While carrying a small amount of cash is recommended for a Europe tour, it is best to opt for cards for payment purposes in Europe, especially as you will be travelling across different countries.
Two important cards that are used for making payments in Europe include an International Debit Card and a Forex Card.
This article sheds light on useful concepts like the utility of these cards for payment purposes in Europe. Additionally, we will also discuss international debit cards vs forex cards.
What Does it Mean to Own an International Debit Card?
An international debit card is designed to help you make payments when in another country for meals, accommodation and even online shopping. It is provided by your bank at your request, and it allows you with the option to carry very little cash in hand while touring Europe and other parts of the world.
Features of International Debit Card
Rewards - It offers reward points for every transaction made through this card that can be used to avail yourself of discounts or purchase gift vouchers.
Easy Payment - You can easily make online payments through this card, and to pay offline in Europe you simply have to enter the 4-digit PIN of your card.
ATM Withdrawal - This card can be used for withdrawing local cash as and when required.
Pros:
Since it is connected to your bank account, you can monitor your account and track how much you spend during your Europe trip.
It gives you the facility of using ATMs in Europe for withdrawing local currency, in case you are unable to make payment through this card.
It is generally accepted in all parts of the world, including countries in Europe.
Cons:
How much you pay through the card depends on the fluctuation of the exchange rate, which can lead to financial loss when shopping in Europe.
Although banks provide strong security measures, the chances of your bank account being leaked get high if this card is stolen.
In Europe, you may have to pay additional charges for converting currency or using this card.
What Does it Mean to Own a Forex Card?
It serves as a prepaid card for travelling to different countries, which carries currencies that you have selected for your travel purposes. Its usage is similar to a credit card or an international debit card, which can be used for withdrawing money from ATMs.
Features of Forex Card
Safety Aspect - Security features are the same as that of a credit card, making this card safe for payments.
Money Control - Since a specific amount is pre-loaded, it keeps your spending spree under control.
Fixed Currency Rate - The exchange rate on the day you add money to the card is fixed as long as you use the card.
Pros:
It comes with a lock-in exchange rate that enables you to manage your finances better during your Europe trip.
It can be used in multiple countries to make payments.
It is a safe payment method, as this card is in no way linked to the bank account you own.
Cons:
International Debit Card vs Forex Card - How Do They Differ from Each Other?
When you are looking for the best card for Europe travel, it is crucial that you know how each of these cards differs from the other. These are the differences between Forex Card and International Debit Card:
Aspects |
Forex Card |
International Debit Card |
Convenience in Issuance | Issued and activated within 4-5 business hours of issuance. | Takes 7-10 days to receive the card physically. |
Overseas Use | Minimal exchange rate. | Charges for currency conversion and additional charges for using the card in European countries. |
Rate Volatility | Currency conversion rate is locked in. | Fluctuations in the INR exchange rate make it volatile. |
Loss or Theft of Card | It usually comes with an add-on or backup card that can be used until a new Forex card is issued (generally issued within three business days of making a formal request). | Report and make a written request after arriving in India. The decision rests on the bank to issue a replacement card. |
Withdrawal Limit | The withdrawal fee is flat and limited. | The withdrawal fee can reach up to 3.5% of the total amount. |
Forex Card vs International Debit Card - Difference in Charges and Fees
While there are differences in charges and fees applicable to Forex and International Debit cards, opting for
Europe credit cards will come with charges similar to that of the debit card.
Charges and Fees |
Forex Card |
International Debit Card |
Issuance Fee | 0 | ₹500-1000 |
Markup Fee | 0 | 1-3% |
Annual Fee | 0 | ₹750-1000 |
Re-issuance Fee (if damaged, stolen or lost) | ₹250 | ₹100-200 |
Initial Funding for Issuing Card | 0 | ₹5000 |
Interest Rate | Nil, it is a prepaid card. | 24%-26% on unpaid balances |
Fee for Cash Withdrawal at an International ATM | EUR 1.5 | 2.5%-3.5% of the total amount withdrawn. |
Fee for Balance Enquiry at an International ATM | EUR 1.5 | ₹100 |
Credit Card for Europe Travel -Guidelines for Use
Here are some important points to note before using your credit card in Europe for payments:
Make your card secure - While selecting the best credit card for Europe, make sure that your credit card comes with the “Chip and Pin” Software.
This type of card is less vulnerable to fraud. Additionally, using in-app controls, you can safeguard your card from unauthorised access./p>
- Check if reward options are available - Many credit cards feature benefits like reward points and discounts on flights and accommodation.
Opt for a credit card that provides some form of reward for making transactions overseas. Popular credit cards to use in Europe include MasterCard and Visa.
Think Beyond Cards: Choose Travel Insurance with Extensive Cover for Your Europe Trip
Although it is a great idea to pay for all transactions in Europe through cards, the most effective way to protect your finances is by being covered with travel insurance throughout your Europe tour.
At Reliance General Insurance, we offer extensive coverage through our
Europe travel insurance policy. The benefits that you enjoy through this policy can help you evade unnecessary financial losses and receive medical aid if required without being concerned about finances. Learn more about this insurance coverage on our website so that you can be well-prepared for a vacation in Europe.
Conclusion
Travelling abroad comes with pre-set expenditures including restaurant and local cafe visits, purchasing souvenirs and visiting tourist attractions. Carrying sufficient money is the key to enjoying your holiday without fretting about expenses. No matter what card you choose to travel with, only an insurance policy can support you financially at times of unexpected events.
Frequently Asked Questions
Does an international debit card feature daily withdrawal and spending limits?
Yes, all international debit cards feature daily withdrawal and spending limits, exceeding which you cannot use it any further during that day to make transactions.
What does a contactless Forex Card mean?
This type of Forex Card allows you to make payments at stores by tapping or waving the card at the terminal for payment.