This summer, reap the benefits of travel cards :: Business Line

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You don't need to have an account with a bank that offers forex travel card. So, you can just choose one that best fulfils your needs.

Is the summer vacation taking you across the seas? While you spend time putting together your travel plans, spare a thought to money management.

From taking loads of cash and travellers' cheques to international debit and credit cards, there are options. What should you carry?

For those roadside knick-knacks, rail and tram rides and emergencies, you definitely need some cash. For expenses such as hotel deposits and car rentals, credit cards would suit you better as the amounts will be blocked for sometime. For all other spends, you can carry a pre-paid travel card.

A NOTCH ABOVE

Pre-paid travel/forex cards score over the other options. When you load your card locally, you lock into the exchange rate prevalent on the day you buy the card.

With the US dollar being a widely accepted currency across the world, at no time does this proposition make more sense than now. Swiping your credit card when the rupee is depreciating will make you shell out more for every dollar.

Secondly, cross-currency transaction charges occur each time you swipe your debit/credit card. In these travel cards, it is charged only once, when you buy the card.

Finally, multi-currency cards have made their way in.

So if you are hopping from Paris to London, these cards will come in handy. ING Vysya Bank, for example, loads the same card with four different currencies — US Dollar, Pounds, Euro and Australian dollars.

CHOOSE WISELY

Several banks offer forex travel cards. Since you need not have an account with the bank to own such a card, you can choose the one that best fulfils your needs.

For example, banks predominantly offer US Dollars, Euro and Pound options. But what if you are travelling to Singapore or Dubai?

Then, you could perhaps choose Axis Bank or SBI, among others whose cards can be denominated in Singapore or Canadian Dollars, Yen, Dirhams or Riyals in addition. That way, the exchange rate will be locked-in.

Otherwise, a US Dollar card swiped in Dubai will be subject to fluctuations in both currencies. Besides, banks may also charge cross-currency mark-ups for such transactions.

While the Foreign Exchange Management Act (FEMA) fixes a ceiling of $10,000 a year for holidays and personal visits, banks have their own minimum and maximum limits for these cards. So, if you want to be careful about what you spend, a good idea would be to choose cards that have low minimum limits and load only so much onto the card or choose ones with lower maximum limit. This way, you can consciously keep a check on your expenses and think twice before reloading the card.

Banks such as HDFC Bank offer different cards to suit different classes of customers. Besides the plain vanilla ‘Forex Plus' card, it offers a ‘Forex Plus Chip' card.

If you are travelling to countries where the risk of misuse of the card is high, you will be better off selecting a ‘Chip' card, which offers higher protection against skimming and cloning.

ADDED ATTRACTIONS

If you do your homework well, you can get cards with several added features. For example, if you carry a Corporation Bank travel card and lose it abroad, $17.50 is charged for expediting a replacement card.

However, some banks such as Kotak and ICICI issue a secondary/back-up card that can be activated immediately in case the primary card is lost, stolen or damaged.

Similarly, while banks refund the unused balance once you are back, some allow you to keep it in a Resident Foreign Currency (Domestic) Account.

There is no ceiling on the maximum deposit into this account. Besides, though the card comes with an expiry date, you can let balances up to $2,000 (RBI limit to forex holdings by resident Indians) remain on the card if you plan another trip before that.

Other features offered by some banks include facility to use the card for online transactions when abroad, and online access to card details.

Insurance coverage for card loss, delay in receipt of checked-in baggage and personal accidents is also offered by many.