International travel and online foreign currency transactions often come with additional costs in the form of foreign exchange markup fees. Most credit cards charge a forex markup ranging between 2% and 3.5% on every international transaction, which can significantly increase your expenses.
Zero forex markup credit cards are designed to eliminate this extra charge, making them a preferred choice for frequent international travellers and overseas spenders.
A forex markup fee is an additional charge levied by banks when a transaction is made in a foreign currency. This fee is added over and above the exchange rate set by card networks like Visa, Mastercard or RuPay.
For example, if you spend Rs. 1,00,000 abroad using a card with a 3.5% forex markup, you end up paying Rs. 3,500 extra, excluding GST.
Zero forex markup credit cards do not charge any additional markup on international transactions. You only pay the base exchange rate applied by the card network.
However, GST on forex transactions may still be applicable in some cases, depending on the card issuer and transaction type.
Consider an international spend worth Rs. 2,00,000:
Using a card with 3.5% forex markup
Extra cost would be around Rs. 7,000 plus GST
Using a zero forex markup credit card
Extra cost would be almost nil
Over multiple international trips or foreign online purchases, these savings can be substantial.
While zero forex cards eliminate markup fees, cardholders must still check for other possible charges such as:
Annual or joining fees
Dynamic currency conversion charges by merchants
GST applicability on certain transactions
Lower reward rates on international spends
Some zero forex cards may also exclude international transactions from reward earnings.
These cards are ideal for:
Frequent international travellers
Students studying abroad
Professionals with overseas business expenses
People who shop frequently on international websites
If your foreign spends are occasional, the cost-benefit of a zero forex card should be evaluated carefully.
Regular travel credit cards may charge forex markup but offer higher reward points, lounge access and travel insurance. Zero forex cards focus primarily on reducing transaction costs rather than lifestyle benefits.
Choosing between the two depends on whether savings on forex charges matter more than rewards and perks.
Before choosing a zero forex markup credit card, always check eligibility criteria, annual fee waiver conditions, reward exclusions, and network acceptance abroad.
Using the right card for the right transaction can help you optimize your international spending effectively.
Zero forex markup credit cards are powerful tools for anyone with frequent foreign currency expenses. When used wisely, they can save thousands of rupees annually while keeping your international transactions simple and transparent.