International Travel Decision: Cash or Forex Card for Indian Travelers Overseas
In the world of international travel, managing your finances can be a daunting task. But fear not, for there's a solution that could make your journey worry-free: Forex cards.
Forex cards, also known as travel cards, are prepaid instruments that can be loaded with one or more foreign currencies before departure. These cards are becoming increasingly popular, offering several advantages over traditional payment methods.
Airport exchanges, for instance, are notorious for their poor conversion rates and high margins. In contrast, forex cards often provide better exchange rates, making them ideal for big expenses.
A balanced mix of forex card, cash, and a backup payment option is the safest, most economical way to ensure you travel worry-free. For short trips under a week, about 70 per cent on a forex card and 30 per cent in cash works well, while multi-country travel benefits from multi-currency cards with 20-30 per cent in cash as backup.
Cash is essential for small purchases and emergencies during international travel. Unlike cards, cash also makes it harder to track spending, which can be a double-edged sword. However, it's important to remember that carrying some local currency remains essential, as cash is universally accepted, even in rural areas or places with poor digital infrastructure.
Many forex cards allow multi-currency loading, which is particularly handy for those visiting multiple countries in one trip. In Germany, specialized providers like Unimoni offer multi-currency Forex cards, focusing on convenience and security. Traditional banks offering such cards are less commonly highlighted in recent sources.
Costs typically include foreign transaction fees, which can range from 0% to around 3.5%, depending on the card type and issuer. Premium cards often have lower fees but higher annual costs. Specific fee details vary widely and should be checked directly with the card issuer.
In India, travellers should also be aware of Tax Collected at Source (TCS) applied on forex card loads.
Unlike debit and credit cards, forex cards are usually cheaper and safer. Experts advise always paying in the local currency when swiping abroad and avoiding airport exchanges. Forex cards work like debit cards abroad, allowing transactions at shops, restaurants, and ATMs, but remain unlinked to your primary bank account, making them safer to use.
Once exchanged, cash carries no additional hidden fees. The safest approach for carrying money while traveling internationally is a mix of forex card, some local cash, and a backup debit/credit card. Small vendors, taxis, and rural destinations may not accept cards at all, forcing travellers to fall back on cash.
Budget-conscious travellers appreciate the fact that expenses can be tracked via apps or SMS alerts with forex cards. Exchange rate stability is an advantage of forex cards, as when you load the card, the conversion rate is locked in, shielding you from fluctuations.
Experts suggest carrying around 20-30 per cent of your budget in cash for international travel. Forex cards generally offer locked-in rates and lower fees compared to airport exchanges. Travellers often prefer forex cards for their security, since they are PIN-protected and can be blocked immediately if lost or stolen.
In conclusion, forex cards offer a practical and secure solution for international travel, providing better exchange rates, lower fees, and enhanced security compared to traditional payment methods. By understanding how to best utilise forex cards, you can embark on your journey with confidence, knowing that your finances are well managed.
