Last updated:Nov 12, 2024 4:55 PM IST
When you load money onto a forex card, you lock in the exchange rate at that time. This means that if the rupee continues to fall, you are protected from further depreciation.
Forex cards are beneficial for international travelers, students, business travelers and even those who make online purchases from foreign retailers.
With the rupee experiencing historic lows against the dollarsInternational travelers and students studying abroad face higher costs. For anyone planning to travel or make purchases abroad, it is crucial to understand how to manage their foreign currency spending efficiently. One of the best tools to manage these expenses amid a falling rupee is a forex chart.
The rupee fell 1 paisa to a new lifetime low of 84.39 against the US dollar on Tuesday as continued foreign fund outflows and a strengthening dollar against major overseas trades dented investor sentiment.
According to reports, the Indian rupee is likely to fall further as the US dollar is expected to rise under Donald Trump’s second term. This is why forex cards offer an edge over other payment methods in times of currency volatility.
1. Fixed exchange rate
When you load money onto a forex card, you lock in the exchange rate at that time. This means that if the rupee continues to fall, you are protected from further depreciation. For example, if you recharge your card when the dollar is at Rs 84.39, your spend abroad will remain fixed at that rate – even if the rupee falls to Rs 85 or lower against the dollar. This ability to lock in rates helps travelers avoid fluctuating exchange rates, adding a level of financial security and predictability.
2. Lower transaction costs
Using your Indian credit or debit card abroad often results in high transaction fees due to additional currency conversion fees. However, Forex cards are designed for international use, meaning there are no additional fees involved. Although some banks charge nominal fees for cash withdrawals abroad, forex cards are generally cheaper than using credit or debit cards.
This is especially useful for frequent travelers or international students who regularly need foreign currency, allowing them to save significantly on conversion costs over time.
3. Wide acceptance and convenience
Forex cards are accepted by millions of merchants worldwide, making them an ideal choice for shopping, dining and other transactions abroad. Moreover, major forex card providers such as Visa and Mastercard ensure that these cards are accepted in most countries and branches, making them easy and hassle-free to use.
Furthermore, forex cards can be used for both online and offline transactions, which is perfect for travelers who may also need to book accommodations or buy tickets for local attractions.
4. Enhanced security
Traveling with large amounts of cash comes with obvious risks, but a forex card allows you to carry cash safely. Most forex cards come with a PIN and require authentication for transactions. In the event of theft or loss, the card can be blocked and the funds transferred to a replacement card, keeping your money safe.
Some cards also offer the option to be linked to mobile banking, where you can track transactions, check balances and even top up money online, giving you control over your spending.
5. Budget management
Forex cards are pre-loaded, meaning you start with a fixed amount of money so you can budget your expenses. This helps in controlling overspending and tracking your expenses while traveling. By setting a predetermined budget on your card, you are more likely to stay within your budget and avoid surprises when you get home.
In case of emergency, most banks allow quick reloading of forex cards, giving you the flexibility to add funds online if necessary.
6. Multi-currency options
Many forex cards come with the option to hold multiple currencies. For example, a single card can hold balances in USD, EUR, GBP and several other currencies, allowing seamless travel across countries without having to worry about exchange rates for each new country. This is especially useful for business or leisure travelers with multiple destinations.
Is a Forex Chart Right for You?
Forex cards are beneficial for international travelers, students, business travelers and even those who make online purchases from foreign retailers. With the rupee facing an unpredictable exchange rate environment, the stability that forex cards provide can be a financial lifesaver.
However, there are a few things to keep in mind:
Recharge Timing: If you expect further depreciation, you may want to load the card sooner rather than later to lock in a more favorable rate.
Reload costs: Check if your provider charges top-up fees, as these may increase your costs.
Cash withdrawal limits: Some cards have limits for international cash withdrawals, so check these details if you plan to regularly withdraw cash abroad.
In times of currency devaluation, a forex card can be a powerful tool to manage foreign expenses without the burden of fluctuating rates. By locking in exchange rates, avoiding high transaction fees and offering enhanced security, forex cards are a smart choice for anyone in need of foreign currency. With its budget benefits and multi-currency options, a forex card is a practical, cost-effective solution for managing travel expenses.
So if you are planning a trip abroad or are a student preparing to study abroad, opting for a forex card can be useful to save costs and avoid exchange rate shocks.