Need a Forex card to travel abroad? Know how they work and when they don’t
You take a forex chart with your bank before going abroad, then to your dismay, you are unable to initiate the transaction.
“I am in a North African country for an office job and I tried to use my bank’s forex card to buy coffee, but the card refused. Then I tried to pay with the same forex card to the taxi driver, but that was also declined! Not sure why this card was declined, when about a week ago in Paris it was accepted everywhere. Any help will be appreciated,” That’s what a harassed traveler wrote in a social media post asking for advice or help with the matter.
Well, things like this happen, and so it is important that you keep up to date with proper forex chart information.
Now with the FIFA World Cup 2022 around the corner you will probably need a forex card before attending the show in qatar later this year
How to get a Forex card?
Amitabh Bhatnagar, Head of Trade and Foreign Exchange and Diplomacy Segment, RBL Bank, explains the first question that consumers usually ask about forex charts i.e. how do I get one?
It says, “A customer can go to any bank branch to apply for a ‘multi-currency borderless card’. The required documents are a valid passport and visa, and a PAN card. Along with these documents, a form A2 and an issue form will be provided by the bank which the customer must complete and submit.”
Regarding the balance limit up to which one can load his forex card, Bhatnagar says, “As per RBI’s liberalized installment scheme, up to $2,50,000 equivalent in a financial year can be loaded on the map.”
But note that this is the total LRS limit for all types of exchange transactions, such as remittances and cash purchase of forex currencies, among others. This is therefore the common limit for all foreign currency transactions.
How to load the balance of a Forex card?
Swapnil Bhaskar, Head of Strategy at Niyo, a digital bank, shared an insight into how the loading balance works in a forex chart.
It says, “This happens (loading money) during bank working days if you go through banking networks. Once the process is complete, the money is loaded onto the card within 24-48 hours.”
There is a slightly different process to follow if you are abroad and want to top up your forex card.
“If the client is abroad, he must leave a signed copy of the A2 form and the authorization with the family, who will have to hand the form to the bank branch. The money can be loaded via Netbanking, the services mobile banking or by depositing a check at the branch.
Can you use an international debit/credit card?
You can swipe your international debit/credit cards at a Point of Sale (POS) with Dynamic Conversion Fee (DCC) or ATM and receive cash in foreign currency.
But you need to keep in mind some costs that would be levied on such usage.
“This transaction occurs in the original currency of the card; INR in the case of Indian travelers, which can help them avoid currency conversion fees,” adds Bhatnagar.
That said, as this DCC mechanism “is implemented by third-party companies, there are exorbitant exchange rates, which fluctuate between 3% and 8%. A borderless prepaid forex card is the best option to avoid such fees or high exchange rates,” he added.
Reason why the Forex card transaction was declined
There can be various reasons why your forex chart may work in some countries and not in others.
Country specific restrictions: According to Bhaskar, some countries have been identified as “high risk countries”. In these countries, a customer cannot make a payment with his card.
Countries that fall into these categories are: Afghanistan, Libya, Syria, Cuba, Iran, Yemen, Bosnia and Herzegovina, North Korea and others.
According to Bhaskar, one will need to check with their respective card-issuing bank for information on the full list of “high-risk countries” where their card will not work, and should make arrangements accordingly.
Currency limits: Bhatnagar says there are bank-specific limits on the maximum amount of foreign currency withdrawals in a single day. Typically, this is $1,500 or cash equivalent through an ATM. For PoS machines or online transactions, limits go up to $15,000 in a single day.
Damaged cards: There is a remedy in place in case your card is so damaged that the machines cannot read it and therefore it will be declined.
Bhaskar says, “The welcome kit contains two cards. “If the primary card is lost, customers can activate the replacement card and transfer funds to that card.”
According to Bhatnagar, if a customer damages or loses their card, they should call the helpline and block it immediately. Depending on the location, a replacement card will be mailed to him, he says.