Forex Cards 101

By BankBazaar | April 19, 2018

Here’s a comprehensive guide to everything you need to know about Forex cards. Read on.

If you’re someone who loves to travel or keep travelling because of work, Forex cards are indeed a blessing for you. We’ll tell you everything you need to know about them and how they can help you travel better. Let’s start with the basics.

What Are Forex Cards?

A Forex card is a foreign exchange prepaid card that can be used overseas and can also be loaded with multiple currencies. It can also be considered the next generation of travel currency cards that let you preload the card with a single foreign currency.

Forex cards have become super popular with people who travel overseas often because of the sheer convenience of using them. Most Forex cards available today let you load multiple currencies (this could differ based on the issuing bank and the type of card being availed) and also provide the same safety that comes with using a Credit Card like the PIN and chip features.

Additional Reading: Best Way To Carry Money While Travelling Overseas

What Are The Types?

Just like Credit Cards, there are different types of Forex cards to match the needs and preferences of different people. Here are two main types:

Single Currency Forex Card 

This Forex card can be preloaded with only one particular currency and can be reloaded as and when required.

Multi-Currency Forex Card

This card can be preloaded with multiple currencies, depending on the card chosen. Banks, financial institutions and travel agencies often have a choice of cards that applicants can choose from based on the currencies that can be loaded on the cards.

Apart from these two, there are Forex cards that are offered to privileged banking customers or that are by invite-only. These generally have lower fees and charges or additional perks and privileges.

Additional Reading: Top 5 Credit Cards For Airport Lounge Access

What Are The Features Of A Forex Card?

Forex cards have a lot of features and benefits. Here are a few:

  • They are a safe and secure way to make payments overseas as they come with PIN and chip security features.
  • Since they are pre-loaded, it is easier to manage your spends while travelling since you can decide on a budget and top-up the card if and when required.
  • You don’t need to worry about the hassle of finding an ATM to use this card. These are easy to use and widely accepted.
  • They eliminate the need to carry currency around, making them a safer and more convenient option compared to cash or travellers cheques.
  • With Forex cards, you also get protection from fluctuations in currency values. The currency amount loaded into the card is based on that day’s exchange rate, ensuring there is no potential loss as a result of changing rates from one day to another.
  • They are a cheaper alternative to buying currency when travelling, since exchange bureaus and banks charge a fee to convert currency. The exchange rate will also fluctuate, which could result in a loss after all fees and charges have been paid.

Additional Reading: Travelling Soon? Don’t Forget To Pack Travel Insurance!

What Are The Benefits Of A Forex Card?

Some of the major benefits of a Forex card are listed below.

  • Forex cards are a cheaper alternative to exchanging currency, especially at banks. It is cheaper for banks to issue Forex cards, as applicants receive a better conversion rate.
  • Most banks do not need you to have an existing relationship with the bank in the form of a bank account or a Fixed Deposit. Thus, you get to choose from a wide range of available cards based on your needs.
  • Since Forex cards come with all the safety features of a Credit or Debit Card, they are safer than carrying around wads of cash. The chip and pin technology that secures other plastic money is also used in these cards.
  • In the event of theft or loss of the card, you can get it hotlisted by contacting the issuing bank/financial institution and the balance in the card will be frozen.
  • There are no charges when the Forex card is swiped at PoS terminals abroad.
  • Forex cards provide ease of use as they are universally accepted and recognised. Some of them can also be used to make online purchases abroad.
  • The balance on the card can be encashed at the prevailing exchange rate when the cardholder returns.
  • Some card issuers also allow for the card to be temporarily blocked and then reactivated when the cardholder goes abroad again. There are no additional charges such as maintenance charges or penalties for lack of use.
  • Queries or assistance is available round the clock with dedicated helplines and online tracking in case of a query or any issue.
  • A number of card issuers also offer deals and discounts when the Forex card is used, incentivising their use.

How Does A Forex Card Work?

Forex cards work like magic indeed, but have you ever thought what goes behind making them so great? Let’s try and get a better look at how they actually work.

