Summer vacations are synonymous with traveling and merriment. In case you are planning to travel overseas this summer, you might want to know how you can carry your money. Read on:
Multicurrency Travel Cards
Prepaid travel cards are quite popular with travelers. They offer protection against currency fluctuations, cross currency transaction charges, and minimum transaction charges while giving you the option to lock-in the exchange rate before travel. They can be used to withdraw cash and for purchase transactions at merchant outlets across the globe.
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A lot of stuff, like local street cuisine, taxis, tips, etc. can only be availed with cash. It is not always that cards or cheques are accepted. That is why experts advise a card-to-cash ratio of 75:25.
Pre-Paid Debit Cards
A guest is entitled to carry foreign exchange equivalent of USD 250,000 in a financial year. However, the RBI has stipulated that a traveler cannot avail in excess of USD 3,000 or its equivalent during a single visit in currency notes. The remaining has to be through prepaid forex cards. Therefore, carrying the remaining in prepaid debit cards is a convenient option. There are single, as well as multi-currency cards that are available for the guest to use when traveling to multiple countries on the same visit.
While plastic money is preferred the most for overseas travel, travelers’ checks are useful for places where there are few ATMs and cards are not accepted. “Travelers’ checks, however, can have their pros and cons as it is subject to currency fluctuation. If the currency changes during the travel period and the exchange rates become more favorable, it will benefit the consumer once (s)he arrives in the country. Travelers’ checks can also restrict a traveler from spending over and above his budget unlike a travel card which gives a traveler more flexibility,” says Neelu Singh, CEO & Director, Ezeego1.
A lot of Debit/Credit cards can be used anywhere in the world. The transaction or cash withdrawal, however, is subject to currency conversion fees. Pro tip: Do inform your bank about your trip, so that large transactions do not result in the bank freezing your account for security reasons!
Point being, you should never rely on a single mode of payment while traveling abroad. Always have a balanced travel money portfolio that includes traveler’s cheques, debit cards, cash and credit cards, among others.