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Credit Card or Forex Card? What's Better for International Travel

Image Source: IANS

Image Source: IANS

The three primary methods of paying your bills during international travel are cash, forex card and credit card. All you need to know

Covid-19 pandemic has made us forget what travel is. Locked in the four walls of our homes, we can only take respite from seeing the beautiful locales on Instagram. However, with vaccines around us, it is certain that this pandemic too shall pass. Whenever we’ll be making our travel plans, it is essential to have a few things sorted. If you are planning to travel abroad, it gets even more necessary to know about some important things. Since the international trip will require you to carry foreign currency with you, there are several ways you can spend hassle-free.

The three primary methods of paying your bills during international travel are cash, forex card and credit card. While paying in cash can seem to be a hassle-free option, it’s not always safe to carry hard currency in large amounts due to the fear of losing it or getting it stolen. Moreover, there is a limit to how much cash you can carry to a foreign country. Nonetheless, carrying some cash always proves beneficial in emergencies and is even advisable to do so. But you should always club cash with either a forex card or credit card.

Now the big question is — what’s better betweena forex card anda credit card. The major difference between both the cards is that of mark-up charges. While credit cards attract an additional fee, which ranges from 2-5% of the transacted value, such charges are avoidable on forex cards.

You won’t be levied any transaction fee on payment made by forex cards if your card is loaded with the currency that is required for the transaction. For example, if you made a transaction at a store in the United States, and your forex card was loaded with US dollars, then you don’t have to worry about any extra charges.

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But in case you are on multi-country travel and your forex card has a different currency thanthe one in which the transaction will be made in, a conversion charge will be levied.

Currency Fluctuation

Forex cards also score better than credit cards as you don’t have to worry about the fluctuation in the value of the foreign currency because once you load the money in your forex card, the value of the foreign currency is locked then and there.

Cash Withdrawal

Another advantage of forex cards is that they attract lower ATM withdrawal charges internationally than credit cards, but come with a pre-specified withdrawal limit.

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first published:May 22, 2021, 14:30 IST