International travel can be an exciting adventure but it it is also a place away from people you know and you are alone. God forbid if someone falls sick or you lose your money or your documents. Vacationing abroad to international destinations needs a lot of planning and Foreign Exchange. A general dilemma, whenever anyone travels abroad, is how much foreign currency to carry and in what form? The article covers The Foreign Exchange Limits, lists various options available to carry money abroad. Getting a Prepaid travel card is supposed to be safer, better and cheaper option for travellers going abroad. What are prepaid Forex cards?

Overview of Forex options

The various forex options are cash, international Debit and Credit cards and Forex cards. Comparison of the various options are as follows

Note: Limit on carrying Foreign Currency Notes/Coins:  USD 3000 per trip (before Jul 2015 limit was 2000 USD). Rest in Traveller’s cheque, Prepaid cards

Where to buy Forex card?

You can buy currency, forex card at many places. Here, We will be talking about the new IndusForex.com from IndusInd Bank.  With IndusForex, you can buy prepaid Forex Cards and Reload them from time to time, buy and sell foreign currency cash and send money abroad for various purposes. IndusForex strives to provide you with the retail forex solutions at lowest rates to help you save on your every purchase. Book your rates 24×7 with the end to end online processing service. Some important features of Indus Forex are:

• You can buy Forex in various options, Cash , Forex card,
• You can sell Forex
• Reload Forex card
• Send Money Abroad

Advantages of Indus Forex cards are:

• Multiple currencies can be loaded into one card.
• Forex Card at Zero Currency Conversion Charges.
• It’s all online which means minimal paperwork and faster delivery
• Book your order by paying only 5% and pay the remaining amount within 24 hours
• Pick up your Forex Card from 200+ IndusInd branches over India or get it couriered at your preferred location

The Foreign Exchange Limits

The table below shows the RBI prescribed limits up for different category of travelers.  The limit in the table is valid for one financial year, irrespective of the number of visits undertaken during the year. Please RBI Miscellaneous forex facilities for more details.

Limit on carrying Foreign Currency Notes/Coins:  USD 3000 per trip (before Jul 2015 limit was 2000 USD). Rest in Traveller’s cheque, Prepaid cards

For private visits abroad, other than to Nepal and Bhutan, you can buy foreign exchange up to a total amount of USD 2,50,000 per financial year, irrespective of the number of visits undertaken during the year. All tour related expenses including cost of rail/road/water transportation; the cost of Euro Rail; passes/tickets, etc. outside India; and overseas hotel/lodging expenses come under the limit of Liberalised Remittance Scheme (LRS). No foreign exchange is available for a visit to Nepal and/or Bhutan for any purpose.

How much Foreign currency do you need for International Trip?

Plan your foreign currency requirements before your trip abroad. Eating, transportation, and shopping alone account for around 75% of your expenses so plan your expenditure accordingly.  The Reserve Bank of India (RBI) permits an individual to carry $3,000 as cash on hand for travel.  The majority of your purchases and transactions abroad should be cashless in nature. Take 20-30% as cash and rest in other options.

Where to buy Forex? Foreign exchange, or forex, is available from banks, authorised dealers, and moneychangers. The rates are determined by market forces and vary across dealers. These are quoted based on the prevailing inter-bank rates. Bank rates are higher. You may also have to pay fees or commissions.Money exchangers normally charge a premium on the current exchange rate, depending on their profit margin. All you need to do is find what the current market rate is and then identify the lowest premiums. Banks also provide foreign currency exchange but you will not have the room to negotiate the rates.

Limit on Cash:

Travelers are allowed to purchase foreign currency notes/coins only up to US$ 3000 individually. Balance amount can be taken in the form of Traveler’s Cheque, banker’s draft or Prepaid Travel Cards. Exceptions to this rule are the following:

•  travelers proceeding to Iraq and Libya can draw foreign exchange in the form of foreign currency notes and coins not exceeding US$ 5000 or its equivalent
• travelers proceeding to the Islamic Republic of Iran, Russian Federation and other Republics of Commonwealth of Independent States who can draw entire foreign exchange in the form of foreign currency notes or coins.
• For travelers proceeding for Haj/ Umrah pilgrimage, the full amount of BTQ entitlement (USD 250, 000) in cash or up to the cash limit as specified by the Haj Committee of India, may be released by the ADs and FFMCs.

