Planning a trip to Europe involves a multitude of considerations, from booking accommodations to planning activities. Amidst these preparations, an essential question arises: Forex Card vs Cash - Which is Better while travelling to Europe from India?
This comprehensive guide will explore the advantages and disadvantages of both options, helping you make an informed decision.
Understanding Forex Cards
What is a Forex Card?
A Forex card is a prepaid card loaded with foreign currency, enabling you to make transactions while abroad. It can be used for online purchases, in-store payments and ATM withdrawals in multiple currencies.
Forex Card - Advantages
Security
A Forex card is not linked to your bank account, so if it’s lost or stolen, your primary funds remain safe.
Financial Management
Preloading funds helps in managing your expenses. You can reload the card if you need additional funds.
Convenience
Widely accepted across various establishments, eliminating the need to carry large amounts of cash.
Fixed Exchange Rates
Exchange rates are locked at the time of loading the card, protecting you from fluctuating rates.
Forex Card - Disadvantages
Reloading and Unloading Fees
Charges apply to reload funds and withdraw the remaining balance.
Lack of Rewards
Unlike some credit cards, Forex cards typically do not offer cashback or rewards.
Using Cash While Touring Europe
To understand which is better, a Forex Card or cash, you have to understand why carrying cash can be helpful when travelling to Europe. It is always helpful to carry some amount of local currency before travelling to an international destination.
Moreover, when paying tips at restaurants, cash is preferred over digital currency. If you can withdraw a good amount of cash at a time, you can also avoid paying multiple fees.
Advantages of Using Cash
No Transaction Charges
Cash transactions are free of international fees.
Supports Local Economy
Directly supports local businesses.
Universal Acceptance
Cash is accepted everywhere, even where card payments are not possible.
Disadvantages of Using Cash
Security Risks
Carrying large amounts of cash can be unsafe.
ATM Fees
Withdrawing cash from ATMs can incur high fees.
Accessibility Issues
You may encounter situations where accessing an ATM is challenging.
Cash vs Forex Cards - What is the Difference
Factor |
Cash |
Forex Card |
Acceptability | Accepted everywhere. | Accepted at almost all business establishments. |
Security | Not secure. | Highly secure with chip and PIN features. |
Replacement Cost | None. | A replacement fee is charged if it is stolen or lost. |
Fees and Charges | Local currency value is based on the exchange rate of the day. | No transaction fees; fixed exchange rates |
Exchange Rate | Fluctuates daily | Locked in at the time of loading. |
Convenience | Not convenient, as you can run out of cash anytime during your travel. | Pre-set expense limit, reloadable online |
Cash vs Forex Card - Why is Forex Card Better than Cash?
Is it better to carry cash or a forex card?
Forex cards provide a strategic advantage due to fixed exchange rates and enhanced security features. They allow better financial management and are widely accepted. Thus, for most travellers, Forex cards are a better option than cash.
Additional Tips: Using Specific Europe Credit Cards
As a backup, consider carrying
European credit cards. These cards often come with benefits such as travel insurance, reward points and zero foreign transaction fees, making them a viable alternative.
Ensure a Stress-free Europe Trip with Travel Insurance
Travel insurance is mandatory for trips to Schengen countries. It not only meets visa requirements but also provides financial protection against unforeseen events like medical emergencies or loss of personal belongings.
Reliance General Insurance
Schengen travel insurance is designed to cover these risks, ensuring you have a hassle-free trip.
Whether you are financially liable for third-party damage overseas or have fallen sick during your travel and need a family member to be with you during your hospitalisation, our policy covers everything.
Conclusion
Whether you choose to carry a Forex card or cash depends on your personal preferences and travel needs. Forex cards offer security, fixed exchange rates, and convenience, making them a preferred choice for many travellers.
However, having some cash on hand is also advisable for small purchases and tips.
Lastly, don’t forget to secure your trip with reliable travel insurance to mitigate any travel-related risks.
Frequently Asked Questions
Who is eligible to apply for a Forex Card?
Any Indian nation who is KYC-compliant can apply for a Forex Card. Additionally, any minor (above 12 years old) who wishes to apply for this card must have their application signed by their parent/guardian.
Is a bank account necessary to purchase a Forex Card?
No, a bank account is not required to apply for this card. You can purchase this card from any authorised financial institution or bank, provided you provide all the necessary documentation.