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Forex card, debit card, credit card charges while travelling abroad

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Are You Travelling Abroad?

Planning a trip abroad and wondering about the forex charges associated with using debit/credit/forex cards? Here’s what you need to know.

Travelling abroad for business, leisure, or studies is exciting, and an important aspect of your travel planning is bound to be handling money on the go. What’s your go-to option? Do you like to transact all in cash, debit/credit cards, or forex cards? No matter which option you pick, they all come with charges in one form or another.

Your aim should be to make an informed decision so you pay the least amount of overhead. Thankfully, here is everything you need to know about various charges levied on international transactions. This information will surely help in your international travel.

Charges associated with Debit/Credit cards

Most banks levy debit card and credit card international transaction charges. Here are some of them. 

1.Currency conversion fee

It is 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. 

2. Foreign transaction fee: 

A foreign transaction fee ranging from 2-3% 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 common international transaction charges levied on your transactions outside your home country. 

For instance, you travel to New York and spend the equivalent of ₹1,000 in a store and charge the purchase to your credit card. With a 3% international transaction fee, 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 make the payment 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 itself. 

The foreign transaction fee is often also referred to as the foreign currency markup fee or foreign exchange fee (FX). Foreign currency conversion and transaction fees are often combined and referred to as a single foreign transaction fee.

How to avoid foreign or international transaction fees: Consider debit/credit cards with no international transaction fees.

3. Dynamic currency conversion fee (DCC)

Dynamic Currency Conversion (DCC) is a value-added service that gives international travellers an option to pay in their home currency at the POS. 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) of your transaction amount.

If you wonder what’s the difference 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 mostly 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 smart choice — transact in the local currency of the country they’re visiting and NOT in INR.

4. Cash advance fee

A cash advance fee is a 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 cash advance fee: The only way to avoid a cash advance fee is by not withdrawing cash on your credit card. If it’s unavoidable, try to minimize the 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. It’s best to check with your bank upfront about such applicable charges.

How to avoid Foreign ATM fees: 

  • Use your banking app to find nearby branches and free ATMs
  • Choose the cash-back option when paying at the stores
  • Withdraw less frequently but in greater amounts

6. Over-limit fee

Your card issuing bank may charge you for exceeding your credit limit. This fee could be 2.5% 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 for a fee,  you can opt-in to have these transactions get approved.

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; if possible, set alerts 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. Most of them charge the same fee every year, while others may even waive the annual fee for the first year you hold the 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. Other fees

Many credit/debit cards charge a card replacement fee in case your card is lost or stolen, and it 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%.

To avoid surprises, it’s a good idea to familiarize yourself with all the different fees associated with your card before you travel.

Charges for Popular Credit Cards

Card Issuer

Fees for Foreign Transactions

Fees for Cash Withdrawals

Niyo Travel card

Zero

Rs. 150 + GST

HDFC

3.5% + GST

Rs. 125 + GST

Axis Bank

3.5% + GST

3.5% + GST

Citi Bank

3.5% + GST

Rs. 125 + GST

Standard Chartered

Rs. 140 + 0.07% – Rs. 770 + 0.014%

Rs. 140 + GST

Kotak Mahindra

3.5% + GST

Rs. 150

ICICI

3.5% + GST

Rs. 125 + GST

HSBC

3.5% + GST

Rs. 120 + GST

SBI

3% + GST

Rs. 100 + 3.5% + GST

 

Charges for Popular Debit Cards

Card Issuer

Fees for Foreign Transactions

Fees for Cash Withdrawals

Niyo Travel Card

Zero

Rs. 150 + 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

Rs. 300

Amex

0.027

3.5% (Min: Rs.250)

 

Charges associated with Forex Cards

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 and can be used to swipe at stores, make payments at international websites, or withdraw foreign currency from ATMs while travelling internationally. Forex cards come with loading/unloading charges. But, there are no extra charges on international transactions after that. They convert currency ahead of time, to avoid per-transaction charges.

Often, free spare cards are given with the purchase of a forex card. Also, the unused balance can be encashed or left on the card to be used during international trips in the future. Following are the types of charges associated with Forex cards: 

1.Issuing fee and loading fee

Many forex cards provide the convenience of pre-loading multiple foreign currencies in India itself before your travel abroad. There could be a nominal issuing fee and loading fee that varies across different banks.

2.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.

3.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 end up getting a lesser amount back.

 

Traveling abroad: How to carry money

You often come across small expenses, such as paying for your in-flight purchases, cab fares, purchases at duty-free outlets, dining out, etc, while travelling abroad. You can plan on carrying a small sum of money in cash to cover such expenses. Carry your credit card only as a backup. For some other expenses such as flight tickets, hotel booking, or rental car bookings, etc., you must choose to keep a Niyo Global Card. This card allows you to enjoy the benefits of the zero forex markup, thus offering the best in class digital banking experience for international travellers. Your “Tap and Pay” VISA Signature Debit Card integrated with an interest-earning* savings account doubles up as a multi-currency, zero forex markup** card that makes handling international purchases a breeze. You can load your account in INR and spend in any currency of 150+ countries around the world. The Niyo Global VISA Signature Debit Card comes with complimentary airport lounge access and exclusive concierge services (powered by VISA). 

The unassisted 100% digital onboarding is intuitive, and you can have your Niyo Global account in just a few minutes! Just keep your PAN, Aadhaar and Passport ready for KYC, download Niyo Global App and hop on board right away. And don’t worry; you won’t be asked for any additional charges in case of Niyo Global Card. That means you can enjoy your trip without worrying about any hassles of international transactions.

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