If you are applying for a credit card to cover expenses on a foreign trip, the first thing you should do is understand the fees levied on foreign transactions. Foreign transaction fee or forex markup fee is charged on every purchase made in a foreign currency. However, some banks do not impose this fee. In this article, we’ll explain what foreign transaction fees are and highlight credit cards in India that offer a waiver on this charge.
Foreign transaction fees
A foreign transaction fee, also known as a foreign markup fee, is charged by banks when you use your credit card for transactions outside your home country. This fee, depending on the card-issuing bank, can be anywhere in a range of 0% to 3.5%.
The foreign transaction fee is charged on various transactions, including retail purchases abroad, online transactions in foreign currencies, cash withdrawals from ATMs overseas, and transactions in India with a point-of-sale (POS) linked to an overseas account.
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Understanding the calculation of foreign transaction fees
For example, if you do a shopping worth Rs 10,000 in foreign currency and a foreign transaction fee of 3% is levied on this transaction, you would incur a markup fee of Rs 300 plus 18% GST. So, in total you pay Rs 354 additional. Since different cards have different markup fees, it is important to find a card with minimal or no foreign transaction fee in order to reduce your overall expenses.
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Below is a list of top zero markup forex credit cards. This data is sourced from BankBazaar.com. Readers should verify the information independently and exercise caution, as terms and conditions may vary and change over time.
Best forex credit cards with zero foreign transaction fees or markup fees
- HDFC Bank Regalia ForexPlus Credit Card
Joining Fee: Rs 1,000 plus GST applicable
HDFC Bank Regalia ForexPlus Card comes with a range of features. This card can be used to make transactions to save yourself from the hassle of carrying multiple currencies in your wallet.
Among the key features of this card are – This card can be loaded in US dollars and then can be used in any currency. Also, there are no cross-currency charges. Cardholder can enjoy up to 8 complimentary airport lounges visits every year.
- IDFC Bank First Wow Credit Card
IDFC Bank First Wow Credit Card users can earn 1 reward point for every Rs 150 spent (each point valued at Re 0.25). Remember that rewards are not applicable for fuel purchases, EMI transactions or cash withdrawals. As of August 21, 2023, card users can now earn 1x reward points on insurance premium payments and utility bill payments. There is a cash advance fee of Rs 199 per transaction. The forex conversion fee is zero.
- Federal Bank Scapia Co-branded Credit Card
Federal Bank Scapia Co-branded Credit Card, with no joining or annual fees, offers unlimited domestic lounge access with a minimum spend of Rs 5,000. Card users can earn 10% Scapia coins on every eligible online and offline expenditure. They can get 20% Scapia coins on travel bookings made through the Scapia App. The card features zero forex markup on all international transactions.
- Axis Bank Burgundy Private Credit Card
Axis Bank Burgundy Private Credit Card offers 30,000 welcome EDGE REWARD points after first transaction. This card offers no cash withdrawal charges or interest until the payment due date, and there’s no forex markup on international transactions.
- RBL World Safari Credit Card
RBL World Safari Credit Card offers you lounge benefits on earning 10,000 bonus travel points, valued up to Rs 2,500, when you spend Rs 2.5 lakh in a membership year. Spend Rs 5 lakh in a year to earn an additional 15,000 travel points, worth up to Rs 3,750. For spending Rs 7.5 lakh annually, you’ll receive a gift card worth Rs 10,000 from certain brands. The card also offers a 0% markup fee on foreign currency transactions and two complimentary lounge visits every quarter at major domestic airports in India.
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