Imagine! You have been planning to go to Venice with your gang since a year and you finally have made all the reservations keeping in mind all of your friends’ conveniences. You arrive there and visit several beautiful places and decide to do some shopping. The shopping and buying presents for your parents and siblings go a little too far and halfway through your shopping your card’s limit has arrived and now you don’t know what to do?
Well, what you could do is purchase an international travel card before actually planning to go to any international tourist spot. Why? Well, one of the reasons being that these cards are specifically designed for international purchases and provide better cashbacks and rewards compared to a local credit card.
However, before you go pack your bags for Venice, it is better to understand how these cards work and make sure that you have done thorough research and are ready to go and enjoy your trip.
- 1 What is an international Travel Credit Card?
- 2 Types of International Travel Credit Transfers
- 3 Fees and charges applicable on an international credit card
- 4 FAQs Related to International Credi Card For Travel
- 4.1 Q. How do I know what the convergence fee of a country is?
- 4.2 Q. Are there any International Debit Cards?
- 4.3 Q. Is the convergence fee applicable on a debit card as well?
- 4.4 Q. If the convergence factor of when I purchased the item is different from when I receive the credit card bill, which amount will I have to pay?
- 4.5 Q. Can I use a standard credit card internationally?
What is an international Travel Credit Card?
An international credit card is specifically designed for using it in when you travel abroad. The countries in which you can use a card in are limited and hence, you should discuss it with your bank before actually purchasing it.
The cards are always equipped in a way so as to provide you discounts on international brands and provide cashbacks when the card is swiped or tapped in a specific country. Not only that, the cards also allow you to withdraw money from international ATMs so that if a situation arises where you can swipe or tap the card you can withdraw the cash and make the payment.
However, be careful that the cost of an item increases by 5% to 6% for the end consumer. This is because two different entities are involved in the payment process. The first being the bank, like the SBI or HDFC, or ICICI. The second is the network service that enables these International payments like MasterCard or VISA.
Because of this, the end-user has to pay around 5% to 6% extra on the overall cost.
Also Read: Different Types of Credit Cards in India
Features of International Travel Credit Cards
- Can be used for both online as well as offline international transactions
- Can access international lounge facilities
- Earn reward points for every international purchase
- Special discounts on international flight and hotel bookings
- Low additional fee compared to a regular fee
Types of International Travel Credit Transfers
1. Standard Transactions
These are the standard or general transactions that happen when you swipe or tap your card for payment. It takes around 2 to 3 days for the transfer to happen
2. Next Day or Scheduled Transactions
As the name suggests, Scheduled Transactions are the ones that have been prescheduled. The transactions are scheduled on a specific having exact information about the time along with the date.
3. Urgent Transactions
These transactions are those that happen from one account to another instead of through swiping or tapping a credit card. These transactions, although happen through cheque or NEFT or RTGS, don’t take the 2 to 3 working days that are usually required for the transfer. These transactions are scheduled within a single working day.
4. In-Company or In-House Transactions
This is when the transaction is happening within the same company between two cross-border branches. As the transaction is within the family, the transaction happens faster than the standard transactions.
Fees and charges applicable on an international credit card
1. Foreign Currency Conversion Fee
When you go to a foreign country the currency of the country is different from that of the Indian Currency. In this situation, a convergence fee is applied which is 1% or 2% (depending on the bank and the credit card). You have to pay this additional fee. Say you are going to a country where one Indian rupee is 50 of that country’s currency, and you are making a payment of 700 currency. The bank charges around 1 or 2% of the transaction i.e. 1% of 700 being 7 and then converting to Indian rupee being 14 Paise. This profit is generally very small.
2. Foreign Transaction Charge
All credit card providers (SBI, HDFC, ICICI, etc.) charge a Foreign Transaction Fee which is around 2.5% to 3.5% of the amount that you spend. This charge is fixed and pre-decided by the bank depending on the card that you have purchased or are currently using.
3. Cash Advance Fee
Cash advances within the country itself aren’t free. So when a customer withdraws an amount while in a foreign country, an International Cash Withdrawal Fee is applied to the withdrawn amount. This charge can differ between 1% to 4% depending on the bank and the type of card you are using. Along with this, the Standard Cash Withdrawal fee is also applied to the withdrawal amount. Both the International and the Standard Cash Withdrawal Fee together form the Cash Advance Fee for an international cash withdrawal.
FAQs Related to International Credi Card For Travel
Q. How do I know what the convergence fee of a country is?
Ans – A list of all the convergence factors of different countries is released on the VISA as well as MasterCard websites. You can refer to those lists for knowing the convergence factor of the country you are travelling to. However, due to the constant fluctuating currencies of different countries, these rates may fluctuate.
Q. Are there any International Debit Cards?
Ans – Yes. Just like how there is an International Credit Card, the different banks provide International Debit Cards too. For a debit card however, there are no rewards associated with the card. The only merit of an international debit card is that the convergence fee is comparatively less.
Q. Is the convergence fee applicable on a debit card as well?
Ans – Yes. The Convergence fee is applicable on a Debit Card as well.
Q. If the convergence factor of when I purchased the item is different from when I receive the credit card bill, which amount will I have to pay?
Ans – If a situation arises where there is a difference in the currency convergence rate on the day of your purchase than on the day where you receive your credit bill, then the convergence rate of when you had bought the product is applied.
Q. Can I use a standard credit card internationally?
Ans – Yes. You can use a standard card abroad as long as it has network providers like MasterCard and VISA that ensure international transactions. However, the fee that you have to pay on this car is comparatively greater to an International Credit Card.