Travelling abroad often means searching for zero forex markup credit cards. Let’s dive into what this fee is, how it works, and how you can minimise or avoid it.
Zero Forex Markup and more in India
Credit card issuers impose foreign currency markup fees when you make a purchase in a currency other than Indian Rupees (INR). These fees typically range from 2% to 3.5% of the total transaction amount and cover the cost of converting the foreign currency into INR. Here’s a detailed breakdown of how these fees work. Note their implications when purchasing for friends or family on international websites.
How Foreign Currency Markup Works?
1. Transaction Process:
– When you purchase on an international website, they usually process the transaction in their local currency.
– Your credit card issuer then converts this amount into INR.
– They add a markup fee to cover the cost of currency conversion and other related expenses.
2. Fee Breakdown:
– Issuer Fee: Most Indian credit card issuers charge a fee for foreign transactions, typically around 2% to 3.5% of the purchase amount.
– Network Fee: Credit card networks (like Visa, MasterCard, or RuPay) may also charge a fee for international transactions, usually around 1%.
Implications for Making Purchases for Friends or Family
Increased Costs:
– If you’re buying something for friends or family on an international website, the foreign currency markup will increase the total cost of the purchase. For instance, if you buy an item worth $200 (USD) with a 3% markup fee. The exchange rate is 1 USD = ₹83, the cost calculation would look like this:
– Transaction Amount: $200 x ₹83 = ₹16,600
– Markup Fee (3%): ₹16,600 x 3% = ₹498
– GST on Markup Fee (18%): ₹498 x 18% = ₹89.64
– Total Cost: ₹16,600 + ₹498 + ₹89.64 = ₹17,187.64
Inform your friends or family about the potential extra charges if they are reimbursing you.
By understanding foreign currency markup and selecting the right credit card, you can manage and potentially reduce the extra costs associated with international purchases, making it more economical to buy gifts or items for friends and family abroad.
Reducing or Finding Zero Forex Markup Credit Cards
Choose the right credit card:
Some issuers design credit cards specifically for travelers, offering low or zero foreign transaction fees. Here are a few:
| Credit Card | Features & Benefits | Fees & Charges* | Additional Benefits |
| IDFC First Bank WOW Credit Card | No forex conversion fee, Reward points on spends | No joining, membership, or annual fees, Cash advance fee: ₹199 per transaction | Personal accident cover ₹2,00,000, Various merchant offers |
| Federal Bank Scapia Co-branded Credit Card | Zero forex markup, Instant card issuance, Unlimited domestic lounge access | No joining and annual fees | Earn Scapia coins on expenditures, Instant redemption for travel bookings |
| RBL World Safari Credit Card | 0% forex markup, Welcome voucher from MakeMyTrip, Lounge access benefits | Annual Fee: ₹3,000 | Travel insurance, Fuel surcharge waiver |
| ixigo AU Credit Card | Zero forex markup, Discounts on flight, hotel, and bus bookings | No specific fees mentioned | Complimentary international lounge access, Reward points on bookings |
| Axis Bank Burgundy Private Credit Card | No forex markup, 30,000 welcome reward points, No cash withdrawal charges | Annual Fee: None specified | Complimentary hotel and dining memberships, Concierge services |
| BookMyForex Forex Credit Card | No forex markups, Load up to 14 currencies, Fixed exchange rates | Minimal ATM fees | Accepted at millions of stores and ATMs, Reload remotely |
| HDFC Bank Diners Privilege | Zero foreign exchange markup fee, Rewards on dining and entertainment | Joining Fee: ₹2,500, Annual Fee: ₹0 | Complimentary memberships, lounge access |
| ICICI Bank Rubyx | Zero forex markup, Reward points on spends | Joining Fee: ₹3,000, Annual Fee: ₹2,000 | Lounge access, dining and entertainment benefits |
| HDFC Bank Regalia Credit Card | 2% foreign exchange markup fee, Reward points on spends | Joining Fee: ₹2,500, Annual Fee: ₹2,500 | Lounge access, concierge services, travel benefits |
*Please note that fees & charges of credit cards can change from time to time as per the changes made by the issuer.
Use Multi-Currency Forex Cards:
You can load these prepaid cards with multiple currencies, and they offer zero or low forex markups. Cards like BookMyForex Multi-Currency Forex Card allow you to exchange currency at interbank rates without additional fees.
Limit ATM Withdrawals:
Avoid frequent cash withdrawals abroad. These may incur additional fees besides the forex markup. If necessary, withdraw larger amounts less frequently to minimize costs.
Check Terms and Conditions:
Familiarize yourself with your card’s terms and conditions regarding foreign transactions. Some cards may have specific benefits or hidden fees that could impact your travel budget.
Zero Forex Markup:
Some banks state zero forex markup credit cards like the IDFC Bank First Wow Credit Card.
Additional Costs with Using a Credit Card for Overseas Expenses
| Expense Type | Description |
| Taxation (GST) | Imposed on all bank fees |
| Cash Withdrawal Fee | Charged for ATM withdrawals abroad |
| Finance Charges | Interest for late payments or cash withdrawals, typically 30%-45% p.a. |
| Currency Conversion Fee | 3%-5% of transaction value, applied on settlement date |
– Evaluate foreign transaction fees to avoid unexpected charges.
– Compare rewards programs and select cards with minimal fees.
– Understand the terms and conditions of zero forex markup fee cards.
– Additionally, make sure to check for foreign currency conversion fees in addition to markup fees.
By choosing the right financial tools and being aware of potential fees, you can enjoy your international travels with Zero Forex Markup Credit Cards. Find the best credit card 2024 only with us.
