Forex Card vs Credit Card vs Debit Card: Which is Better for an Indian Traveller?
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In the battle of Forex Card vs International Credit Card vs International Debit Card vs Cash, read below to understand which one would benefit you as an international traveller:
- Forex Card vs Cash: Get forex cards for security, convenience, and tracking expenses, and cash to avoid fees and when you’re in remote locations.
- Forex Card vs International Credit Card vs International Debit Card: Use forex cards for budgeting, and security; international credit cards for convenience, and rewards. And use international debit cards for convenience and direct access to funds. We suggest using these cards strategically depending on your needs.
Planning a trip abroad from India?
Figuring out how to manage your money can be tricky. Should you carry cash, or use your international credit or debit card? In this battle of Forex Card vs International Credit Card vs International Debit Card vs Cash, who wins?
Let’s compare the pros and cons of forex cards, international credit and debit cards to see which one reigns supreme for savvy Indian travellers like you.
Forex Card vs International Credit Card
Forex card advantages
Locked-in exchange rates: You load the card with foreign currency at a fixed rate, shielding you from future fluctuations.
Potentially lower fees: Many forex cards offer competitive exchange rates with minimal markup compared to credit cards’ foreign transaction fees.
Security: If lost or stolen, you only lose the pre-loaded amount.
Budgeting: Preloading a set amount helps you stick to your travel budget.
Forex card disadvantages
- Limited acceptance: While widely accepted, forex cards might not work everywhere, especially at smaller merchants. They have a limitation of loading a maximum of 14-20 different currencies.
- Reloading fees: Adding more funds during your trip might incur reloading fees.
- May not offer rewards: Unlike some international debit and credit cards, forex cards typically don’t offer travel rewards or cashback programs.
- Unloading fees: While withdrawing the leftover amount after a trip, the balance amount again incurs a currency conversion charge and a fee to do so.
International credit card advantages
- Foreign transaction fees: Most credit cards charge a fee (often a percentage) for international transactions. Always look for international credit cards that offer zero forex markup on all international transactions.
- Risk of overspending: The ease of using credit can lead to exceeding your budget.
Here's a quick decision guide
Use a Forex card for everyday expenses with a locked-in exchange rate. And use credit cards for emergencies, larger purchases, or situations where forex cards are not accepted and to potentially earn rewards.
Forex card vs International debit card
International debit card advantages
- Widely accepted: International debit cards are a globally recognised payment method, offering greater convenience.
- Currency conversion fee: Many international debit cards offer zero forex markup (no extra forex fee) on all international transactions. This could help you save almost 5% on all your transactions abroad.
- Direct access to funds: You can directly use your existing bank account funds for transactions.
- Earn interest: Since an international debit card is linked to a savings account, your money continues to earn interest.
- Potentially lower fees: Some debit cards offer competitive exchange rates compared to forex card markups. However, check your bank’s foreign transaction fees (FTFs) and ATM withdrawal charges.
International debit card disadvantages
Foreign transaction fees: Many banks charge FTFs, which can eat into your budget. Always look for international debit cards that offer zero forex markup on all international transactions.
ATM withdrawal charges: Withdrawing cash from ATMs abroad often incurs additional fees from both your bank and the ATM operator. Make yourself aware of these charges before you venture out.
Forex card advantages:
Security: If lost or stolen, you only lose the pre-loaded amount on the card, minimising financial risk.
Convenience: Forex cards are widely accepted for payments, eliminating the need to exchange large amounts of cash beforehand.
Budgeting: Preloading a set amount helps you manage your travel expenses effectively.
Potentially competitive rates: Some forex cards offer exchange rates comparable to international debit cards, minus the bank’s FTFs.
Forex card disadvantages:
Limited acceptance: While widely used, forex cards might not be accepted by all merchants, especially compared to international debit/credit cards. Forex cards can be loaded in a maximum of 14-20 different foreign currencies. If you travel to a country beyond these, the forex card will not be usable.
Reloading fees: Adding more funds during your trip might incur reloading fees. Look out for all the charges on a forex card: loading fee, forex markup fee, ATM withdrawal fee, unloading fee, and inactivity fee.
May not be universally cost-effective: Forex cards often have a markup fee on the exchange rate, so compare rates carefully. But with international debit and credit cards offered by Niyo, they have zero forex markup, which can be a good option to save almost 5% on all your transactions abroad.
