A pack of one dozen eggs costs around Rp22,800 in Indonesia. Does that sound like a lot? Well, it isn't really. It's the same as $1.50 or around £1.40. It doesn't sound so bad anymore, does it? As an international student in a foreign country, you're constantly dealing with a currency unfamiliar to you, which can be very confusing. To simplify your life, we've created the ultimate forex and foreign exchange guide so you can learn about the forex market, foreign exchange rates, and forex cards.
What is Forex?
The exchange of one currency into another is known as foreign exchange, or forex. A nation's currency is valued in a free economy by supply and demand. In other words, the value of a currency may be linked to the currency of another nation, such as the dollar, or even to a bunch of different currencies. The government of a country may also determine the value of its currency.
What is a Forex Card?
A Forex or a foreign exchange card is a card that supports and carries foreign currency when you travel and settle abroad. You can load the card with any currency, depending on where you are about to travel. Consider it as a prepaid card loaded with different currencies like AUD, GBP, SGD, USD, and CAD, which, upon loading, can be used as a debit card for all your foreign transactions.
Wondering what a forex card is used for? A forex card can be used in restaurants, theatres, bus or rail passes, shopping, and hotel bookings. You can also use Forex cards to withdraw foreign exchange from ATMs.
Benefits of Forex Card
Student Forex cards are the best options for anyone pursuing their education in a foreign nation because they offer an extended range of advantages and privileges. They make it simpler to do transactions overseas. A forex card ensures an effortless experience for all new students and lessens the numerous inconveniences associated with making payments. Some key benefits of forex cards are:
1. Multi-currency
Many forex cards can be used in different countries and converted into multiple currencies. For example, you may load your card with pounds in the UK and use it in the US, Spain, and India if you travel to multiple countries in one trip.
2. Locked-in Rates
Most forex cards allow cardholders locked-in rates that protect them from fluctuations in exchange rates. Once you load the card with your currency, rate fluctuations won't affect your balance.
3. Earn rewards
A good forex card also often comes with a rewards system that allows you to earn points every time you use it. Points can often be redeemed at popular retail locations, restaurants, and airlines.
4. Easy and Hassle-Free Transactions
Once your Forex Card is loaded, you don't need to worry about exchange rates and account limits.
5. Easy to Load Money:
By using your bank or Forex card provider's website, you can load and unload money through internet banking.
6. No need to worry about Currency Conversion
As you upload money into your account online through your existing account, you need not worry about carrying out a conversion, as the bank will do it for you! The rates are blocked once you enter the desired amount into the Forex card account to avoid currency fluctuations.
7. No International Transaction Fees
As you load the card online with the correct conversion rates, you need not pay extra tax or international fees as you spend abroad. Spending money on transaction fees is an additional expense that you can avoid by knowing what a forex card is.
8. You can Withdraw Cash in the Local Currency from any ATM
As your Forex card doubles as a debit card, you can withdraw Cash from any ATM.
How does a Forex Card work?
Questions like what is a Forex Card and how a forex card works always cross a student's mind. So below, we will discuss the mechanism of a forex card. A Forex card needs to be loaded with the currency of your choice, as per the applicable Forex rates, when you are in your home country to activate it. Once the card is loaded and activated, there is no need to worry about fluctuating Forex rates. Once you reach your destination, you can use the card wherever you'd like (and how many times you'd like). You can also reload the card using the online portal or net banking.
Companies like BookMyForex provide Forex Cards with zero issuance charges or loading/unloading charges, with funds received within 48 hours abroad. BookMyForex gives you the best Forex rates compared to multiple Forex companies, with zero commission and hidden charges. It is one of the safest and most convenient ways to carry foreign currency. Visit the website to learn more about BookMyForex's features and services.
Forex Card for Students
There are two different types of forex cards for students based on the currency:
- Multi Currency Forex Card - The card is loaded with different currencies of the countries you wish to visit.
- Single Currency Card - The card is loaded with the single currency of the country you visit
How to Apply for a Forex Card
While applying for a Forex card, you must provide certain information and documents to prove your identity and reasons for getting a Forex card.
Here are some documents that you may need to show:
- PAN Card Number
- Copy of Passport
- Self Attested Copy of Visa and Ticket
Forex Card vs. Credit Card
Students often wonder what a forex card is and what is the difference between a forex card and a standard card. The main difference between a Forex card and a credit card is that a Forex card is an inexpensive and safer alternative to an international credit card. When you load a Forex card with money, the amount gets locked and does not give in to currency changes and fluctuations. Forex Cards are more convenient because you can withdraw money without paying extra fees.
You can load and unload cash with an international credit card without loading and unloading cash. Still, it is more expensive, given that you need to pay a small fee for every transaction, and you also can not use a credit card to withdraw cash in case of an emergency. As a student studying abroad, you would want to use a Forex card as you would save more money, but keep a credit card handy in case you need extra funds or run out of money on the Forex card.
What is a Foreign Exchange Rate?
The price of the domestic currency relative to another currency is referred to as the foreign exchange rate. Comparing different currencies to demonstrate their relative values is the goal of international exchange. The rate at which one currency is exchanged for another or the price of one currency expressed in terms of another is two other foreign exchange rate definitions.
For example, the current exchange rate of the GBP (Great British Pound) with respect to INR (Indian Rupee) is 1 GBP to INR = 88.2202. This means that something that costs £5 will cost ₹( 5 x 88.2202).
There are two types of exchange rates: fixed and variable. The country's central bank sets the fixed exchange rate, while market demand and supply dynamics set the floating rate.
What is the Forex Market?
The forex market of foreign exchange market is where currencies of different countries are traded. For foreign trade and business to run smoothly, the forex market's smooth running is essential. This allows us to make cross-country purchases and buy and sell products and services across borders.
There is no actual central marketplace for foreign exchange. Trading currency happens electronically, over the counter, by different traders through their computer networks worldwide. Instead of having one centralized exchange, foreign exchanges happen 24x7 over the internet. Currencies are traded across major financial centers - New York, Sydney, Tokyo, Zurich, Hong Kong, London, Singapore, and Frankfurt - all across major time zones so that the market can be open throughout the day.
Foreign exchange is a challenging topic at first, but once you break it down, it's pretty simple to understand. As an international student, your finances are often hard to track, especially when you're not dealing with your local currency. We hope you've found our forex guide informative and feel better prepared for your student journey.
Why does understanding forex matter to a student?
Understanding forex and forex rates have significant practical applications for students. For example, if you're about to spend £10 on a shirt and don't know whether that's a wise purchase, if you know the exchange rate of your currency with the GBP, you can quickly convert the price of the shirt into your local currency and see whether it seems like a good buy.
As an international student studying in a different country, managing your finances can be difficult. Whether you make friends from a new country, plan on traveling, or want to stay up to date with the world news, it is suitable for international students to understand the foreign exchange market and how it works.
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