Forex cards are simply like debit cards. The main purpose of the forex card is to act as a payment tool while traveling abroad. It must be a better alternative compared to credit cards, debit cards, cash, and cheque book while traveling to another card. It is a globally accepted payment card. There are two types of forex cards namely
- Single currency forex cards
- Multiple currency forex cards.
As the name implies single currency forex cards carry only one country currency at a time. At the same time, multiple currency forex cards carry multiple countries’ currencies at a time.
Table of Contents
1) Why to choose forex card?
When planning for a personal trip or business trip to another country you may think in which way I need to carry the money?. In abroad you need to look for the best hotels, airlines for traveling, and places for sightseeing or a business meeting. All these expenses would be in the need to carry money.
Here the purpose of forex cards plays a vital role. It is a convenient and inexpensive way to use money in another country. This is a prepaid card. You would need to load money as like as debit cards. Thus forex cards store the money in electrical form. As it is a globally accepted one you can make it for purchasing abroad and for making payments online.
Visa and Mastercards are the two where forex cards were registered. This allows you to pay the bills all over the world. You can load the currency of the visiting country in the forex cards. If it is multiple fore cards two or more than currency can be loaded.
For Example, let us assume that you are going to visit the United States. The currency in the United States is Doallr. You can load dollars in your single forex cards. Suppose you are visiting America followed by England. The currency of the England is Euro. so now you need to load Dollars and euros on the same card. Here multiple forex cards help you to load Euro and Dollars.
2) What are the eligibility criteria for forex cards?
It is available for Indians who are traveling abroad and for those NRI residing in India. To apply for the forex cards follow the below-mentioned steps.
- Choose the banking institution in which you need to buy forex cards
- Ask for the application form and the declaration form
- Fill out the forms.
- Attach your passport soft copy, visa hard copy, and the soft copy of your traveling tickets.
- Also, include your PAN card details.
- To check out the status of your application log in to your bank’s website and look for your application status.
Not only banks some of the money exchanger companies also provide forex cards.
3) How do the forex cards work?
After the completion of the application form, your forex card will come to you within a small interval. When you are receiving the forex card it is loaded with the currency of the country you are going to visit. ie) let us assume that you have attached the passport and visa for France with your forex card application form. Euro or Pound will be directly loaded into your card.
There must be initial processing fees for making the arrangements. This fee is known as a one-time activation fee. After that, no other charges will be deducted from your card while you swipe your card at the Point of sell (POs) terminal. As the currency is already filled it will identify automatically to make payments. It uses only the local currency of the country.
But when you withdraw the amount from your ATM you will be charged with small charges. It is advisable to load currencies at the time of purchasing the card. Even if you are run out of funds it is easy to reload funds for forex cards. We can reload the money anytime either online or by transferring the funds to the forex card issuer.
4) What are the fees and charges of forex card?
- Forex cards is a hassle-free process that collects the initial processing fee for the application of the forex cards.
- You need not pay the renewal amount if you have an active card and account. But if you have an inactive account over several days you should need to pay the renewal amount while reloading.
- An Add-on card fee is collected while providing the additional card to the holder.
- The Encashment fee is collected during the conversion of the standing balance into cash.
These are the additional fees associated with the account. There are some additional fees associated with forex cards such as
- First withdrawal fees are common over forex cards. This is one of the commonly collected fees when you have withdrawn abroad.
- Some banking institutions would have charge balance enquiry fees. This fee would be charged each time when you are requesting your updated forex card balance.
- When the loaded currency and the transaction currency mismatches, they would have collected an additional charge known as cross-currency exchange.
- Replacement fees are collected when you have made the replacement of the card.
Other than this no other fees are associated with forex account and with forex cards. Generally, initial processing fees for multiple forex card account are quite higher compared to the single forex card account.
5) What are the advantages and disadvantages of using forex card?
When looking at other options like a credit card, debit card, and a cheque book, forex cards have some advantages over those options. Below mentioned are some of the advantages of using forex cards.
- Better exchange rate than other options
- Remains safe and secure
- Can include multiple foreign currencies
- Globally accepted card
- Cheaper than credit cards and debit cards.
5.1) Better Exchange Rates
Forex cards have better exchange rates than other options for loading foreign currencies and withdrawal of foreign currencies too. Credit cards, debit cards would have higher exchange rates. Even for banks issuing forex cards is a cheaper option.
For example, replacing the Indian currency with the American dollar requires nearly Rs 73. Whereas if you exchange the Indian currency with the forex cards for exchanging then it would cost only around Rs 71. Thus there is always a margin of difference between the normal exchanging methods and exchanging with forex cards.
5.2) Locked-In exchange rates at forex card
Forex cards are filled with foreign currencies with locked-in exchange rates. This option prevents the loss of value of your money. The value of exchanged money will be at the same rate irrespective of the changed value or the changed exchanging rates in International markets.