Here's a quick decision guide
Choose an international debit card if
- You already have an international debit card with low or no forex fee and ATM withdrawal charges (check your bank’s terms).
- You prioritise direct access to your bank account funds.
- The convenience of using a familiar card is important.
- You like the extra income of interest on savings balance.
Choose a forex card if:
- You want to lock in exchange rates and avoid potential FTFs.
- You prefer budgeting with a pre-loaded amount.
- You’ve found a forex card with a competitive exchange rate and minimal fees.
You might consider using both depending on the occasion
Use an international debit card for everyday transactions, especially if your bank offers good rates. And use a forex card with a pre-loaded amount for specific expenses or emergencies.
The best choice depends on your travel style and priorities. Research your bank’s fees, compare forex card rates, and consider how much security and budgeting control you need to make an informed decision.
Advice for Indian travellers
Forex card: A strong contender, especially for multi-country trips. Look for cards with low fees and good exchange rates.
International debit card: Consider cards with no foreign transaction fees. Niyo’s Iiternational debit card is a good option to avoid forex fees.
International credit card: Niyo’s international secured credit card can be useful for emergencies or building credit, but choose one with low foreign transaction fees and use it responsibly. Useful to make rental car bookings and hotel bookings abroad.
Cash: Carry a small amount for emergencies or situations where cards aren’t accepted.
Here’s a possible approach:
- Primary: Carry an international debit card with no foreign transaction fees for the bulk of your spends
- Backup: Carry an international credit card with no foreign transaction fees for specific situations.
- Emergency Cash: Have a small amount of local currency for upon arrival or in remote areas.
Why use Niyo card for travelling abroad? - Niyo card vs Forex card
Irrespective of whether you are travelling to one country or more, the international zero forex markup debit and credit cards from Niyo can be your best choice. They are Indian-Rupee-based international debit/credit cards that automatically convert Indian currency to any currency while transacting abroad. They are accepted in more than 180 countries, so you don’t have to worry about making international payments on foreign land.
Some of the most compelling features include:
- Zero forex markup on all international transactions
- Complimentary lounge access at airports outside India (with spend criteria)
- No account opening fees
- No loading and unloading charges
- Integrated Niyo app
- In-app ATM locator
- In-app Currency Converter to check currency rates in real time
- In-app 24/7 live chat Customer Service
- Tap and Pay transactions
- Easy to lock/unlock payment channels and block the card
- Manage payment limits across multiple payment channels
- Easily add money in INR using UPI/NEFT/IMPS/RTGS without any charges
Frequently Asked Questions
- Forex card: Prepaid card loaded with a specific foreign currency at a fixed exchange rate. You spend the pre-loaded amount and cannot spend more.
- Credit Card: Allows you to borrow money up to a credit limit set by the bank. You can repay the borrowed amount at the end of the billing cycle.
Unfortunately, there’s no single “best” forex card for the UK or the USA as it depends on your travel style and priorities.
To help you choose the one that’s right for you, look for the following:
- Security and budgeting: If these are your top concerns, look for a card with low fees and good exchange rates when loading currencies like GBP.
- Convenience: Consider cards widely accepted in the UK and offer easy online reloading options.
- Fees: Compare reloading fees, inactivity fees, and potential foreign transaction fees (if using the card outside the UK).
Research popular forex cards available in your country and compare their features, exchange rates, and fees (loading, inactivity, ATM withdrawals) to find the best fit for your USA and UK trip.
A forex card is neither a debit nor credit card. It functions more like a prepaid card. Unlike debit cards linked to your bank account, you load a forex card with a specific amount of foreign currency at a predetermined exchange rate. You don’t earn interest on the amount loaded on a forex card.
You can’t spend more than the pre-loaded amount, offering budgeting control. In contrast to credit cards, you don’t borrow money.
Generally, forex cards are better for security and convenience, while cash might be useful for emergencies or remote locations with limited card acceptance. Consider carrying a small amount of cash alongside your forex card for emergencies and remote locations.
- Security: Most forex cards require a PIN or other security measure for transactions. Using someone else’s card could be a security risk.
- Terms of service: Using another person’s card might violate the terms and conditions set by the issuer, potentially leading to blocked accounts or denied transactions.
- Verification: Some merchants might ask for ID verification to match the cardholder’s name with the person using the card.
