Prepaid Forex cards, Debit cards, Credit Cards, Merchant Service fee, Fx Fee…AAARGH!
Travelling abroad soon and confused about which card to use for Forex? Fret not, for here’s a handy list that will help you sail through the Fx maze effortlessly. (And psst…Prepaid Forex Cards are the clear winner)
FAQs for Credit & Debit Cards Used Internationally
Why is my transaction calculation and final card statement differing?
There are two entities involved when you use your Debit or credit card to make a transaction internationally – the first entity being the card issuing bank and the second, your platform provider like VISA or Mastercard. These two entities apply additional fees for a foreign credit card transaction resulting in an additional cost of 4-6% and 3.5% respectively. Hence your initial transaction calculation and the one appearing on your statement will differ.
Are there any specific charges to be applied? To what extent I can be charged?
Different card issuers/ Platform providers have different schedule of charges, but these can broadly be classified as:
- Currency Conversion fee – Since your card is Indian in origin, your balance/charges are automatically in Indian Rupees. When you do a transaction overseas, say 100 USD, you will be charged a foreign currency conversion fee on this value. The platform provider automatically charges a 4-6% fee on foreign currency exchange and anything in excess of it is generally a margin of profit for your card issuing bank.
- International Transaction Charge – Irrespective of the currency, transaction amount, or cash withdrawal, your card issuing bank charges a Foreign Transaction charge, which is approximately 3.5% of the total transaction amount.
- Credit Card Cash Advance Fee – its common knowledge that cash advances are expensive even within the country. If you are using your credit card overseas, withdrawing cash will definitely increase your Transaction fees. You can be imposed anything from 1%-4% of additional fee every time you carry out an overseas cash withdrawal. You will also be charged the standard cash withdrawal rate for your credit card together with the international cash withdrawal fee.
Why does the exchange rate on my statement differ from the one at the time of transaction?
The exchange rate that is applied to a transaction is the exchange rate as of the day of settlement, which is the day that Platform provider determines the settlement amount to be exchanged between the acquirer and the issuer. The settlement date is therefore typically different from the date of the actual transaction. So don’t be surprised if the exchange rate you were using for calculation differs from what has actually been charged, as your transaction might have been posted one or two days later by your merchant.
Can I understand these charges before I spend?
To avoid surprises in future it’s advisable to be equipped with the complete knowledge of charges which will be applied on your Credit or debit card transaction. The data of Foreign Currency Conversion fee is available on your Platform provider’s website. Please refer to it before you travel as these rates are dynamic.
Data of Foreign Transaction Charges and Cash Advance Fee is available with the card issuing bank and can be gathered via their customer care or website. These charges are also dynamic and you might see them fluctuating at regular intervals.
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