Which is cheaper Cash or Card? What are Double Conversions?

The first financial instinct of any traveler going on an international trip is to buy cash at the best forex rates they can find, segregate it into small wads and stash them away at seemingly ‘safe’ locations like that suitcase lining, a rolled up pair of socks, secret wallets or a child’s backpack. Our question is this– why carry so much cash, when you have the convenience of loading it all on a Forex card? To which a most likely answer would be, rates. Cash is easier to acquire.

This is a misconception. Cash is harder to come by and subject to availability in the market as opposed to Forex cards which can be loaded with a currency of choice, and are independent of market availability.

Sometimes ordering a Forex card in USD and withdrawing the money in local currency is cheaper than buying cash directly. Though an end user might think “ Wait! If I buy a card in USD and travel to China with it, I will essentially be converting my money from the Rupee to Dollar and from Dollar to Yuan. This double currency conversion will cost me a ton, so let me carry cash directly!”

To which we say, No. You will end up saving money on an online forex card despite this double conversion rather than buying cash directly. Consider the following example.

USD Inter Bank Rate (IBR) : Rs.61.65

CNY IBR : Rs.9.933

Forex rate in India for USD on card : Rs.61.98

Forex rate in India for CNY in cash : Rs.11.67


If USD 1000 is purchased on Forex card for spending in china = Rs.61980

Cross currency charges for converting USD to CNY at *3.5% = Rs.02169

Total INR spent after converting INR~USD~CNY = Rs.64149


The cost of INR to CNY is usually around 10.35, a rate inclusive of misc charges

Total CNY from USD on forex card = Rs.64149/ 10.35 = 6200 CNY

If buying 6200 CNY in cash directly= 6200 x Rs.11.37 =Rs.72354


Therefore, cost per CNY if bought through forex card = Rs.10.35

Cost per CNY if bought through direct cash= Rs.11.37

 In a nutshell, if you purchase Chinese Yuan in cash directly, you will end up spending an  extra 13.28% on your Forex!