Forex card or travel card is a prepaid card that can be loaded with foreign currency before traveling abroad. It is one of the most convenient and cost-effective ways of carrying foreign currency when traveling abroad as it eliminates the need for carrying cash or traveler’s cheques. Forex cards are issued by banks and financial institutions in India and can be used for various purposes, such as paying for hotel accommodation, shopping, dining, and transportation, among others.
In this article, we will discuss how forex cards work and their benefits and drawbacks.
How does forex card work?
Forex cards work like any other prepaid card, where the user loads the card with a certain amount of foreign currency before traveling abroad. The amount loaded on the card is debited from the user’s account and converted into the foreign currency of the destination country. The card can be used to withdraw cash from ATMs or make purchases at merchants that accept Mastercard or Visa cards.
Forex cards come in two types- single currency and multi-currency. Single currency forex cards can be loaded with a single foreign currency, such as US dollars, Euros, or British pounds, among others. Multi-currency forex cards, on the other hand, can be loaded with multiple foreign currencies and can be used in different countries. Some forex cards also offer the facility of reloading the card while traveling abroad.
Benefits of using a forex card
1. Convenient: Forex cards are highly convenient as they eliminate the need for carrying cash or traveler’s cheques. The card can be easily swiped at merchants or used to withdraw cash from ATMs.
2. Safe: Forex cards are safer than carrying cash as they come with a PIN, which ensures that only the cardholder can use it. In case of loss or theft, the card can be blocked immediately, preventing any unauthorized transactions.
3. Cost-effective: Forex cards offer competitive exchange rates, which are better than those offered by banks or money changers. Also, the cardholder is not charged any transaction fees for using the card.
4. Multi-currency facility: Forex cards offer the facility of loading multiple foreign currencies, making it easier for travelers to manage their finances while traveling to different countries.
5. Online access: Forex cardholders can access their account online and check their balance, transaction history, and reload the card, among other things.
Drawbacks of using a forex card
1. Limited acceptance: Forex cards may not be accepted at all merchants or ATMs, especially in remote areas or small towns. It is advisable to carry some cash or a backup card in such cases.
2. Fees and charges: Some forex cards may charge fees for reloading the card, checking the balance, or withdrawing cash from ATMs. It is essential to read the terms and conditions of the card before using it.
3. Exchange rate fluctuations: Forex cards are subject to exchange rate fluctuations, which may affect the value of the foreign currency loaded on the card. It is advisable to monitor the exchange rates and load the card when the rates are favorable.
Conclusion
Forex cards are a convenient and cost-effective way of carrying foreign currency while traveling abroad. They offer various benefits, such as safety, convenience, and multi-currency facility, among others. However, they also come with some drawbacks, such as limited acceptance, fees and charges, and exchange rate fluctuations. It is essential to choose a card that suits your needs and read the terms and conditions carefully before using it.
