Pre-paid Forex cards are like international debit and credit cards, used for purchase transactions abroad. The Pr-paid forex cards are pre-loaded with funds and can be used across the globe at merchant outlets. It enables the user access to money in the regional currency and are available in US $, Euro, Australian dollar, Canadian dollar, Singapore dollar, Sterling Franc, Japanese Yen, AED (Dirham), Swedish Kroner etc.
Forex card is like credit card for purchase transactions. The difference between the two is that in case of forex card, the transaction amount is directly debited from the card holder’s Forex Card balance. The card can be used to withdraw cash at all VISA ATMs worldwide.
Features of Pre-paid Forex Cards
- You can withdraw cash in the currency of the country you are traveling in, irrespective of the currency of the card.
- You can check the balance in your card anytime.
- The card can be re-loaded with funds if you happen to run out of balance while still abroad.
- Exchange fluctuations may not affect you, in case of pre-paid forex cards, because you spend at the rate as on the date you loaded your card.
- The pre-paid forex card is an ‘across the shelf’ product which can be bought even on the day of travel, subject to the funds being provided the same day.
- If a balance is left in your card after your return to India, it can be encashed.
- An individual cannot hold more than a single card of the same currency at any given point of time. If you are traveling to different countries on a single trip, you can purchase one card each on different currencies.
- The pre-paid forex cards cannot be used in India. It can be used only for checking the balance and changing the PIN. No financial transactions are allowed in India, Nepal & Bhutan, under FEMA guidelines.
- The amount of money loaded or reloaded on the card should be done as per the Foreign Exchange Management Act, 1999 (FEMA), and prevailing RBI regulations in force.
- Pre-paid forex cards come with some additional benefits like personal accident insurance cover, loss of checked baggage cover, lost passport reconstruction cover.
- You need not necessarily have an account in the bank from which you decide to get a pre-paid forex card.
How to obtain Pre-paid Forex Card
- You have to fill in the application form available with the card issuing bank.
- Submit form A2 (or any other forex documentation as mandated by FEMA).
- Submit a photocopy of your passport.
- Submit the required funds.
- Once the fund gets cleared the bank will get the card activated for use, which is usually a couple of hours after loading.
- For re-loading while you are abroad, you will have to ask your family members back home to fill up the necessary forms for reload of your card.
- For encashing the balance left in your card after you return home, you have to fill up the refund form with the bank and the funds will be credited to your account.
What to know before buying a pre-paid forex card
Many banks issue pre-paid forex cards. They may have different charges and benefits. Therefore it is beneficial to study the features of different card issuing banks and select the most cost effective one.
- Find out the network outlets where the card can be used
- The issuing cost of different banks
- The time taken to issue
- The charges on ATM cash withdrawals
- Balance enquiry charges
- Reload procedure and charges
- Other benefits
Security – A secure PIN helps to secure all your cash withdrawal transactions. The allotted PIN is unique for every card and cannot be changed at any domestic or international ATM. If the card is misplaced, you should immediately inform the customer service of the issuing bank, and the card will be immediately blocked.
Suggestions & recommendations
- It is wiser to use the card in the country of origin. Use the USD card in the US only and not in the UK or any other country, to save cross country charges.
- Do not use Pre-paid forex cards to avail of facilities with uncertain duration like hotel stays or car rentals. Hotels usually take a pre- authorization as a security amount when you check in. In case you plan to check out of the hotel before the stipulated time, your money will get blocked.
- Commence the usage of the card only after a couple of hours.
- Ensure that you have received the PIN and signed on the signature panel at the back of the card.
- Always remember the PIN allotted to you with the card pack.
- Never give your PIN to the merchant even if requested. PIN is not required for point-of-sale transactions.
- In case there will be no one back home, when you will be traveling abroad, you should intimate the bank in advance (before leaving), and leave the necessary documents with your trusted representative. This will be needed if you happen to run out of balance and have to reload the card while still abroad.