Which Indian Financial Institutions Waive Foreign Exchange Charges?
In the world of international transactions, a lesser-known yet significant cost is the forex markup fee. This fee is an additional charge applied by Indian banks on top of the prevailing inter-bank foreign exchange rate during foreign currency transactions. The range of this markup fee can vary from 0% to approximately 3.5%, plus applicable GST, depending on the card issuer and card type.
For instance, many Indian banks charge up to 3% plus GST on forex transactions done via credit or debit cards[1][3]. This additional cost can significantly increase the overall cost of international purchases or cash withdrawals, decreasing the effective value of the cardholder’s money abroad.
Premium credit cards often offer lower forex markup fees, sometimes below 1%, while mid-range and basic cards generally have higher fees, sometimes as high as 3.5%[1][3]. Some fintech-linked cards and certain forex cards claim zero forex markup but may have other limitations like no rewards on foreign spending[1][3].
One such forex card with zero markup fees is the INDIE VISA Signature debit card, available upon opening a Megastar Savings Account on INDIE[2]. This card allows transactions at the exact exchange rate without hidden charges.
Another example is the HDFC Bank Multicurrency ForexPlus card, which does not levy any markup fee on transactions in the loaded currency but includes a 2% cross-currency charge[3]. This card also requires a card issuance fee of Rs 500 plus GST.
The State Bank Multicurrency foreign travel card, on the other hand, supports seven different currencies and allows loading multiple currencies at once[4]. However, it charges a 3% cross-currency usage fee for transactions in other currencies.
It is essential to compare forex markup fees across card issuers before traveling abroad, negotiate with your bank for better rates if possible, or use forex cards with lower or zero markup fees to minimize the impact[1][3].
[1] BankBazaar.com. (n.d.). Forex Card vs Credit Card for International Travel. Retrieved from https://bankbazaar.com/forex-card-vs-credit-card-for-international-travel,44,FOREX-CARD-VS-CREDIT-CARD-FOR-INTERNATIONAL-TRAVEL.html
[2] INDIE. (n.d.). INDIE VISA Signature Debit Card. Retrieved from https://www.indie.co.in/visa-signature-debit-card
[3] HDFC Bank. (n.d.). Multicurrency ForexPlus Card. Retrieved from https://www.hdfcbank.com/personal/credit-cards/forex-cards/multicurrency-forexplus-card
[4] State Bank of India. (n.d.). State Bank Multicurrency Foreign Travel Card. Retrieved from https://www.sbi.co.in/personal/credit-cards/foreign-travel-card
- Investing in a forex card with lower or zero forex markup fees, such as the INDIE VISA Signature debit card or some fintech-linked cards, can help travelers minimize the additional costs during international transactions.
- Choosing a premium credit card over mid-range or basic cards can lead to lower forex markup fees, impacting the lifestyle of frequent travelers by increasing the effective value of their money abroad without hidden charges.
