Come this holiday season, and a good many of you may intend to take a trip overseas to make the most of it. While you`ve mapped out your holiday and budgets down to the last detail, how are you planning to take your cash overseas? Enter prepaid travel cards.
These cards combine the features of a debit card and a traveler`s cheque. These cards come loaded with a certain sum of money (amount left to you) and can then be swiped at stores, restaurants, and so on, besides withdrawing cash at ATMs. The card can be used any number of times until the money loaded on it is exhausted.
The basics
In a prepaid travel card the money is loaded in a foreign currency. The range of currencies in which cards can be got however depends on the bank. For instance, Corporation Bank offers only US dollars on its cards, while SBI adds the Euro and British pound to the offering.
A wider currency range is offered by banks such as Axis Bank and HDFC Bank, where currencies include Dhirams, Australian, Canadian and Singapore Dollars and Swiss Francs.
Akin to debit cards, prepaid travel cards come with a magnetic strip and a signature panel. They carry a PIN for cash withdrawals in the local currency.
The cards are either Visa or MasterCard and can therefore be used in ATMs, which permit usage of these cards. The come with expiry dates and can be renewed and cash reloaded.
Getting a card
Travel cards have both a minimum and maximum limit that can be loaded. The ceiling is fixed by the Foreign Exchange Management Act (FEMA), currently at $10,000 per year for personal travel and USD 25,000 per trip for business travel.
The minimum limit is stipulated by the bank issuing the card. For instance, Axis Bank`s Travel Currency Card requires at least USD 250 for a US-dollar denominated card and - 200 for a Euro-denominated card. Cards can be used only overseas, and not within India, Nepal and Bhutan. Now, getting the card is usually not too much of a hassle. Most banks provide these cards over the counter. Documentation required commonly includes a copy of your PAN, passport, visa and air ticket and Form A2 (a form required by the FEMA). Documents in order, you simply need to fill out the application form at the bank, and you will receive the card.
The card will be activated once the funds have been cleared. A copy of your passport will also be required when you want to collect refunds on the unutilized card balance.
The exchange rate used will be the one prevailing on the day you buy the card, plus a commission. The rupee equivalent of the foreign currency you require will have to be paid to the bank.
These cards combine the features of a debit card and a traveler`s cheque. These cards come loaded with a certain sum of money (amount left to you) and can then be swiped at stores, restaurants, and so on, besides withdrawing cash at ATMs. The card can be used any number of times until the money loaded on it is exhausted.
The basics
In a prepaid travel card the money is loaded in a foreign currency. The range of currencies in which cards can be got however depends on the bank. For instance, Corporation Bank offers only US dollars on its cards, while SBI adds the Euro and British pound to the offering.
A wider currency range is offered by banks such as Axis Bank and HDFC Bank, where currencies include Dhirams, Australian, Canadian and Singapore Dollars and Swiss Francs.
Akin to debit cards, prepaid travel cards come with a magnetic strip and a signature panel. They carry a PIN for cash withdrawals in the local currency.
The cards are either Visa or MasterCard and can therefore be used in ATMs, which permit usage of these cards. The come with expiry dates and can be renewed and cash reloaded.
Getting a card
Travel cards have both a minimum and maximum limit that can be loaded. The ceiling is fixed by the Foreign Exchange Management Act (FEMA), currently at $10,000 per year for personal travel and USD 25,000 per trip for business travel.
The minimum limit is stipulated by the bank issuing the card. For instance, Axis Bank`s Travel Currency Card requires at least USD 250 for a US-dollar denominated card and - 200 for a Euro-denominated card. Cards can be used only overseas, and not within India, Nepal and Bhutan. Now, getting the card is usually not too much of a hassle. Most banks provide these cards over the counter. Documentation required commonly includes a copy of your PAN, passport, visa and air ticket and Form A2 (a form required by the FEMA). Documents in order, you simply need to fill out the application form at the bank, and you will receive the card.
The card will be activated once the funds have been cleared. A copy of your passport will also be required when you want to collect refunds on the unutilized card balance.
