The use of a Forex card in a foreign country might seem simple, but there are numerous hidden charges. It is difficult for customers to understand these Forex card charges, and they can be quite surprising when compounded over time.
Alternatively, you may not have read the guide or documents that came with the Forex card for a long time, so you blame the issuer. Furthermore, it’s likely that those responsible for issuing forex cards would also tell half-truths.
The following are some hidden fees you may encounter when using your forex card abroad:
- ATM withdrawal fees:
When you withdraw money from an ATM machine in another country, you might be charged a fee. Make sure you check with your card issuer about ATM fees and charges before withdrawing cash. The ATM vendor might also charge a fee for withdrawals, so please check with the bank associated with the ATM.
- Forex Card activation fees:
There are some card issuers who charge a preliminary fee before delivering the forex card.
- Charges for obtaining a transaction slip:
When you withdraw funds from an ATM machine with your Forex card, you can obtain a transaction slip. You should be aware that there will be a hidden charge applied to your card if you print a withdrawal slip.
- Balance Enquiry Fees:
You may feel the need to keep track of your card’s balance while traveling abroad in order to prepare your budget. The balance of your forex card can be checked at any ATM; however, even a simple balance inquiry will cost approximately 0.5 US Dollars.
- Cash Advance Fee:
A cash advance fee is a charge by the bank for using a credit card to get cash. This fee could be a flat per-transaction fee of ₹250-500 or 3-5% of the cash advance amount.
How to avoid cash advance fee: The only way to avoid a cash advance fee is by not withdrawing cash on your credit card. If it’s unavoidable, try to minimize the amount of cash you withdraw on your credit card to pay a lesser fee.
- Currency Conversion Fee:
When converting from one currency to another, a credit and debit card network provider (such as VISA, Mastercard, or American Express) charges 1% of the purchase price.
- Dynamic Conversion Charges
In certain countries, the acquiring banks may choose to activate the feature of “Dynamic Currency Conversion” on their ATMs and POS Machine networks. As per this facility, the ATM/POS machine identifies the Forex Card as a card issued from a foreign country and prompts the customer to transact in their “home currency”(in case of Indians, this would be Indian Rupees).
In DCC, the currency conversion is done by the Acquirer Bank of the Merchant and they have the freedom to apply a conversion fee as high as 3-12% (or more) of your transaction amount.
If you wonder what’s the difference between currency conversion fees and DCC?
- DCC is also a kind of conversion fee, except it is imposed by the merchant (upon your approval) right at the POS
- The time when you find the actual transaction amount also differs – with the currency conversion fee, you’ll know the final amount only when it gets posted on your app or in the monthly statement, whereas with DCC, you’ll know it right away.
- The currency conversion fee is usually 1% of your transaction amount whereas DCC can be as high as 12%
- The currency conversion fee is mostly unavoidable (unless you opt for a “no fee” card) whereas you have the right to decline DCC to avoid being charged extra. It’s up to you to decide whether knowing the charge up front is worth paying the high DCC fee.
How to avoid DCC: RemitX advises all its customers to make the smart choice — transact in the local currency of the country they’re visiting and not in INR.
- Charges on replacement card request:
If you lose your forex card, you’ll need to replace it. For the card to be couriered in your home country or abroad, you will be charged an additional fee.
- Card inactive Fees:
When you do not use your forex card for 180 days after your purchase, load, and utilize it, it is considered inactive. Consumers would be responsible for the inactivity fee.
- Fees for receiving notifications on SMS:
SMS alerts are always a plus when it comes to your banking transactions. A Forex card, however, charges a monthly fee to cover the cost of the service any time a purchase is made with the card.
As a result, many issuers charge some fees and waive others. Whenever you purchase a forex card, make sure to choose your card issuer wisely and check the fees and charges