Photograph courtesy: Youtube/YRF
It is said that traveling is not about money but about the experience, journey and everlasting memories. At the same time, you need the moolah to enjoy all of it. And if travel involves going abroad you need to manage your expenses in foreign currency. Whether you are a seasoned traveler or a first timer, heres how you can be a smart traveler abroad by managing your forex needs. K Mohan Bhakta, Executive Director, Weizmann Forex Limited shares his valuable inputs to ensure you have a safe trip abroad concerning your money matters. Here’s what he has to say about managing forex in a country abroad. Also Read - Unlock Phase I in Rajasthan: Hotels, Restaurant, Clubs And Shopping Malls to Reopen From Monday | Details Here
Go low on cash
It is a good practice to make a note of your travel budgets well in advance so that you can buy forex at least three to four days before you travel. This will save you from the last-minute hurry and give you a better margin just in case the rates fluctuate. Once you know what your budget is, split your expenses and carry only a certain amount that is necessary in cash and load the rest of the currency in a travel card. You can opt to carry 20 to 30 per cent of the amount in cash that can be used for paying taxi fares, street shopping, tips and so on. While you can load the remaining 70 to 80 percent in your Forex travel card. Cash is the riskiest way to carry money while travelling abroad and loss of Forex at an international destination can cripple your spending and travel plans. Therefore, a forex travel card should also be explored as an option as it gets you better rates than cash and it is safer too. In other words, When in Rome do as the Romans do and convert your currency to local money before you make any transactions. You really do not want to pay a higher currency conversion rate. ALSO SEE 5 tips to keep your cash safe while traveling Also Read - Haryana News: Shopping Malls Except in Faridabad, Gurugram Can Reopen; Restaurants at 50% Capacity
Buy from authorised banks or money changers
Under Foreign Exchange Management Act (FEMA), only the Banks and licenced Money Changers can sell forex. However, certain intermediaries like Travel Agents also, at times, arrange for forex. Therefore, traveller should know the pros and cons of buying from various entities. Also Read - We Have Named Her 'Priyanka Twitter Vadra': UP Deputy CM's Jibe at Congress Leader
Buying from Banks involves locating which branch of your bank sells forex. All branches are not authorised to sell forex, especially the currency notes. Further, if you compare the rates charged by Banks with rates of Money Changers you would realise that you are better off buying from Money Changers. Again, you need to visit the bank branch during specified timing to buy forex.
On the other hand, buying forex from Money Changers like Thomas Cook, Weizmann, Centrum etc.,has its own benefits. Their business hours are longer than banks and their rates are much finer than banks. The rates are normally available on their websites. Compare before you buy.
The third source of forex is intermediaries like Travel Agents, most of who are not licensed to sell forex but sell it on behalf of Money Changers. Obviously, their rates are too steep as they retain a fat margin.
The latest source of buying forex is the Online Forex Portals like BookMyForex, DoorstepForex etc., which are basically online aggregators and depend on the licensed Money Changers for actual delivery.
Given the above pros and cons, it is safe to buy from banks or Money Changers who insist on adequate KYC documents and issue properly printed invoices. It is very important to retain and carry the invoice with you, especially if you propose to carry large amount of foreign currency.
Opt for travel cards
Travel cards are sold by most of the financial institutions that are into the money changing business and it is possible to pre-load these cards with foreign currencies.Upon completing the KYC procedure, you may be charged a nominal amount of Rs 100-200 for issuing the card, while most provide the card free of cost. After the KYC procedure is completed you need to remit an amount (equivalent to the sum you want in foreign currency) to the card provider.
With the help of these cards you can manage spends overseas and you also have the benefit of locking the rate for the fund that was loaded in the card and spend across point-of-sales terminals. The card is pegged to the dollar and there is no conversion charge for using it in any currency, other than at ATM withdrawals. In case you use the card at the ATM you will be charged $4 per transaction. ALSO SEE 5 tips to save money when you travel abroad
A good option would be to opt for a multiple currency card, so that even if you run out of one currency that was loaded you have back up. For instance, if you are in Thailand and you run out of Thai Baht that was loaded in your card along with US Dollars, the card providerwill allow you to use balance of US Dollars in case you run out of Thai Baht.
The added benefits of using a prepaid card are:
It is safe and secure as most of them are chip and pin enabled.
In case of theft or loss of your prepaid travel card, you can have the card blocked and transfer the funds to your new replacement card. This replacement card is usually given as a backup along with your forex card kit.
You can top up the card whenever you run out of money.
Some cards even provide insurance service at an additional cost.
Avoid the usage of debit/credit cards at ATMs abroad
Debit and credit cards let you access funds at ease when you are out of money. However, it is important to check if your card is an international card. Also, note that when you use it outside the country the transaction happens inthe foreign currency and currency conversion mark-up ranging up to 5 percent will we charged. When you withdraw cash from an ATM abroad through a credit card, you could be slapped a heavy charge of $10-25 per withdrawal.In addition, as with all credit card transactions, if you don’t fully repay the amount within the stipulated time, you could be charged an interest rate of 18 per cent to 27 per cent.If you use your debit card to make a purchase abroad, the same acquiring cross-currency charge will apply. Therefore, it is advisable to make majority of your transactions abroad via forex cards and carry credit, debit card along as backup. ALSO SEE This is why you must buy travel insurance before your next trip
These might sound like a cumbersome but trust us, you just need to take note of a few things to make your travel hassle free. The right way of managing your forex need is by choosing a mix of cash and cards that suit your needs. For frequent travellers they could opt for one regular travel card and have a credit card for emergencies, apart from carrying certain amount of currency in cash. If your trip involves going to multiple destinations it is important to note which currencies are accepted in those countries, for example in Europe not all countries transact in Euros.Double check on any restrictions that a country may have for foreign travellers and remember that you cannot use travel or debit cards over the counter in banks or to make withdrawals.Now that we have helped you sort your forex needs, all that you need to do is chart out your trip today and make your vacation a memorable one.
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