Why Do You Need a Forex Card for Your Next Trip Abroad?
Why Do You Need a Forex Card for Your Next Trip Abroad?
Are you bitten by a travel bug? Is a holiday abroad on the cards? Perhaps a Mediterranean destination! The thought itself could be quite exhilarating— the grandeur of the Roman ruins in Athens, snorkelling in the wonderful Mediterranean off the coast of Spain or sipping away your stress with Turkish tea at Kusadasi. The world’s your oyster. However, the initial excitement eventually gives way to a major concern—finances. What if you run out of cash? What if your debit card is declined during a purchase? Well, that should not spoil your zing. A forex card could just be the perfect ally in your upcoming international trip.
What’s a Forex Card?
Forex cards are prepaid travel cards meant especially for those who are travelling internationally. It’s accepted in most countries. These cards are usually issued by banks and also companies like American Express and UAE Exchange and Financial Services. You may opt for your forex card online anytime, anywhere. You can use the card to cover your expenditure and withdraw the necessary amount of cash (foreign currency) from any ATM in the country you have visited. However, a forex card, unlike a debit/credit card, attracts no cross-currency charges or transaction fees and the exchange rate does not vary once the card is loaded. You can pre-load the card with one or more currencies—at times even up to 15 currencies. With a forex card, you can pre-set your expense limit. Hence these cards are much more economical as compared to any other domestic cards. You can also refill your forex card if and when required.
Benefits of Forex Card
A forex card could be convenient over any other conventional cards—such as a debit or credit card—and even cash in a number of ways:
● Charges nominal foreign currency mark-up fee:
When you use a domestic card for transactions made abroad, you pay an extra cross-currency mark-up fee of 2-3.5 per cent of the transaction value. With forex cards, you give this charge a miss if it’s used within the same currency jurisdiction for which it’s stocked. In case you are travelling to multiple countries, go for a multi-currency forex card to avoid paying a cross-currency fee of up to 3.5%.
● Cushions you from the volatile foreign exchange conversion rates:
You lock in the foreign exchange conversion rate the moment you load your forex card. Unlike a credit/debit card, you do not have to pay the prevailing foreign exchange rates with forex cards. Hence, you can more or less stick to the travel budget even when there’s a fluctuation in the foreign exchange rate at any point in time during your visit abroad.
● Available made-to-order:
Different people opt for different types of forex cards, based on their requirements. Two types of forex cards are widely used—single currency cards and multicurrency cards. If you wish to use the same forex card across different countries, steer clear of any high cross-currency charge by loading a multicurrency card with different currencies. Discounts are offered to frequent forex card buyers. Special forex cards are also available for students, which can also be used as a global student ID.
● Safe and secure:
In case your forex card gets stolen, misplaced or lost, you may instantly block the card. Additionally, you may transfer the balance amount from your lost/stolen/misplaced forex card to another account immediately.
● Easy usage:
Forex cards are already pre-loaded. It sets a limit on your expenses. Also, forex cards can be booked anytime, anywhere. You can also get a forex card issued online. You may replenish a forex card whenever required.
● Less ATM withdrawal expenditure:
When you use a credit/debit card to withdraw cash in an ATM abroad, your bank charges you for the foreign transaction—foreign country transaction fee, withdrawal fee and interest charges. However, with a forex card, you only pay a nominal cash withdrawal fee which is much less than that of a credit/debit card.
● No foreign exchange charges are applicable:
You are charged a foreign exchange conversion fee every time you transact using your credit card. Whereas, no such charges are levied on your transaction made via forex card. That’s because your currency already gets converted when you load the forex card and are, therefore, pre-loaded with foreign currency.
● Widely acceptable:
Forex cards are very popular among international travellers. You can use it at most merchant establishments almost throughout the world.
Insurance Benefits
Forex cards are a very reliable, safe and secured means of carrying money while travelling across the globe. However, it also comes with some insurance benefits. Many companies or banks issuing forex cards often liaise with insurance companies in order to safeguard the cardholder in case of an emergency such as theft of cards, etc. Some banks issuing forex cards also incorporate some benefits associated with international travel insurance plans. Some of the insurance benefits offered most frequently with forex cards are:
● Coverage against card theft
● Cover for accidental death, such as air accident death
● Cover against Loss of card
● Cover against loss of personal documents
● Cover against baggage delay
● Cover against flight hijacking
However, your forex card only offers limited insurance coverage. For instance, medical care benefits are often excluded from forex card insurance. If you buy a standard international travel insurance plan, you are liable to enjoy its myriad benefits that aren’t usually tagged with a forex card. Hence, speaking from the insurance benefit point of view, a forex card is no alternative for international travel insurance.
Conclusion
Opting for forex cards before your next trip abroad would be a sensible thing to do. It would save you the stress of running out of cash in a foreign country. If you are considering a debit or a credit card for the same then you might want to give it a second thought—using them can lead to unwarranted expenses, blowing up the overall budget of the trip. You can never be sure of the currency conversion rate at the time of the transaction and also end up paying extra charges. Since forex cards are pre-loaded, it also helps you cut back on unnecessary expenses and limit your expenditure. Plus, it covers several international travel insurance benefits at times. Hence, a forex card could be one of the travel backpack essentials.
Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.
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