Compare forex cards on total costs and complete transparency in charges

A card with zero cross-currency conversion charge will allow you to load US dollars and then spend in any currency without incurring further charges

Thomas Cook India has relaunched its One Currency Card with zero forex mark-up and zero cross-currency conversion charges. The card allows travellers to preload US dollars, lock in the exchange rate before travelling, and spend in other currencies without additional conversion costs. 

Benefits of zero forex mark-up 

Zero forex markup removes the additional charge that is normally applied over the prevailing interbank exchange rate. “It produces immediate savings when foreign exchange is loaded onto the card,” says Deepesh Varma, chief business officer – foreign exchange, Thomas Cook (India). 

This is a major cost in the purchase of a forex card. “Forex markup generally ranges from 0.75 per cent to 2 per cent, depending on the provider, currency, and transaction value. The average is typically around 1.5 per cent,” says Varma. 

Zero cross-currency conversion charges 

If the card is loaded with one currency and the user wants to make payment in another currency, then a cross-currency conversion charge typically applies. “A cross-currency conversion charge of 2–4 per cent may typically apply when a US dollar-denominated card is used for a payment in another local currency,” says Varma. 

The benefit of having zero cross-currency conversion charge is that the customer can load US dollars and use the same card across multiple destinations. “Zero cross-currency charge removes the additional cost that may arise when a US dollar-denominated card is used in another local currency,” says Varma. 

The customer does not need to load a different local currency before every international trip or load multiple currencies before a multi-country trip. “Combining an exchange-rate lock with zero cross-currency charges can reduce the cost of multi-country travel,” says Vishal Dhawan, chief executive officer (CEO) and founder, Plan Ahead Wealth Advisors. 

Forex card benefits 

A good forex card reduces the need to carry cash. 

prepaid forex card allows the traveller to lock in the exchange rate. “Locking in the rate is beneficial when the rupee is expected to depreciate. It protects the traveller from exchange-rate movements during the trip,” says Dhawan. 

Forex cards offer more competitive exchange rates than most debit or credit cards. “Many debit and credit cards levy forex markup or cross-currency charges of around 3.5 per cent plus applicable taxes,” says Gagan Malhotra, Chief Operating Officer, BookMyForex.com. 

A traveller, however, needs to contact the provider to reload a depleted forex card. A lost forex card loaded with a substantial balance could be misused. “The risk arising from a lost card may be lower in a credit card,” says Dhawan. 

Selecting a forex card 

A low forex markup fee should be a top consideration. “The exchange rate should be as close as possible to the mid-market rate. The exchange rate markup should be transparent,” says Taneia Bhardwaj, South Asia Expansion Lead, Wise. 

“A spread of around 1 per cent is a reasonable rule of thumb. Around 1.25 per cent may be acceptable in exceptional cases where the card offers greater convenience,” adds Dhawan. 

Zero cross-currency conversion charge is useful for multi-country travel. Travellers expecting to withdraw cash should avoid high cash-withdrawal charges. 

Assess other fees. “Multiple charges for loading, cross-currency usage or inactivity can raise the cost of a forex card,” says Bhardwaj. 

The card should support multiple currencies. “It should allow spending in a local currency even when the traveller does not already hold it,” says Bhardwaj. 

The card should have wide acceptance—at merchants, restaurants, hotels, and ATMs across destinations. “Acceptance on a globally recognised payment network improves reliability,” says Varma.

 

Digital onboarding should be convenient. App-based card controls should make managing the card easy. “Travellers should check how easily the card can be topped up,” says Dhawan. 

Real-time spending notifications can improve visibility and security. 

The card should offer effective security controls. “The user should be able to change the PIN, lock and unlock the card, and enable or disable ATM transactions easily,” says Dhawan. 

Emergency assistance should be available. “Card-replacement support can be valuable if the card is lost or compromised,” says Varma. The card should also come with insurance coverage. 

Some cards levy dormancy fees after three, six, or 12 months of non-use. “If a card levies a dormancy fee, then assess your expected frequency of use,” says Dhawan.

 

Charges issuers levy 

    Exchange rate markup: Varies, 2-4% among traditional providers

    Currency conversion fees: Often around 3% 

    ATM withdrawal charges: Varies, commonly around US $2 (or equivalent) per withdrawal 

    Card issuance fees: ₹300–500 

    Card reload fees: ₹75–100 per reload

    Card replacement fees

    Inactivity or annual fees: Typically charged after 12 months 

    Charges for closing the card or withdrawing the remaining balance 

Source: Wise