Home > Blog > Forex Card vs Credit Card – Which is the Better Option for International Travel?
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It was a bright sunny morning when we reached Lake Geneva Castle in Switzerland. We needed to park the car and it required Swiss francs to do so. Since my friends and I were travelling from Paris, all we had was euros in cash and some dollars in our Forex card. We spent an hour looking for a bank, exchange euros for Swiss francs, paid for parking and then could go on our way for the tour. If only we had our cards loaded with Swiss francs as well, it would have saved us the time of bank visits and exchange rate charges.
Vacations are all about relaxation and hassle-free enjoyment. But these kinds of issues may disrupt your peace of mind and ruin moments which would otherwise have been cherishable.
Is a Forex card Better than Cash?
For many international travellers, Cash still seems to be the best option to carry foreign currencies during international trips. However, there are several issues with carrying cash, which have been mitigated successfully by the launch of Forex Cards.
Convenience
This has been the major driving force in the popularity of a forex card. Right from applying for the card, to using the card in a foreign destination it can all be done without any human interference and in less time. You can apply for a Forex card on the online portal of money exchangers, and load it with the required amount and type of currency. The loaded card and the pin will be despatched to your communication address.
Moreover, when you travel to different destinations which require you to carry more than two types of foreign currencies it becomes simpler to carry one card with multiple currencies than to carry a bulk load of different currencies. It becomes difficult to keep track of your expenses in cash. In some places, cash might also not be acceptable for their convenience of direct payment to the linked bank accounts.
Safety and Security
There is no place in the world which is completely a crime-free zone. The bulk of cash once stolen cannot be recovered and there is no instant resolution. But even if a card is stolen, due to its security features like pin protection, insurance coverage, card locking facilities etc.
Rate Volatility
Forex brokers at airport kiosks exchange currencies with additional fees and commissions which can be avoided with a card. While using banks to exchange currencies, the changing rates, transfer fees and charges for exchange increases the cost of FCY considerably.
Cost-Effectiveness
The cost of purchasing cash is always expensive. It is because FCY rates are static and forex card loading rates are governed by market dynamics. Moreover, the supply of cash is restricted and is not handed over in real-time unlike cards. Forex cards are loaded with currencies based on real-time exchange rates which also gives a transparent picture of the cost of exchange to consumer.
Number of Exchanges
In cases where your cash is exhausted, you will need to find a money exchanger, who will accept your home currency and give you the foreign currency required. Dollars and Euros are still acceptable in most places, but Indian rupees might just be refused for any exchange purposes. In the case of Forex Cards, you can reload the card online just from anywhere in the world.
Which Forex Card is Better
Currently, there are several good forex cards offered in the exchange markets. It may be overwhelming to decide which Forex card is better for your travel purposes. These amazing benefits of a foreign currency card not only save you hassles at an international location but also save you a truckload of money:
Cashless Transaction
First and Foremost it helps in going cashless while travelling abroad. It prevents you from the worry of getting stolen and stranded in an unknown location. The world is going digital and so should you.
Suspicious Transaction Alert
If you use your international debit and credit card, nowadays banks can raise a suspect alert and block your card without notice if it is used in a foreign location. With a Forex card, you can save yourself from embarrassing situations like this as it is not linked to your bank accounts.
Duplicate Card Issuance
A good Forex card will have the facility to issue duplicate Forex cards if the original is stolen or lost. The remaining amount is then automatically transferred as the new card balance. Thomas Cook Borderless Multi Currency Prepaid card backup card is available at zero cost and free replacement of lost or stolen cards is also made available.
Ease of charging
If you are on a long vacation and not sure how much currency to load or if you are a frequent traveller, recharging your travel card is the easiest thing that can be done on the move. You can recharge Thomas Cook’s Borderless Multi Currency Prepaid card by accessing their website or by downloading their mobile app.
Load Multiple Currencies
Multi currency Travel cards help you carry or load multiple foreign currencies in one single card. The card can detect the currency of the transaction and debit the required amount from that currency bucket in the card. This saves you time and exchange rate loss if you are travelling from a country with a weaker currency to a stronger one. With the Thomas Cook Borderless Multi Currency Prepaid card, you can load 10 different currencies and can be swiped across 35 million Mastercard Merchants and 70 Million Visa Merchants in over 200 countries. It is also enabled with automatic detection of currency based on the country of transaction.
Management of Expenses
Along with safety and security features embedded in the cards, these also help you in managing overspending. It enables you to set your limits within the total limit of foreign currencies you are allowed to carry. It is a smart way to keep your spending within regulatory limits and still enjoy hassle-free shopping.
Forex Card Vs. Credit Card
It is presumed that the next best thing to carry cash to international destinations is international credit cards. Banks pitch credit cards stating international use as one of their unique selling feature. But travel card also scores over credit cards in certain points:
- The foreign exchange rate is locked once your Forex Travel card is loaded. Whereas credit cards use the real-time rates of exchange during the transaction. It actually can affect your travel budget significantly as the rates are out of your control. Forex card saves you from future fluctuations of currency.
- The markup fee charged for a transaction done on the credit card is over and above the actual transaction value. The markup fee ranges from 2 -3.5% with the addition of service tax and charges. Forex cards due to their facility to load multiple currencies do not incur any markups as there are no exchange rates involved.
- ATM withdrawal expenses are even higher in the case of credit cards. In case of ATM withdrawal with a credit card at an international location, you not only pay interest charges, you need to pay foreign currency transaction fees and withdrawal fees. But in the case of Forex Card, there is a fixed withdrawal fee only.
- There is no hassle of late payment charges in the case of a Forex card. You can load the card and use and reuse it while on repeated international trips. For a credit card, you need to make payment on time within the bill date or else you incur late payment fees. Moreover, you can incur overdraft charges if it is swiped beyond your eligible credit limit. Hence, the Forex card offers smart expense management abroad.
International Debit Card vs Forex Card
Although debit cards are enabled for international use, they can be extremely risky and expensive when compared to forex cards:
- First, any debit card is linked to your account, so having an account is mandatory for having a debit card. In case of theft or loss in a foreign location, your entire savings is at risk and your account can also be hacked if debit card information is available.
- As per RBI norms, banks can block your debit card usage anytime they suspect fraudulent transactions happening abroad with your card. So it may happen that you are stranded without any money in a foreign country.
- Other than that, it also incurs currency rate fluctuation loss and markup fees along with hefty ATM withdrawal fees.
Final Choice
Multi currency forex cards score high on the travel companion list. It saves you from high exchange rates, secures your funds from theft or loss, helps you manage your multiple currencies efficiently, and makes your vacation perfect in every possible way. Undoubtedly it is the best card you can carry over cash, debit or even credit cards for your international travel. Ensure you check out the Thomas Cook Borderless Multi Currency Prepaid card if you are planning for an out-of-India travel shortly.
