Use prepaid forex card abroad to avoid currency fluctuations

Pay in local currency instead of Indian rupees to circumvent dynamic currency conversion

- HIMALI PATEL

Recently, during a trip to Europe, Amit Arora (name changed on request), a businessman from Gurugram, made a small yet costly mistake. He chose to pay for goods in rupees instead of euros, even though both options were available. This seemingly minor decision increased his final bill by nearly 7 per cent. This is one among several errors Indian travellers commit when handling payments abroad.

Use prepaid forex card

One smart option is a multi-currency prepaid travel card loaded with the local currency. "These cards allow payments at points of sale, facilitate online purchases, and enable cash withdrawals from ATMs,” says TC Guruprasad, managing director, EbixCash World Money. He adds that these cards also offer the security of PIN protection for each transaction.

A forex card is loaded with a specific currency at a predetermined exchange rate. "This helps avoid the risk of exchange-rate fluctuations," says Swapnil Bhaskar, chief strategy officer, Niyo.

A prepaid travel card can be a useful tool for budgeting. "It helps you stay within your budget while travelling," says Vishal Dhawan, founder and chief executive officer (CEO), Plan Ahead Wealth Advisors.

However, there are a few drawbacks. According to Bhaskar, a forex card may lack additional benefits like airport lounge access, or rewards and discounts on travel-related bookings.

Dhawan advises travellers to fully understand how to reload the card in case the balance runs out during the trip. He also suggests carrying two cards as a precaution, in case one is lost or damaged.