20% TCS from October 1: No TCS on credit card but forex card could save more during international trips; know how
TCS on forex cards is at 5% if you add more than Rs 7 lakh on the card. There is no TCS on international credit cards. Does it mean that credit cards will be a better option than forex cards while travelling abroad? Probably not always.
Read carefully to know more.
To find out if credit card or forex card is better for international travel, we need to understand the basic differences between these two and their charges.
Forex card vs credit card: What are the differences?
When you buy a forex card, the foreign exchange conversion rate is locked as soon as you load money into it. In the case of a credit card, the applicable foreign exchange rate is paid at the time of a transaction. «In a forex card, the exchange rates are locked in instantly when you load money.
It may provide a sense of financial security against rate fluctuation,» says Nishant Pitti, CEO and Co-Founder, EaseMyTrip. «On the other hand, credit cards may offer better exchange rates and accumulate reward points for future use, but can trigger international transaction fees.» This can push up the overall cost of forex transactions.
Zero markup fee on forex cards could save more while travelling
Forex cards have recently become popular among travellers, all thanks to a zero-markup fee. While you use your credit card or forex card abroad, you are usually charged a price over and above the actual transaction value, known as the markup fee.