Due to their features like safety, convenience, and universal acceptance, Forex cards are considered to be the future of overseas transactions. They work exactly like Debit and Credit Cards, which explains the ease of use that comes with them.

When applying for a Forex card, it is advisable to look up the various cards offered by banks and other institutions. You can choose between a single-currency card if the trip is to a particular region or country or a multi-currency card in case you plan on visiting different regions. Multi-currency cards can be loaded with up to 16 different currencies.

Once you have submitted all the paperwork and received the Forex card with the PIN, you must change the assigned PIN and check the card balance at an ATM of the issuing bank/financial institution. Alternatively, you can check the balance using internet banking if the issuing bank has this facility.

You can then use your Forex card at merchant establishments overseas by simply swiping/dipping the card (based on the type of card availed). Since the card is preloaded, the balance will reflect the payments charged to the card instantly.

You can keep track of your balance and transactions through methods such as SMS alerts or notifications from the issuing bank/financial institution. Simple, isn’t it?

Additional Reading: Add That Extra Zing To Your Travel Plans With The Yatra SBI Card

How To Use A Forex Card?

Now that you know everything about the working of this magic card, it’s time to figure out how to use it. When abroad, you can use a Forex card at ATMs to withdraw cash or for balance enquiries, statement requests and other such facilities.

When using a Forex card at an ATM, the type of card to be selected for the transaction is ‘Credit Card’. A Forex card can be used as a Credit Card for payments at merchant outlets overseas. Depending on the type of card, it can be dipped/swiped at a PoS terminal and the amount charged will be instantly deducted at source.

How To Apply For A Forex Card?

After getting to know so much about the amazing benefits and features of Forex cards, we are sure you want to get one. To make things easier for you, let’s tell you more about the process of applying for a Forex card.

Applying for a Forex card is a quick and easy process, with a number of banks and financial institutions, as well as large travel agencies offering these cards. All you have to do is—choose the type of Forex card and look at options offered by various issuers. Depending on the time of year, banks offer deals and discounts on Forex cards so it would be beneficial if you looked at all the available options.

Following this, you can visit a bank branch or apply online for a card of your choice. Most banks and financial institutions offer different cards depending on the type of perks and benefits that can be availed. After selecting the card you wish to apply for, you can either visit a bank branch with the required documentation or you could apply online if the facility is provided.

What Are The Documents Required To Get A Forex Card?

While applying for a Forex card from a bank, financial institution or travel agency, you need to meet some crucial criteria before the card is issued. There are also certain documents that have to be submitted. The list of documents required may differ based on the card issuer, but the basic ones required are listed below.

  • Application form
  • Self-attested copy of passport
  • Copy of visa(s)
  • Airline ticket copy
  • PAN card

Based on the card issuer and type of Forex card being applied for, there could be other documents that need to be furnished. This will also depend on the amount you’re planning to load onto the card as well as in case any regulatory changes are made.

Additional Reading: Planning To Get A Travel Credit Card? Few Things You Must Watch Out For

What Are The Fees And Charges Involved?

Applying for a Forex card is a quick and hassle-free process. Fees and charges involved depend on the card issuer, as well as the type of Forex card selected. Multi-currency cards and those with additional benefits are likely to have higher fees associated with them.

There are various types of fees and charges associated with a Forex card. These charges can be broken into two different categories—Forex card fees and Forex card ATM fees. We have explained them below:

  • Forex Card Fees: These fees are levied for expenses related to the physical Forex card and are as follows:
Forex card particulars
Initial fee This is the amount that is to be paid when applying for the card
Reload/renewal fee This amount is to be paid each time the card is reloaded with currency or renewed (in case of inactive cards)
Add-on card fee If applicable, this fee is levied on an additional card that is provided
Encashment charges This fee is levied when the balance amount on the card is encashed
  • Forex Card ATM Fees: These are fees chargeable when the Forex card is used at ATMs and are as follows:
Forex card ATM particulars
Cash withdrawal This fee is levied on each cash withdrawal made while abroad
Balance enquiry This fee is levied each time a request for the card’s updated balance is made
Cross-currency charges In the event the currency on the card does not match the transaction currency, this fee will be levied at the time of making the transaction.
Replacement card fee This fee is levied if a replacement card is to be issued to the cardholder.