Buying forex involves paperwork. You need to fill up Form A2 stating the purpose of visit and provide

• Original and valid passport
• Valid visa for the country of travel (except where VISA on arrival applies)
• Confirmed ticket showing travel within 60 days of taking foreign exchange
• PAN (Form 60/61 in case PAN missing)

On return from Foreign Trip:

Travellers are required to surrender unspent foreign exchange held in the form of currency notes and travellers cheques within 180 days of return. However, they are free to retain foreign exchange up to USD 2,000, in the form of foreign currency notes or TCs for future use or credit to their Resident Foreign Currency (Domestic).

The residents can hold foreign coins without any limit.

International Credit and Debit Cards

Using credit and debit cards for swiping in foreign currency may prove very costly as they have many charges. Since your card is Indian in origin, your charges are in Indian Rupees.  So when you use your credit card, debit card outside the country you would have to pay, some extra charges, Before using it internationally you may need to activate your card for International Usage and set its limit for the international usage.Call your bank and make it aware of your travel plans; a sudden international activity using your debit card could cause your account to be frozen.

1. Currency Conversion fee – When you do a transaction overseas, say 100 USD, you will be charged a foreign currency conversion fee on this value. The platform provider automatically charges a 4-6% fee on foreign currency exchange and anything in excess of it is generally a margin of profit for your card issuing bank.
2. International Transaction Charge or foreign currency markup fees (FCY). When you pay in foreign currency through your debit/credit card  Irrespective of the currency, transaction amount, or cash withdrawal, your card issuing bank charges a Foreign Transaction charge, which is approximately 3.5% of the total transaction amount.
3. Credit Card Cash Advance Fee or ATM Withdrawal: If you use your credit card overseas, You can be imposed anything from 1%-4% of additional fee every time you carry out an overseas cash withdrawal. You will also be charged the standard cash withdrawal rate for your credit card together with the international cash withdrawal fee.

Prepaid Forex Cards or Travelcards

Prepaid forex card is the safest and cheapest way to carry money abroad. Pre-paid forex cards are another option. You can upload the amount and currency you wish to carry on this card and use it both for cash withdrawals and purchases. Tour operators such as Thomas Cook and many banks, such as SBI, ICICI , HDFC and Axis, offer these cards. It is loaded with funds at the time of purchasing the card. While issuing the card some organizations might charge a nominal fee. Charges vary across banks and currencies as well.

• Prepaid travel cards are safer compared to cash, they come enabled with chip and pin technology. Forex cards are very easy to handle and use. Simply put the card in your wallet and swipe it for transactions abroad.
• Fees associated with forex cards like activation fee, ATM use abroad fee, inactivity charges and redemption fee when balance amount in the card is redeemed.
• Prepaid travel cards have their exchange rate locked in advance and are not dependent on the volatile foreign exchange market.
• When swiping your prepaid travel card abroad for shopping or other transactions, there is no extra charge present. The money being transacted is already the local currency of the country loaded into the card.
• When you are travelling to many countries, Prepaid travel cards allow you to load multiple currencies on them. When you are abroad and transacting with your forex card, it automatically detects which country you are in and pays using the preloaded local currency.
• Forex cards usually have a flat “Foreign ATM Withdrawal” fee associated with them. However, compared to credit card and debit cards, this fee is lesser.
• Not accepted in all places like in hotels abroad as security where only credit card details will work. Even in some developed countries, some businesses may only accept cash and not card For transactions where we need to pre-authorise the use of a card for billing charges to us, forex card can’t be used. For example, in certain hotels, your credit card details are asked for security against your stay in that hotel. If you were to go without paying the bill, the hotel would be able to claim their due using the credit card. This is not possible through forex cards.
• No credit facility which can leave you paralyzed if the funds in your card is over
• Reloading this card is easily possible anytime, anywhere if you run out of money. This can be done over the phone or online or Reload forms that are available, one can just go to the agency/bank outlet with the necessary documents and the money and the prepaid card is loaded again.
•  Charges may be applicable for reloading the card as well as on ATM withdrawals, but swiping the card at merchant outlets may not attract charge
• In the case of theft or loss of your prepaid travel card, you can have the card blocked and also transfer the funds to your new replacement card. This replacement card is usually given as a backup along with your forex card kit.

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