Forex options if going abroad

Ever since her Schengen visa arrived, Maanya Arora has been excited about her trip this winter to Switzerland, France and Italy, with a quick detour to Norway to catch the Northern Lights. A Dubai transit visa means she might step out for some shopping. “Italy and France use the Euro, Switzerland uses Swiss Franc, Norway the Norwegian Krone and Dubai the Dirham. Carrying so much cash won’t be practical and most credit/debit cards have a huge markup fee and conversion charges,” says a confused Maanya. So, what’s the best way to pay when travelling?

Forex (prepaid) card: Widely accepted, the multi-currency cards let you load different currencies at a locked exchange rate. These work well for frequent travellers since the balance amount keeps lying in the card till the next visit. Reconversion fee needs to be paid if changing currency back to INR. For transactions where the transaction currency is different from the currency available, banks charge an additional cross-currency markup.

Credit and debit cards: Accepted globally, credit cards are very convenient, especially for bigger purchases, but these often come with steep conversion charges. Most banks charge a foreign transaction fee of up to 3.5 per cent. Also, since July 2024, overseas credit card spending above Rs 7 lakh is taxable. Debit cards give the option to use the ATM to take out cash, but there’s a high bank conversion fee. Make sure the credit and debit cards are activated for international use.

Cash: Carrying cash can be bulky and entails risks but in many places, it may be a better option. In countries like Turkey, Malaysia, Seychelles and Thailand, local vendors and transport services prefer cash. The rates at airport kiosks and hotel currency exchange can be high. Look for well-reviewed options in the city or use local ATMs for better rates. Euro and US dollar are easily exchangeable for local currency.

Says Vikesh Sharma of Chaudhary Forex, Chandigarh, “Travellers can carry a cash equivalent of $3,000. The purchase must be made through authorised dealers using valid documents (passport, visa, ticket, PAN card).”

UPI interface: Select countries like UAE, Singapore, France, Nepal and Bhutan have started accepting UPI payments. Just like in India, you can scan QR codes using Google Pay, Paytm or PhonePe (International UPI needs to be activated). Conversion charges apply. Check if the apps have daily transaction limits.

A smart mix can ensure a cost-effective travel. — TNS