Forex Card Charges vs Debit vs Credit In India: Know Before Travelling Your Next Trip
Blog Outline
Planning a trip abroad and wondering about Forex card charges associated with your international travel expenses? Here’s what you need to know. Most of the banks levy International transaction fees on Forex, Debit and Credit cards like:
Credit cards like:
- Currency conversion fee
- Foreign transaction fee
- Dynamic currency conversion fee
- Cash advance fee
- Foreign ATM fee
- Over-limit fee
- Annual fee
While travelling, it is good to be familiarised with charges and fees to avoid surprises. Don’t fret we covered you on the various Forex Card Charges vs. Debit vs. Credit In India.
Travelling abroad for business, leisure, or studies is exciting, but an essential aspect of your travel planning is bound to be handling money on the go. What’s your go-to option? Do you prefer to conduct all transactions in cash or use debit/credit cards or Forex cards? No matter which option you pick, they all come with charges in one form or another.
A Forex card is a prepaid card loaded with foreign currency of your choice, depending on the country you are visiting. It works similarly to a debit card by swiping at stores, making payments at international websites, or withdrawing foreign currency from ATMs while travelling internationally. Forex card charges often include loading/unloading charges. But there are no extra charges on international transactions after that. They convert currency ahead of time to avoid per-transaction forex card charges.
This is why it is suggested to make an informed decision so you pay the least overhead amount. Thankfully, here is everything you need to know about various international transaction charges. This information will surely help you during your international travels.
International transaction charges and other standard fees
Most banks levy forex card, debit card and credit card international transaction charges. Here are some of them:
1. Currency conversion fee:
Forex card charges range from 1% of the purchase price, imposed by a credit and debit card network provider (such as VISA, Mastercard, or American Express) on the transaction amount to convert from one currency to another.Niyo Global Card, an international travel card, is better than a Forex card as it has no cross-currency charge applicable on foreign transactions.
2. Foreign transaction fee:
A foreign transaction fee ranging from 3% or more is imposed by many (not all) credit and debit card issuing banks on a transaction that takes place overseas or with a foreign merchant. It is one of the standard international transaction charges levied on your transactions outside your home country.
For instance, you travel to New York, spend the equivalent of ₹1,000 in a store, and you will be charged for the purchase on your credit card. With a 3% international transaction charge, when you receive your account statement, you will notice a ₹30 surcharge. That’s the result of credit card international transaction charges imposed by your bank.
If you already have money on your debit card, you can use the debit card to pay instead of using the credit card. But, debit card international transaction charges will be applied to your transactions, which you need to pay during the transaction.
The foreign transaction fee is often called the foreign currency markup fee or foreign exchange fee (FX). Foreign currency conversion and transaction fees are often combined as a single foreign transaction fee.
3. Dynamic currency conversion fee (DCC)
Dynamic Currency Conversion (DCC) is a value-added service that is another forex card charge that gives international travellers an option to pay in their home currency at the POS (point-of-sale). This allows the merchant, acquiring bank or ATM operator to immediately convert a transaction amount into your home country’s currency for instant clarity. This service is available across 66 countries and applies only to VISA and Mastercard transactions.
In DCC, the currency conversion is done by the Acquirer Bank of the Merchant, and they have the freedom to apply a conversion fee as high as 3-12% (or more) on your transaction amount.
If you wonder what the difference is between currency conversion fees and DCC:
- DCC is also a kind of conversion fee, except it is imposed by the merchant (upon your approval) right at the POS.
- The time when you find the actual transaction amount also differs – with the currency conversion fee, you’ll know the final amount only when it gets posted on your app or in the monthly statement, whereas with DCC, you’ll know it right away.
- This fee is usually 1% of your transaction amount, whereas DCC can be as high as 12%
It is primarily unavoidable (unless you opt for a “no fee” card), whereas you have the right to decline DCC to avoid being charged extra. It’s up to you to decide whether knowing the charge upfront is worth paying the high DCC fee. So, if you plan to use your debit card loaded with Indian currency, beware that you might have to pay up to 12% DCC fee on your debit card international transaction.
Quick Tip: Want to avoid DCC? Niyo advises all its customers to make the intelligent choice to transact in the local currency of the country they’re visiting and not INR.
4. Cash advance fee
A cash advance fee is a Forex card charge by the bank for using a credit card to get cash. This fee could be a flat per-transaction fee of ₹250-500 or 3-5% of the cash advance amount.
How to avoid a cash advance fee: The only way to avoid a cash advance fee is by not withdrawing cash on your credit card. If unavoidable, try to minimise the a
amount of cash you withdraw on your credit card to pay a lesser fee.
5. Foreign ATM fee
International ATM usage usually comes with a flat fee of ₹100 or more and varies across various banks. It applies to cash withdrawals and balance enquiries at ATMs abroad.
The Niyo Global Credit Card by SBM Bank and the Debit Card by DCB Bank charge ₹300+GST on international ATM transactions, while the Debit Card by Equitas Bank levies ₹110+GST for the same.
