The summer might be far off, however, making travel plans can always start early. In this issue of Feeds we are going to tell you all about Forex cards.
What are Forex cards?
Forex cards are the latest in the global travel currency market. They are essentially cards onto which currency is ‘topped up’. They can be spent in a number of countries albeit with certain limitations and conditions. Most banks (HDFC, Visa, Bank of America etc.) offer this service. These cards then replace our standard credit and debit cards for their superior benefits over a short period of time spent overseas.
Get a prepaid travel card
- Get your documents in order: Passport and its copy, a PAN card copy and an A2 form. Bank policies may require additional documents such as a copy of the airline ticket or an application form.
- Visit the bank branch with completed documentation. Most banks do not require that you have an existing account with the bank.
- Alternatively, apply online. (https://itreasury.icicibank.com/forexatclick/-forms/PassportDetails.aspx)
- The card will be loaded instantly and is ready for use! FAQs: http://www.axisbank.com/personal/forex/multicurrency-forex-card/faq.aspx
How do they work?
A range of currencies can be loaded on the same card (so it works even if you’re visiting many countries) beforehand and goes into different currency “purses”. You will be allowed to pick the default currency which is important when you are reloading funds, as the default currency determines the purse that your funds will be allocated to. Different cards will have different currency options and limits on how much you can load onto the card and spend. Once you load your card with your budgeted amount for each country, it’s converted to the foreign currency charged at a foreign exchange rate. A fee is charged for each conversion.
When you make a Point of Sale (POS) purchase or withdraw cash at an ATM overseas, it comes out of that particular currency purse provided you have that currency on your card. If you run out of one currency, your card will start converting the currency from one of your other purses. Conversions like this happen at the current exchange rate for that day and will cost you a currency conversion fee. The card will utilize the money you have in other purses depending on the order of currencies ordered on your card. This order is preset on some cards while others allow you to set your own.
A fee may be charged if you haven’t used your travel card for a while. You don’t earn any interest on the funds on your card, so if you’re just using it for a one-off holiday, it’s a good idea to change any unused currency when you get back home. Just like changing cash, there’ll be an exchange fee for this too. Travel cards usually have an expiry date, which can be 12 months or a few years or more. If your card expires, you may forfeit any unused funds.
By Swathi, Jeswin, Nishit