The exchange rate used will be the one prevailing on the day you buy the card, plus a commission. The rupee equivalent of the foreign currency you require will have to be paid to the bank.
Note that you need not necessarily have to hold an account with the bank. Any amount remaining on your card will be returned by the bank. For currencies outside the range provided by the bank, you can still use the card, but the exchange rate will be applied on the day you use the card.
Should the card value dwindle down to nothing when you`re still on your trip, it can be reloaded. This is rather a bother, though, since it cannot be done online.
Your authorized representative has to go to the bank in India and pay the amount needed. Reloads are also subject to FEMA limits.
Fees and charges
Banks charge a flat fee, irrespective of card value. For instance, HDFC Bank charges Rs 125 for the issue of a card in any currency, while Corporation Bank charges as much as Rs 170. Issue charges may also vary depending on the currency. Axis Bank, for example, charges Rs 150 for cards denominated in US, Australian and Canadian dollars, Euros and Pounds, but hikes this up to Rs 250 for cards in Singapore Dollars, Swiss Francs and Swedish Krona.
Usage of the card at various outlets or establishments does not carry a charge. You may swipe any amount, subject to the limits of the card value. However you would be charged while withdrawing cash or determining card balance at ATMs, depending on currency used as well as the issuing bank. Limits also apply on the amount of cash you can withdraw. Minimum limits vary, and are normally set by banks. Upper limits are generally based on the laws of the country you are in. Reloading cards too carry fees, while refund of the balance carries a flat charge irrespective of amount.
An easier bet…But were you to use an international credit card instead, the exchange rates are determined on the day of usage. Swiping international debit cards at merchant outlets also carries charges. Besides, while fees on cross-currency transactions happens only once with a travel card (when you buy it), with debit or credit cards, it applies every time you use it.
Your authorized representative has to go to the bank in India and pay the amount needed. Reloads are also subject to FEMA limits.
Fees and charges
Banks charge a flat fee, irrespective of card value. For instance, HDFC Bank charges Rs 125 for the issue of a card in any currency, while Corporation Bank charges as much as Rs 170. Issue charges may also vary depending on the currency. Axis Bank, for example, charges Rs 150 for cards denominated in US, Australian and Canadian dollars, Euros and Pounds, but hikes this up to Rs 250 for cards in Singapore Dollars, Swiss Francs and Swedish Krona.
Usage of the card at various outlets or establishments does not carry a charge. You may swipe any amount, subject to the limits of the card value. However you would be charged while withdrawing cash or determining card balance at ATMs, depending on currency used as well as the issuing bank. Limits also apply on the amount of cash you can withdraw. Minimum limits vary, and are normally set by banks. Upper limits are generally based on the laws of the country you are in. Reloading cards too carry fees, while refund of the balance carries a flat charge irrespective of amount.
An easier bet…But were you to use an international credit card instead, the exchange rates are determined on the day of usage. Swiping international debit cards at merchant outlets also carries charges. Besides, while fees on cross-currency transactions happens only once with a travel card (when you buy it), with debit or credit cards, it applies every time you use it.
Travel cards also score over hard cash or a sheaf of traveler`s cheques. The latter is not acceptable at all outlets and cashing them can be done only during working hours.
Reporting stolen cheques are also troublesome. On the contrary, 24-hour helplines are available for travel cards, allowing you to hotlist them immediately.
…but with some drawbacks
But they have some disadvantages. One, in an appreciating rupee exchange rate scenario, you stand to lock in at a more expensive exchange rate. Besides, for currencies outside those offered by the bank, rates apply on the day you use them, with a commission.
But they have some disadvantages. One, in an appreciating rupee exchange rate scenario, you stand to lock in at a more expensive exchange rate. Besides, for currencies outside those offered by the bank, rates apply on the day you use them, with a commission.
Two, if you are country hopping, you have to carry as many cards as countries since more than one currency cannot be loaded on a single card. Nor can you hold more than one card in the same currency.
Three, it is advised against using the card for temporary payments, such as hotel deposits or car rentals as the amounts are blocked for a few days.
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