Travel · Free tool
Forex Card vs Cash vs Credit Card
For international travel, the cheapest option depends on amount, purpose (tour package or self-arranged) and how much you've already remitted in the FY (₹7L threshold).
To track ₹7L LRS threshold.
Forex prepaid card(cheapest)
Currency cash (via bank)
Credit card abroad
TCS is refundable as ITR credit. The card market rate is ~3% better than cash counter.
What you actually pay
Forex prepaid card: loads at a margin of 0.5–1.0% over interbank rate, ATM withdrawal abroad charges ~$2–5 per pull. Currency cash: airport dealers add 2.0–3.5% markup — cheapest is RBI-authorised dealers in town. Credit card abroad: ~3.5% markup + 3.5% cross-currency mark-up + 18% GST on the markup ≈ 4.0–4.5% all-in. From 1 Oct 2023, Liberalised Remittance Scheme (LRS) TCS at 20% kicks in above ₹7 lakh per FY for non-education / non-medical use; credit cards in overseas swipes were exempted, but forex card loads and bank wires aren't.
Worked example
A 10-day Europe trip needing €3,500 (≈ ₹3,15,000): forex card loaded at 0.75% markup costs ₹3,17,363 with no TCS (under ₹7L). Same amount in cash with 3% markup costs ₹3,24,450. Same amount swiped on a credit card costs ~₹3,28,000 (4% all-in markup) but earns 2–5% reward points if it's a travel card — net cost ₹3,18,000–3,21,000. If you've already remitted ₹6 lakh this FY for a relative's tuition, loading another ₹3 lakh forex card means ₹2 lakh of it crosses the ₹7L line and attracts 20% TCS = ₹40,000 (refundable in ITR but a cash flow hit).
When to use this
- First trip abroad — deciding between forex card (Niyo, BookMyForex, Thomas Cook) and cash
- Frequent travellers tracking the ₹7 lakh LRS bucket across the FY
- Premium credit card holders comparing reward-stacked spending vs zero-markup forex card
- Students going abroad — education remittance has a 5% TCS, not 20%, above ₹7 lakh
Related: DTAA tax credit if you also earn foreign income, and income tax calculator for claiming TCS as advance tax.
FAQ
Should I carry currency cash or use a forex card?
Forex card for the bulk (~80%); USD cash for incidentals (taxis, tips). The card is safer (PIN-protected, freezable on app), better rate (no markup vs cash counter ~3% spread). Reload via app abroad if needed.
Are credit card transactions abroad worth it?
Only if you have a no-FX-markup card (HDFC Infinia, Amex Platinum etc.). Standard cards charge 3.5% markup + 18% GST = 4.1% effective extra cost — far worse than forex card.
Why is TCS lower for tour packages than self-arranged?
Govt incentivises declared tour packages (formal tour operators report TCS to IT dept). First ₹7L per FY at 5%, above at 20%. Self-arranged investment / gift / other → 20% throughout above ₹7L.