Gone are the days when you had to worry about carrying cash while on your trips abroad or fret over the high transaction costs of international credit or debit cards. Forex cards have replaced traveller’s checks and foreign currency in tourists' baggage and have become popular among travellers due to their wide acceptance.
If you are planning an international trip, read on to learn about the various aspects and benefits of these cards.
What are forex cards?
Foreign exchange or forex cards are prepaid cards commonly issued by banks and travel companies and can be used like debit/credit cards. These cards can be loaded with the currency of your destination before you leave for your trip. Multicurrency forex cards are also available that facilitate currency conversion across countries.
What are the features of a forex card?
Forex cards come packed with features designed to make foreign transactions hassle-free:
- Pre-loaded with foreign currency: Load once, and use throughout your trip.
- Locked-in exchange rates: Protects you from exchange rate volatility.
- Widely accepted: Use at millions of ATMs, POS terminals and online stores worldwide.
- PIN protected: Enhanced security with a PIN and chip-based system.
- Reloadable: Top up online if you're running low during your travels.
- Multi-currency options: Some cards allow you to carry multiple currencies on one card.
Benefits of having a forex card
Here's why forex cards are beneficial over other conventional payment options while traveling abroad:
For Corporates
Corporations prefer forex cards for employees who travel abroad since keeping track of employees' expenses and expense settlement becomes easier. Several banks also offer an overdraft to companies, allowing them to make payments later.
Duplicate Card
In case you misplace your card or damage it, it is possible to get a replacement by contacting the centre where your card was issued. In case it was misplaced, the issuing centre will take necessary steps to ensure the balance amount on your card is secure. Some banks also transfer an emergency amount at an additional cost for use until you receive a duplicate.
Types of forex card
Depending on your travel needs, you can choose from:
- Single currency forex cards: Load one currency, ideal for travel to one country.
- Multi-currency forex cards: Load multiple currencies in one card, perfect for travellers hopping across borders.
- Student forex cards: Tailored for international students with added benefits like discounts and minimal charges.
- Corporate forex cards: Designed for business travellers, often integrated with expense management tools.
Steps to apply for getting a forex card
To apply for a forex card, submit an A2 form (available online or with the issuer), your passport, the funds, and other documents required by the individual issuer. Some issuers ask for PAN card, copy of your flight ticket, visa granted by the destination country, etc., or any other documents of proof as mandated by FEMA.
Some issuers offer complimentary features such as travel insurance, air accident insurance, etc. Check with your issuer to understand the terms and conditions of the forex card and make an informed decision to avoid financial worries during your trip.
What are the charges to get a forex card?
While forex cards are generally cost-effective, be aware of these common charges:
- Issuance fee: One-time cost (₹150–₹500 approx.).
- Reloading fee: A small charge every time you top up your card.
- ATM withdrawal fee: A flat fee per withdrawal (varies by provider).
- Inactivity fee: Some cards charge if unused for a long period.
- Cross-currency charges: If using a single-currency card in a country with a different currency.
Always check the card’s fee schedule before applying.
Do's & don'ts of using a forex card
Here are the do's:
- Set a strong PIN and memorise it.
- Check the balance regularly through the provider’s app or portal.
- Reload in advance to avoid emergencies.
- Inform your card issuer immediately if the card is lost or stolen.
Don'ts:
- Do not use the card for refundable security deposits (e.g., hotels, rentals).
- Do not withdraw small amounts repeatedly; it adds up due to ATM fees.
- Do not ignore travel insurance; card loss or ATM fraud isn’t always covered without it.
Tips to use a forex card
These tips will help you use a forex card efficiently:
- Load multiple currencies if you are travelling to more than one country.
- Avoid currency conversion while paying; always opt to pay in local currency.
- Monitor exchange rates and reload your card when rates are favourable.
- Carry a backup payment option (another card or cash).
- Match the card validity with your trip duration—extend if needed.
Conclusion
A forex card is a must-have travel companion for anyone journeying abroad, offering safety, savings and simplicity. When used wisely, it can be far more convenient than relying solely on credit cards or cash. But don’t forget, while a forex card helps with expenses, only travel insurance safeguards your health, luggage and peace of mind during unforeseen circumstances. So, before packing your bags, make sure you carry both— a well-loaded forex card and the protection of overseas travel insurance.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.