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De-jargoned: Prepaid travel cards
These are pre-loaded cards and allow you to access money in the regional currency. You can also top up depending on your requirement
When it comes to foreign travel, there are a few methods of carrying currency. These include cash, debit and ATM cards, credit cards, traveller’s cheques, and prepaid travel cards. The last in the list has made it that much easier to avoid carrying cash.
WHAT ARE PREPAID TRAVEL CARDS?
These are pre-loaded cards and allow you to access money in the regional currency. You can also top up depending on your requirement. The card allows you to withdraw cash in foreign currency, check your balance and shop. The card can be loaded with one or multiple currencies. For example, ICICI Bank Ltd’s single currency Visa travel card comes with a choice of nine currencies, including US dollar, British pound, euro and Singapore dollar. Its Multicurrency Platinum Travel Card loads 15 currencies. Companies such as Thomas Cook India Ltd, American Express and UAE Exchange and Financial Services Ltd also have such cards.
To apply, you need to submit Form A2 (this form has to be filled when remitting money abroad) and other documents such as your passport (original and photocopy), copy of your permanent account number (PAN) or Form 60 (if you don’t have PAN), visa and tickets. Once the funds get cleared or are paid to the bank, the card gets activated.
These cards are available off-the-counter (depending on the availability of funds) nowadays, and it takes about 24 hours for them to get activated. You can load the card up to $10,000 or equivalent in other currencies in a financial year. This according to the rules set by the Reserve Bank of India and the Foreign Exchange Management Act, 1999 (Fema). For business purpose, you can load up to $25,000 per trip.
These cards are useful for those who travel to a particular region often, and might be a more convenient alternative to debit and credit cards. These are comparatively cost-effective, since the exchange rates get locked in on the day of transaction. You can avoid currency conversions, as the cards are available in major currencies. Apart from that, withdrawing cash at ATMs abroad attracts a flat fee. For instance, for withdrawals, HDFC Bank Ltd’s Multicurrency Platinum ForexPlus Chip card charges $2 (at 67 to a dollar), €1.5 (at 74), £1 (at 97). For balance enquiries at ATMs, it is $0.5, €0.5, and £0.5.
Debit and credit cards involve a cross-currency mark-up of 2-3.5% for international withdrawal and purchase transactions. Further, withdrawals at ATMs would attract an extra flat fee of 125 per transaction and 25 for balance enquiries. However, issuance and annual fees of prepaid travel cards are on the higher side, and will vary across banks. For example, for HDFC Bank’s Multicurrency, issuance fee is 500 and 75 to reload. For its debit cards (depending on the type of card), the annual charge is 150-750, and for credit cards it is 299-10,000.
THINGS TO KEEP IN MIND
You cannot top-up the card abroad, even if your bank has a branch there. You need to contact the centre that issued the card. If you lose the card, block it and ask for a fresh card, which will take 5-7 working days to be re-issued. The new card will reach your registered address in India. However, some banks give the option of availing a back-up card at the time of buying itself. These can be activated immediately. You can encash any unused amount on return to India.
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First Published:27 Jan 2016, 07:31 PM IST
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