For Example, let us assume that you have exchanged the Indian rupees worth Rs 70 in exchange for An euro worth 5 euro. After this, the exchange rates may be changed in the International market such as Rs 75 for 5 euro. Whether the changes are positive or negative these changes won’t affect your exchanged rates.
It is locked at the time of exchanging and no other options to change the exchanges rates for the past transaction. Newer exchange rates are applicable for only newer transactions.
5.3) Safe and Secure card
Forex cards are more secure to use. Carrying physical cash seems to be a risky one. It can be gone lost or stolen. Also, it is difficult to exchange when you are on an urgent trip. Cheque book also has certain disadvantages, so that the forex cards come with a unique card number, unique chip, and unique personal identification number (PIN).
Like credit cards, forex cards also have some fraudulent actions. If you found any unusual activities in your account without your concern. Or if you have lost your card, whatever may be the scenario just inform immediately to the forex card issuer. They will immediately freeze your card.
You are provided with a new forex card and the old balance in your card is transferred to the new cards with collecting some replacement fees.
5.4) Holding multiple currencies using forex card
Forex cards can be a better option for holding multiple currencies. All the forex cards come with either single holding currency or multiple holding currencies. Each currency has a separate digital wallet in your account. Separate currency is stored in a separate wallet. Choosing a single wallet to the multiple wallets depends upon you.
For Example, Axis bank Forex cards are capable of holding currencies of 16 different nations around the world. They can either be brought together by using a multiple Axis Bank forex account, or you can buy a single wallet using a single Axis Bank forex account.
The 16 nations and their currencies are “Australian Dollars (AUD), Denmark Krone (DKK), Euro (EUR), Hong Kong Dollars (HKD), Japanese Yen (JPY), New Zealand Dollars (NZD), riyal-omani (OMR), Saudi Arabian Riyals (SAR), Singapore Dollars (SGD), Swedish Krona (SEK), Swiss Franc (CHF), Thai Baht (THB), United Arab Emirates Dirhams (AED), United Kingdom Pounds (GBP) and the United States Dollars (USD)”.
5.5) No Extra charges for forex card
Forex cards have no extra charges at POs. Debit and credit cards when you are swiping at POs in abroad you will be charged an additional fee. But in the case of forex cards, there are no such extra charges imposed while swiping at the POs. Debit and credit cards will make you pay more than 5% to 11 % of the total transaction amount while using them abroad.
5.6) Free of DCC
Forex cards come with a free dynamic currency conversion fee. Dynamic currency conversion (DCC) fee is applied when you exchange your money for the local currency. Credit and debit cards have an additional charge of 5 to 11% of the total amount. Out of the nearly 3% to 4% is due to DCC. As you are loading the forex card with the local currency there is no such fee.
5.7) Global acceptance
Forex card comes with global acceptance. Not all debit cards have global acceptance other than a few. But on the other hand forex cards are designed particularly for abroad usage. So that it is a universally accepted card that comes under Visa and Mastercard.
6) What are the benefits of forex cards?
Forex cards carry a lot of benefits in them which are listed below
6.1) Cash withdrawal from any ATM
You can withdraw your loaded amount from any other international ATM. The card automatically detects your locality and dispenses the local currency in the ATM.
6.2) Safe and Secure
Like the fraudulent action in the credit card to prevent unauthorized access over the credit card, likewise, forex cards can also be protected in case of any unauthorized access or if your card has been lost or stolen. When you approach your card issuer they will resolve the issue. Thus forex cards remain safe for use across the boundary.
Other benefits of forex cards include
- The benefit of loading multiple currencies of different nations. So that became a user-friendly card while traveling around the world.
- You can enjoy the locked-in exchange rates which prevent fluctuating currency rates.
- With the feature of hassle-free exchanging options in forex cards, you don’t need to search for the money exchanging company in foreign locations.
- Like credit cards and debit cards, you can shop online and offline stores. They don’t charge any additional fees.
- Forex card has a benefit of using them in Duty-free stores in the airport.
These features help you to save a lot of money. They also provide a convenient method of using the card with less maintenance.
To know more about travel credit cards: Types of credit cards
Hereby, concluding that forex card is more similar to debit cards in terms of usage and working. But it additionally comes with the multiple currencies holding capacity and global acceptance. If you are a businessman or a traveler who frequently visiting many countries then forex cards will be best suited for you than those of credit cards. However, travel credit cards carry a lot of rewards which is higher compared to forex cards.
Forex cards are loaded with cash in your nation for example say India. The loading cash will be the local currency of the nation which you are going to visit. Hence you don’t need to exchange money for your spendings. You can use it sort of a normal open-end credit card.
YES Bank multicurrency credit card is one of the top-rated forex cards. This is because of their enhanced security and cost-effectiveness. Here you can load up to 15 global currencies.