Avoid using credit card abroad

If you go abroad often, you may probably be using your credit card for making payments for items purchased or services availed by you or to withdraw cash. But have you kept a tab on the costs of using credit card overseas? Well, if you have not till now, then you should henceforth. The reason is that the usage of credit card abroad attracts various kinds of charges which can inflate your credit card bill quite a lot. Some of these charges include foreign currency conversion fee, transaction charge, cash withdrawal fee, etc. plus the mark-up charges as applicable.

The foreign currency conversion fee is nothing but the conversion fee from Indian currency to the currency of the country in which the card is used. This charge is usually 1-2% of the amount to be converted. In addition to this, the lender may also levy a foreign transaction charge ranging from 1.5% to 3.5% of the amount of transaction.

If you withdraw cash abroad with your credit card, the bank imposes a fee ranging from 2-4% of the amount withdrawn. This is apart from the standard charge that withdrawals through credit cards attract.

In order to avoid paying all these charges, you can get a prepaid forex card that has the desired amount of foreign exchange pre-loaded in it. This card can also be reloaded or topped up any time. Or you can go for a card that does not charge any foreign transaction fee or charges minimum transaction fee.