards are used within the same jurisdiction. Currency markups for debit and credit cards range from 1.5% to 3.5%, and sometimes more.
- Forex cards have multiple currency denominations, so there are no cross-currency markup fees as long as the cards are used within the same jurisdiction. Currency markups for debit and credit cards range from 1.5% to 3.5%, and sometimes more. International debit cards and credit cards for international transactions are also accepted. Credit cards are subject to a currency surcharge of approximately 3.5%. There is also a transaction fee of 2.5% to 3.5%. Not all credit cards support international transactions, so be sure to check before carrying them around. In terms of security, forex card risk is limited to the amount on the card. Compare this to a debit or credit card, where your entire bank balance or outstanding limit can be at risk.
Conclusion – Thus, it is always advisable to get a forex card rather than an international debit card while traveling abroad. You can also go for a Global travel card from Niyo Global if you want more facilities, fewer transactions, and cash withdrawal charges.
