International travel offers many exciting opportunities to explore different cultures and experience new places. However, one aspect that many travellers often overlook is understanding how to best manage payments in foreign locations.
Using credit cards abroad usually incurs additional transaction fees that can significantly increase overall expenses. As people are traveling more than ever before, it is important to be aware of the various charges involved when making purchases overseas on credit cards issued in India.
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Credit card fees
- Credit cards issued in India typically charge foreign transaction fees ranging from 2-3% of the transaction amount. These charges are levied on top of the purchase price.
- Foreign transaction fees, also known as cross-border transaction fees, are imposed whenever a transaction is processed outside the country where the card was issued. Credit card networks like Visa, Mastercard, as well as card issuing banks add these charges.
- There are usually two components – a currency conversion fee charged by the card network and a processing fee charged by the Indian bank that issued the credit card. Together, they can significantly increase the cost of purchases overseas.
- For example, on a purchase of 5000 Thai Baht (approx. Rs 1500), a 2% fee would add Rs 30 to the cost. On a vacation, such charges on multiple purchases can easily run into thousands of rupees. It is important to choose cards carefully to minimise this overseas expense.
By understanding the various fees involved, travellers can make an informed choice of credit cards and manage costs better during international trips.
In the following sections, we will explore suitable card options and tips to avoid foreign transaction penalties.
What you need to know about credit card foreign transaction fees
- With the growth of e-commerce, Indians are increasingly shopping online from international websites and marketplaces. Online purchases in foreign currency also attract overseas transaction fees.
- Most Indian banks that issue credit cards have a foreign exchange mark-up on the currency conversion for such online transactions. Typically, between 3-5% is added to the exchange rate.
- For example, on converting $50 to Indian Rupees, a 3% mark-up on the exchange rate can increase the cost substantially. Regular online shoppers need cards that exempt overseas e-commerce buys from additional charges.
Choosing the appropriate credit cards is key to avoid high foreign exchange costs when shopping online from different countries.
How to select the right credit card to use abroad
Select a credit card that allows you to save on foreign currency mark-up fee. For instance, the IndusInd Bank Legend Credit Card offers a discounted foreign currency mark-up fee of 1.8% on international transactions. This can translate into significant savings over the long term.
In addition to this, the Legend Credit Card also comes with a range of world-class privileges on travel, shopping, and dining.
The best part is that the process to apply for the Legend Credit Card is 100% digital, so you can apply for it from the convenience of your home in just a few clicks. Click on the credit card apply online option today!
To sum up
With the variety of credit card options available in India today, travellers have greater flexibility to choose networks and issuers that best suit their spending needs overseas. By doing thorough research in advance, comparing various cards based on transaction fee structures, foreign currency conversion charges and other benefits, one can certainly optimize their travel finances.
International trips should be about creating lifelong memories rather than worrying about credit card surcharges. With adequate planning and selecting the right payment cards, all the enjoyment of exploring new destinations can be had without any unexpected monetary surprises post vacation.
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