Every overseas payment has a price: the exchange rate, your bank’s FX mark-up, and sometimes extra fees. Forex cards lock a rate when you load money, so costs are predictable. Credit cards are easier to use, but many add a foreign currency mark-up plus GST on that mark-up. Always pay in the local currency and decline dynamic currency conversion at the terminal.
What to know about TCS
Loads to forex cards can fall under the LRS rules and may attract TCS once you cross the yearly threshold. Regular personal swipes on credit cards abroad are usually treated differently. Rules evolve, so before you travel, ask your bank or issuer how TCS applies to your trip and keep records for your tax return.
When a forex card works better
If you want a fixed travel budget, predictable rates, or plan to withdraw cash from ATMs, a forex card helps. You can preload only what you plan to spend, hold multiple currencies, and avoid per-transaction FX mark-ups. It’s also useful for students or family members where you want a hard spending cap.
When a credit card wins
If you value lounge access, travel insurance, rewards, and strong dispute rights, a low-mark-up travel credit card is hard to beat. Hotels, flights, car rentals, and restaurant bills usually go through smoothly, and rewards can offset costs. This works only if you pay the full statement on time—interest wipes out gains in one cycle.
A simple plan most travellers can use
Carry both. Use a rewards credit card for big bills and online bookings in the local currency. Keep a forex card for ATM cash and for shops that prefer prepaid cards. If one card is blocked or a 3-D Secure check fails, you have a backup.
Your five-minute pre-trip checklist
Call your bank to confirm foreign mark-up, ATM fees, and any TCS treatment for forex loads. Enable international usage and set SMS or app alerts. Note your issuer’s helpline and block numbers. Set spending limits in the app for both cards. Carry a small amount of local cash for taxis and tips on day one.
Common mistakes to avoid
Don’t load a forex card at the last minute when rates are spiking. Don’t accept dynamic currency conversion—it’s expensive. Don’t take cash advances on credit cards unless it’s an emergency. Don’t ignore reward caps; after the cap, your effective return drops. Don’t forget to keep invoices and bank messages if you plan to claim TCS credit.
The bottom line
Most people save more with a two-card setup: a good travel credit card for large, card-friendly spends and a forex card for cash and small merchants. Pay in the local currency, know your fees, and clear your credit card in full. Do these three things and your overseas rupees will go further with zero drama.
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