What is a Forex Pre-Paid Card?
A forex card or forex pre-paid card is a type of currency card in which foreign currency is loaded to be spent in a foreign country. This article looks at some important details and features of a forex prepaid card.
Forex prepaid cards are used to make payments when one is travelling overseas. These cards are pre-loaded with currency and enable the user to access his/her money in the required regional currency. Some forex prepaid cards also function as a multi-currency card, meaning that multiple currencies can be loaded onto a single forex prepaid card. It is important to check the forex card rates when getting a prepaid forex card.
Some prepaid forex cards allow the user to load a single card with up to 16 currencies and therefore, allow the user to enjoy a hassle-free journey around the world. In addition, users can use just a single ATM pin to access their accounts online or to withdraw funds. Some of the most commonly used currencies in multi-currency cards include the USD (United States Dollars), GBP (Great Britain Pounds), EUR (Euro), SGD ( Singapore Dollars), CAD (Canadian Dollars), AUD (Australian Dollars), JPY (Japanese Yen), CHF (Swiss Franc), HB Â (Thai Baht), SEK (Swedish Krona), AED (UAE Dirham), HKD (Hongkong Dollars), SAR (Saudi Riyal), NZD (New Zealand Dollars), ZAR Â (South African Rand), and DKK Â (Danish Kroner).
Prepaid forex cards or multi-currency card also allow the user to top up the card as and when required. These cards allow users to withdraw cash in the foreign currency, check their balances, and shop around in multiple locations in multiple countries.
How to avail a Forex Card? Â
To get a prepaid forex card, one needs to submit FormA2 and any other necessary forex documents (as required under the Foreign Exchange Management Act regulations of India), proof of passport, and the number of required funds. Once the funds are cleared, the prepaid forex card will get activated. Users are usually allowed to load prepaid forex cards for a leisure trip with a maximum of $10,000 (Rs 4.5 lakh); $25,000 (Rs 11.25 lakh) is usually allowed to be loaded for business trips. Issuers usually charge between Rs 100 and 300 per prepaid forex card.
Why are prepaid forex cards better than debit or credit cards?
Prepaid forex cards are better than debit and credit cards on international trips owing to the following reasons,
High Transaction fee - Debit and credit cards usually attract a service charge of around three percent for each time that the card is used to make any payment or to purchase any good or service. In addition, debit and credit cards attract an extra fee if they are used to make withdrawals of cash at ATMs. Cash withdrawals through forex cards are cheaper than through debit or credit cards.
Subject to exchange rate fluctuations - Debit and credit cards are billed at the exchange rate that is prevalent on the day that the transaction takes place, and a currency conversion rate is also charged accordingly. Forex cards, on the other hand, are more economical since the forex card rates are locked-in at the time the forex card is loaded with currency.
Forex cards are designed specifically keeping in mind the needs of customers who travel the globe for work or leisure. Using forex cards can help one keep track of their expense through SMS alerts, safely carry currency without the need to risk carrying cash, along with optimal savings owing to the locked currency rates on the cards.