How to avoid Foreign ATM fees:
- Use your banking app to find nearby branches and accessible ATMs
- Choose the cash-back option when paying at the stores.
- Withdraw less frequently but in more significant amounts.
6. Over-limit fee
Your card issuing bank may charge you for exceeding your credit limit. This fee could be 1.5% to 3.5% of the amount you spent over your credit limit or a flat amount of ₹500 or above. Usually, your bank would deny your transaction when you try to spend over your limit, but you can opt-in to get these transactions approved for a fee.
How to avoid over-limit fees: Do not opt-in for the over-limit fee; there are hardly any benefits. Avoid spending up to your credit limit; set alerts on your international ATM card for when you are approaching your credit limit.
7. Annual fee
Many credit/debit cards charge upwards of ₹100 every year for maintaining your account and providing you with all the associated benefits of the card. This is apart from the international debit card charges< that the bank collects. Most of them charge the same fee yearly, while others may even waive the annual fee for the first year you hold the card.
Niyo Global Card has a zero annual fee, which can be another incentive to choose the zero Forex Card.
How to avoid annual fees: Opt for a no-annual-fee card or talk to your bank about downgrading to a variant with a lower fee or a no-annual-fee alternative.
8. Issuing fee and loading fee:
Many forex cards provide the convenience of pre-loading multiple foreign currencies in India before travelling abroad. A nominal issuing fee and loading fee could vary across different banks.
9. Currency converting fee:
The currency conversion charges are applied only once when loading the card with foreign currency and shielding you from fluctuations in foreign currency rates throughout your travel abroad.
10. Unloading fee:
For any unused foreign currency balance in your Forex card that you want to convert back to INR, agents or banks usually charge a fee, and you get a lesser amount back.
If you are interested in the Niyo Global Card, here’s a list of features that come with it.
11. Other fees
Many credit/debit cards charge a card replacement fee if your card is lost or stolen and needs to be blocked, and you need them to send you a fresh card. All services offered by the banks are charged with a GST of 18%, including Forex card charges.
Niyo Global charges for lost/re-issuance of card:
- Niyo Global Credit Card: ₹249+GST
- Niyo Global Equitas: ₹199+GST
- Niyo Global DCB: ₹249+GST
- Niyo DCB (Current account): ₹200+GST
- Niyo Global SBM DC: ₹249+GST
- NiyoX by Equitas: ₹199+GST
To avoid surprises, it’s a good idea to familiarise yourself with all the fees associated with your card before travelling.
International Credit Card Charges
Card Issuer | Fees for Foreign Transactions | International Credit card charges for ATM Cash Withdrawals |
Niyo Global Card | Zero | ₹ 300 + GST (SBM Bank) |
HDFC </td style=”background-color: #fff;”> | 2% | |
Axis Bank | 3.5% | |
Citi Bank | 3.5% | |
Standard Chartered | 3.5% | |
Kotak Mahindra | ||
ICICI | 3.5% + GST | |
HSBC | 3.5% + GST | Free at HSBC ATMs outside India |
SBI | 3% |
International Debit Card Charges
Card Issuer | International Debit Card Charges for Foreign Transactions | International Debit card charges for ATM Cash Withdrawals |
Niyo Global DCB | Zero | ₹300+GST |
Niyo DCB | Zero | ₹100+GST |
Niyo Global Equitas | Zero | ₹110+GST |
SBI | 0.035 | 3% or Rs. 300 (whichever is higher) |
Axis Bank | 0.035 | 2.5% (Min: Rs. 250) |
HDFC | 0.035 | 2.5% (Min: Rs. 500) |
ICICI | 0.035 | 2.5% (Min: Rs. 300) |
HSBC | 0.035 | 2.5% (Min: Rs. 300) |
Citi Bank | 0.035 | 2.5% or Rs.500 (whichever is higher) |
Standard Chartered | 0.035 | 3% (Min: Rs. 300) |
Kotak Mahindra | 0.035 | ₹ 300 |
Amex | 0.027 | 3.5% (Min: Rs.250) |
Frequently Asked Questions
- Niyo is not just a global ATM card but an International travel card that allows you to make seamless transactions with zero forex markup.
- The best ATM card for international travel will depend on your specific needs and the type of travel lifestyle that you prefer. This blog lists cards that may work for you, so be sure to read and pick the one most suited for you.
- The charges for using debit cards abroad will depend on your provider and their fees. Most banks charge for using debit cards online with a forex markup fee and cross-currency charges. Niyo, on the other hand, has zero forex markup.
- An ATM Foreign Transaction fee is one that the bank charges for using a card outside of the country it was issued.
Forex cards provide Indian travellers with cost-effective and secure international spending options. With features like zero forex markup, predictable exchange rates, and enhanced security, these cards ensure convenient and controlled spending, making them an ideal choice for managing finances during trips abroad.