Additional Reading: ATM Usage And You

What Are The Dos And Don’ts For Using A Forex Card?

A Forex card is a boon for those looking for a convenient and safe way to make payments when overseas. While Forex cards are safe to use and have a number of benefits, there are also some points applicants should keep in mind when using one.

Dos

  • Do check the balance on your Forex card after each transaction. Most card issuers provide alerts in the form of SMS or email or through online banking. Better safe than sorry.
  • Do take a backup card in the event the Forex card is lost/stolen or malfunctions. While some card issuers provide a supplementary card, this is usually chargeable but is a good contingency. Being prepared is always a good thing.
  • Do change the PIN at a local ATM before leaving for the trip. Set it as something you can easily remember.
  • Do check the expiry date mentioned on the card. Depending on the type of card, it could expire at the end of the month or could be blocked temporarily and activated at a later date.

Don’ts

  • Don’t use your Forex card to pre-hire a room or pay a deposit for a rental house/car/room when abroad. Doing this effectively freezes funds on the card till the bill has been cleared. As a result, it is advisable to use a Credit or Debit Card to pay for a security deposit.
  • Don’t use the Forex card to pay in a currency other than the one loaded on the card. This could result in additional conversion charges being levied in the process of conversion, which could differ from the rates you paid when loading the card.
  • Don’t use the Forex card to pay toll at toll booths when abroad as the prepaid card will not work at such places. It is advised to either use cash or make alternative payment arrangements in such cases.

Additional Reading: 3 International Transaction Charges To Watch Out For When Using Your Credit Card Abroad

What Are The Most Frequently Asked Questions Related To Forex Cards?

Here are some of the most commonly asked questions related to the use of Forex cards.

  • What is the minimum amount that I can load on my Forex card?

It depends on the card issuer and the type of card selected.

  • How do I withdraw money from my Forex card when abroad?

When abroad, you can withdraw money from your Forex card by simply visiting an ATM and choosing ‘Credit Card’ as the type of card. Follow the instructions on the screen in order to make your withdrawal from the card.

  • What is a multi-currency Forex card?

A multi-currency Forex card is a type of Forex card on which multiple currencies can be loaded. These can have up to 16 currencies at a time.

  • Can I reload my Forex card when overseas?

No, most Forex card issuers do not allow you to top up the card when overseas. Instead, you can authorise an individual to top it up on your behalf.

  • How many days prior to my trip can I buy the Forex card?

Subject to meeting the requirements for the Forex card, you can apply up to 60 days prior to your trip.

  • What do I do if I lose my Forex card while overseas?

If you lose or misplace your Forex card, you can contact the card issuer on toll-free helplines and request that the card be blocked. It is advisable to report the theft or loss of card as soon as you realise it is missing.

  • Can I change the foreign currency loaded onto the card back into Indian currency after I return from my trip?

Yes, it is possible to re-convert the foreign currency on the card into Indian currency once you have returned by visiting a branch/office of the card issuer.

  • Will my Forex card come with insurance cover?

Yes, most Forex cards come with insurance cover. However, it is advisable to check with the card issuer prior to applying.

  • How do I cancel my Forex card?

You can cancel your Forex card by contacting the card issuer and submitting a request for card cancellation.

  • Is there a transaction fee each time I use my Forex card?

No, there is no transaction fee levied each time you use your Forex card for purchases abroad, provided they are made in the currency preloaded on the card.

Now that you know everything about Forex cards, it’s time to get one and make it work wonders for you.

You don’t really want a Forex card and would prefer a Credit Card with great travel benefits instead? We might have just exactly what you’re looking for.

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Category: Credit Cards Travel

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