Traveling abroad comes with the excitement of exploring new destinations but also the hassle of managing foreign currency. A Travel Currency Card is a modern solution that simplifies this process, offering a secure and convenient way to manage your expenses while abroad. In this article, we'll explore what a travel currency card is, how to buy one, its advantages, taxation rules, and other important points.
What is a Travel Currency Card?
A Travel Currency Card, also known as a Forex Card, is a prepaid card that allows you to load foreign currencies for seamless transactions while traveling internationally. It is accepted widely at merchants, ATMs, and online platforms abroad.
Key Features:
Multi-Currency Support:
You can load multiple foreign currencies on one card, making it ideal for multi-country travel.
Ease of Use:
It works like a debit or credit card, allowing you to swipe for purchases or withdraw cash.
Prepaid Card:
You load money in the currency of your choice at fixed exchange rates before traveling.
How to Buy a Travel Currency Card?
Getting a Travel Currency Card is simple and straightforward. Here's how:
Choose the Issuer:
Banks, financial institutions, and forex companies in India offer travel cards. Compare features, fees, and exchange rates before selecting.
Submit Documents:
Required documents typically include:
- Valid passport and visa.
- Confirmed travel tickets.
- PAN card and address proof.
Load Currency:
Decide the amount and currency you wish to load. The exchange rate at the time of loading will apply.
Get the Card Activated:
Once your card is issued, it will be activated within a few hours or as per the issuer's process.
Recharge and Reload:
If you run out of funds while traveling, you can reload the card online or through the issuer's app.
Advantages of a Travel Currency Card
Secure Transactions:
Travel currency cards use PIN-based security and can be blocked immediately if lost or stolen.
Fixed Exchange Rates:
Exchange rates are locked in at the time of loading, protecting you from currency fluctuations.
Cost-Effective:
Lower transaction fees compared to international credit/debit card charges.
Convenience:
Accepted at ATMs and POS machines globally.
Allows online transactions in foreign currency.
Multi-Currency Option:
Ideal for travelers visiting multiple countries, eliminating the need for carrying multiple currencies.
Easy Budgeting:
Being a prepaid card, it helps you stick to a predefined travel budget.
Taxation on Travel Currency Cards
Goods and Services Tax (GST):
A nominal GST is applied when you load or reload your travel currency card.
Tax Collected at Source (TCS):
As of October 1st 2023, the TCS rates on overseas tour program packages under the Liberalized Remittance Scheme (LRS) amount to 5% TCS on foreign currency transactions below Rs7 lakh in a financial year. A 20% TCS on foreign currency transactions above Rs7 lakh is charged in a financial year
Refund Claim:
If the TCS is deducted, you can claim it as a refund while filing your income tax return if applicable.
Additional Points to Consider
Card Validity:
Travel currency cards remain valid for a few years, allowing you to reuse them for future trips.
Unutilized Balance:
After your trip, you can withdraw the remaining funds in INR or transfer them back to your bank account.
Customer Support:
Issuers provide 24/7 customer support for assistance with lost cards, blocking, or other issues.
Supplementary Cards:
Some issuers offer supplementary cards for family members, linked to the same account.
Why Choose a Travel Currency Card?
Travel Currency Cards offer unparalleled convenience, security, and cost efficiency, making them an indispensable companion for international travel. They eliminate the need for carrying large amounts of cash and provide better control over your expenses.
Start your journey worry-free by choosing a Travel Currency Card tailored to your needs. Simplify your international transactions and enjoy the peace of mind that comes with safe and efficient travel solutions!