When you are traveling abroad for leisure or study, one of the biggest challenges is to manage the currency of a different country. The most preferred solutions include cash, credit/debit cards, traveler’s cheques, and foreign exchange (forex) cards. A large number of people think that carrying a credit card along with cash is the ideal combination. However, bringing your domestic credit card into use abroad can be very costly. This is why a prepaid forex card is a perfect option for study abroad students. This is a more convenient and inexpensive choice than a credit card. Find out all forex card benefits in this article!
This Blog Includes:
- What is a Forex Card?
- Forex Card Benefits
- What should you do to get forex card benefits?
- How can Leverage Finance Forex Services Make your life easy?
What is a Forex Card?
A prepaid forex travel card is a card that has been preloaded and allows you to access money in foreign currency. You can have access to one or more currencies- up to 15- and you can withdraw the cash in foreign currency, check your balance, pay for your shopping, etc. Topping up the card based on your usage is also an option. Banks and even companies such as American Express and UAE Exchange and Financial Services offer these forex cards.
Forex Card Benefits
Following are some of the reasons why using a prepaid forex card is more beneficial while travelling abroad:
Protection from the Ever-Changing Forex Rates
The forex rates keep moving up and down according to the conditions prevailing in the world economies. In the case of a prepaid forex card, the foreign exchange conversion rate gets locked as soon as you load the money into it. In the case of a credit card, however, the rates prevailing at the time of the transaction are applied every time you swipe your card. This means that when the forex rates go up, you would have to pay a higher amount along with the other transactional charges. This leaves you volatile in the foreign exchange market.
Minimal Mark-up Fee
The mark-up fee is the price paid over the actual transaction value. Whenever you make any payment using either a credit or forex card abroad, this fee is levied on your transaction. In the case of prepaid forex cards, this fee is zero until the card is used within the same currency jurisdiction for which it is loaded compared to credit cards that incur a cross-currency mark-up fee of 2-3.5%. Opt for a multi-currency forex card to avoid this mark-up fee when travelling to multiple countries.
Lower ATM withdrawal expenses
Simply put, a credit card is an expensive way to spend. It has been primarily designed to work in only the country’s currency where it was issued. But when you use it to withdraw cash in a foreign land, your bank charges you extra for it. You would have to pay the foreign currency transaction fee and the withdrawal fee (also known as cash advance fee) as well. This cash advance fee is what the card issuer agrees to pay to the issuer whose ATM you have used to withdraw money abroad.
Late Payment Charges are not a Worry
Paying your credit card bill later than due forces you to pay a late fee and interest at high rates every month till you have paid the entire outstanding amount. In the case of a prepaid forex card, this is not the case because it has been paid out in advance.
No Need to Pay Conversion Charges for Forex
Generally, no forex conversion charges are applied abroad when using a prepaid forex card. This is because your currency gets converted when loading your card before leaving the country. Thus, forex cards are pre-loaded with foreign currency. However, when using a credit card, this currency gets converted each time you use it and a forex conversion fee is charged.
When purchasing a forex card, an issuance fee is charged. In the case of a credit card to be used while travelling abroad, a joining fee and an annual fee/renewal fee are to be paid. This fee ranges anywhere between INR 500-5,000. But the additional charges which are offered may vary significantly.
What should you do to get forex card benefits?
As listed above, the prepaid forex card emerges as a clear winner compared to a credit card in many areas. However, according to the experts, all your currency should not be carried in the prepaid forex card. The best option is to get a multi-currency forex card. This would come in handy for multiple trips and the charges would also be reduced due to the fixed forex rate. A mix of forex cards and cash/credit must be maintained in the ratio of 70:30. Keep credit card as a backup option in case of theft or limit exhaustion.
How can Leverage Finance Forex Services Make your life easy?
With the help of Leverage Finance, you will receive assistance in International Money transfers and in Loans. With an onboarding time of approximately 2 minutes, we can take care of all your forex-related issues. Here are a few reasons to consider us as your personalized finance buddy:
- Cost effective
- Instant payment
- No paper work
- Entirely digital
Optomize your forex card benefits with Leverage Finance today! Reach out to us at 1800572000 for all your queries.