Is It Cheaper to Exchange Money at the Airport or Use a Forex Card
Blog Outline
As a traveller, is it better to carry cash or a Forex card? This question might have popped up in your mind often. It is true yet hard to understand whether exchanging money at the airport or using a Forex card is cheaper.
Exchanging Money At the Airport
- Immediate access: No waiting for delivery, grab your cash and hit the ground running.
- Physical security: Carrying some local currency can bring peace of mind, especially when cards aren’t accepted.
- Exorbitant rates: Airports notoriously offer the worst exchange rates, often with hidden fees buried in the fine print. You could be paying up to 15% more than the market rate!
- Limited options: You’re stuck with whatever rates the single bureau offers, no comparison shopping allowed.
Using a Forex Card
A Forex card is a popular alternative to airport exchange. A Forex card functions just like a debit card and is easy to use. You can use a Forex card at ATMs or stores. It transfers money between your Forex account and the ATM or store.
- Competitive rates: Advantage of Forex cards is generally offer rates closer to the interbank market rate, significantly cheaper than airport exchanges.
- Convenience: Load multiple currencies, track spending, and avoid carrying bulky cash.
- Safety: Cards come with chip-and-PIN security and loss protection, minimising theft risk.
- Advance planning: You need to order your card beforehand, leaving no room for last-minute decisions.
- Transaction fees: Some cards charge small per-transaction fees, which are often lower than airport markups.
- Acceptance: While widely accepted, cards might not work everywhere, especially in remote areas.
- ATM Withdrawal Charges: One of the major disadvantages of Forex cards is the ATM withdrawal charges. You might have to pay $US2 to $US3 for each ATM withdrawal. You might also have to pay cross-currency charges up to 3%.
- Tax: You must also pay a cross-currency tax of up to 0.18% for less than 1 lakh.
- Limited Validity: Most Forex cards also have a limited validity of 1 year, which can be problematic if you are a frequent traveller.
Cost Comparison: Currency Exchange vs Forex Card
Exchange Amount | Airport Exchange (Estimated Total Cost) | Forex Card (Estimated Total Cost) | Cost Difference |
$100 | $110-$115 | $102-$105 | $5-$10 |
$500 | $555-$565 | $510-$515 | $40-$50 |
$1000 | $1110-$1120 | $1020-$1025 | $90-$95 |
As the table shows, airport exchange is consistently more expensive than a Forex card. The cost difference grows with the exchange amount, making Forex cards a clear winner for larger sums. Even for smaller amounts, the convenience and security of a Forex card often outweigh the marginal cost savings of airport exchange.
All these factors can make it more sensible to look for better payment methods like Niyo Global. There is no issuance charge associated with Niyo Global. You don’t have to pay any loading or unloading charges. Instead, you can get up to 7.5% interest on the balance amount you don’t spend. You also don’t have to pay any Forex markup fees on your international transactions, which is one of the major reasons why Niyo Global is a better payment option than Forex cards.
Why prefer a Niyo Global Card over Forex Cards?
Other features of the Niyo Global card include:
- Zero Forex markup
- Up to 7.5% interest on your savings with monthly interest payouts
- Free airport lounge access across India
- Add money in INR and use in 150+ countries & 130+ currencies
- Customer Service is available in-app 24X7
- Tap and Pay transactions
- Quick ATM Locator within the app
- Handy foreign currency converter within the app
- There are no account opening fees
- The account opening process is 100% digital within the app, no need to visit the bank
- There are no fees for non-maintenance on the Zero Balance Card
- You can easily add money using UPI/NEFT/IMPS without any charges
- Niyo Global app allows you to manage your payment limit across multiple payment channels
Conclusion
Frequently Asked Questions
Using a Forex card is almost always cheaper than exchanging money at the airport. Airport cash exchanges have notoriously high markups on exchange rates and additional service fees. Forex cards typically offer near-mid-market rates with minimal transaction fees.
Most Forex cards have minimal charges like loading fees, transaction fees (often per withdrawal), and inactivity fees. Compare cards and choose one with competitive fees that suit your travel plans.
Yes, you can use your debit or credit card for international transactions. However, some issuers charge foreign transaction fees or apply less favorable exchange rates. Check your card’s terms and fees before relying on it solely.
In many countries, international debit cards are accepted. Avoid airports and untrustworthy vendors while exchanging currency and use an international debit card to avoid heavy airport currency exchange fees.
On average, travellers lose a minimum of 6-8% and a maximum of 12-15% of their money when exchanging money into foreign currency in various forms. You can save yourself from spending such ludicrous money by switching to an international debit card like Niyo Global. It offers zero Forex markup, which means you don’t have to worry about paying hefty charges on exchanging money.
Airport money exchange rates are notorious for charging exorbitant “service fees”. Airport foreign currency exchange fees are much higher and is not the best place to exchange money.
