When you go on a foreign trip, there are many things you need to look into, right from the validity of your passport to the type of visa you need to the currency you carry. When it comes to carrying forex, you have a few options. Either you could carry cash, trevellers' cheques, or even use your credit or debit card. According to a report published in The Times of India today, one such viable option is a prepaid forex card.
There are several advantages to prepaid forex cards, says the report. The cost of buying these prepaid forex cards is in line with buying foreign currency from the bank. Another big advantage is that you can load multiple currencies on a single card.
So, let's say you are travelling from Mumbai to Singapore to US via Japan in one trip. You can load the currencies of all three countries on a single card. In fact, the forex card can be loaded with 10 different currencies. These cards can not only be used for online shopping, but are accepted world wide.
Though forex cards are more popular with corporates, now many retail consumers are also warming up to the idea. After all, when you change currency at airports and five-star hotels you land up paying a very high mark-up. Standalone forex dealers too offer good rates, but they do have their own set of issues.
There are a number of banks which offer prepaid forex cards, like Axis Bank, HDFC Bank and ICICI Bank, as well as non-banking entities such as Thomas Cook. Read this Firstpost story to know more about Thomas Cook Borderless prepaid forex card.
"The conversion charges while loading a prepaid forex card are much lower than what are charged by some of the foreign exchange houses. It is much cheaper than credit cards, which have a loading of 2.5-3.5% on the conversion charge," Raj K Prasad, senior VP at Axis Bank has been quoted as saying by Times of India. Read the full Times of India story here.
Prepaid forex cards are not a bad idea as they offer protection against foreign exchange fluctuation. Many issuers offer insurance cover with the card, without any additional charges. Banks usually charge cross currency mark-up of 3 percent on transactions. There are many different types of fees that are charged namely issuance fee, reload fee, re-issuance PIN fee, ATM cash withdrawal fee, balance inquiry fee, inactivity fee and the like. Many prepaid cards don't permit the card to be used towards temporary charge blocks - for instance, paying deposits at hotels, hiring of cars and the like. With some cards you will have to maintain an annual card loan amount as well, the minimum will vary from issuer to issuer. As long as you don't mind paying these extra fees and other terms and conditions, this isn't a bad option.
Updated Date: Dec 21, 2014 03:02:00 IST