What is Forex Card: 5 Amazing Benefits and Types Explained

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. Let us dive into Forex and Forex cards and understand their pivotal role while traveling abroad.

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 another nation's currency, 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. It can be used in restaurants, theatres, bus or rail passes, shopping, and hotel bookings. You can also use the cards to withdraw foreign exchange from ATMs.

Types of Forex Cards

There are two different types of Forex cards for students based on the currency:  

1. Multi-Currency Forex Card - The card is loaded with different currencies of the countries you wish to visit. 
2. Single Currency Card - Known as the single currency card, this card is loaded with the single currency of the country you visit.
3. Contactless Forex Card - Contactless Forex Cards are a very convenient and new solution for travelers who are seeking a more seamless and secure way to manage their finances while abroad. These cards come with a contactless payment feature, helping users to make quick and hassle-free transactions with just one tap.
4. Prepaid Debit Card - Prepaid debit cards are similar to regular debit cards and can be used for purchase transactions as well as ATM withdrawals. The debit card is loaded with a specific amount of money in a specific currency, similar to a single currency card, and the user can spend up to that limit. 
5. Cobranded Forex Card - Cobranded Forex cards are basically a collaboration between specific travel companies and banks or other financial institutions. The user thus gets various benefits and discount offers while paying with this card. 
6. Forex Card For Students - A Forex card for students is very similar to any regular Forex card. However, it is specially designed for students living abroad. The card is thus easy to use, easy to track and comes with a variety of benefits. 

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. Two other foreign exchange rate definitions are the rate at which one currency is exchanged for another or the price of one currency expressed in terms of another. 

For example, the current exchange rate of the GBP or £ (Great British Pound) concerning INR or ₹ (Indian Rupee) is 1 GBP to INR = 88.2202. This means 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.

How Does a Forex Card Work?

Questions like what a Forex Card is and how it works always cross a student's mind. So, below, we will discuss the mechanism of how the card works. 

The 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 or loading/unloading Forex card 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 Forex card 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 Features

Forex cards have a lot of features that can be quite beneficial during foreign travel. Some of them are listed below:

• It is a safe way of making overseas payments as it comes with the same security features as a credit card.
• Its user-friendliness and acceptance worldwide have made it easy for cardholders, who need not worry about searching for an ATM or other payment methods.
• Cardholders need not worry about any potential loss due to the fluctuations in the currency values. They are protected from these changes as the currency amount loaded into the card is based on the present day's exchange rate. 
• Cardholders can decide their budgets and a top-up card (if required) while spending abroad, as these cards are pre-loaded, making it easier to regulate expenses.
• It is a convenient and secure way for travelers to make transactions, compared to the hassle of carrying cash or traveler's cheques.

Forex Card Benefits

Forex cards for students are the best options for anyone pursuing their education in a foreign nation because they offer an extended range of advantages and privileges. Some key benefits of these cards are: 

‍1. Multi-currency

It 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 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. Easy and Hassle-Free Transactions

Once your card is loaded, you don't need to worry about exchange rates and account limits. m,

‍4. No need to worry about Currency Conversion

As you upload money into your account online through your existing student account, you need not worry about conversion, as your student bank will do it for you! The rates are blocked once you enter the desired amount into the card account to avoid currency fluctuations.

‍5. 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 you can avoid using the card.

Forex Card Application

While applying for a Forex card, you must provide certain information and documents to prove your identity and reasons for getting the card. Here are the steps you need to follow to apply for the card: 

• Choose a bank or financial institution that offers special student fares on Forex card services.
• Visit the bank's website or nearest branch to apply.
• Fill out the application form with personal details.
• Submit the required documents, such as a copy of your passport, visa, and air tickets.
• Choose the type of card and currency you want.
• Pay the required fees.
• Wait for the bank to process your application and issue the card.
• Activate the card once you receive it.
• Use the card to make payments and withdraw cash in foreign currency.

Documents

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 Charges

Forex card charges refer to the fees and expenses associated with using a prepaid card for foreign currency transactions. Some common forex card charges are discussed below:

• Card issuance fee: A one-time fee is charged when purchasing the card.
• Reload fee: This is charged when you add funds to your card.
• ATM withdrawal fee: A fee charged when you withdraw money from an ATM using your card.
• Currency conversion fee: This is charged when you use your card to make a transaction in a currency different from the one loaded on the card.
• Inactivity fee: Some cards charge a fee if you don't use the card for a certain period.

Forex Card vs. Credit Card

Students often wonder about the difference between a Forex card and a standard credit card. The main difference between the two 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. They 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 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 former. Here are the best Forex cards for students.

Do's & Don'ts of Using a Forex Card

Forex cards offer convenience and security during international travel, but only if you remember the best practices and things to avoid. Some of them are given below:

Do's

• Check your balance: Ensure that you regularly check the balance on your card to avoid running out of funds abroad.
• Notify Issuer: Inform your card issuer about your travel dates and destinations to prevent transactions from being flagged as suspicious.
• Use ATMs Wisely: Make ATM withdrawals sparingly due to transaction fees. Opt for larger withdrawals to minimise charges.
• Keep Emergency Cash: Carry a small amount of local currency as a backup if the card isn't accepted at certain places.

Don'ts

• Share PIN: Never share your card PIN or CVV with anyone to prevent unauthorized access to your funds.
• Use Untrusted ATMs: Avoid using ATMs in unfamiliar or secluded areas to minimize the risk of card skimming or theft.
• Dynamic Currency Conversion: Decline offers to convert transactions into your home currency at merchant terminals, which may lead to unfavorable exchange rates.
• Neglect Terms: Familiarize yourself with the card's terms, fees, and expiry to avoid surprises during your trip.

Tips to Use a Forex Card

If you are a student, check out the Top 9 Forex card uses. Here are some tips for using the cards efficiently: 

1. Make a plan: Estimate your spending before you travel and fill your currency card accordingly. This will save you money on currency exchange expenses.

2. Utilize ATMs wisely: To avoid hefty ATM withdrawal costs, use ATMs belonging to partner banks. Additionally, withdraw bigger sums at once to reduce the number of withdrawals and related costs.

3. Keep an eye on your balance: Check your currency card balance frequently to avoid running out of funds while traveling overseas. This is normally done online or via a mobile app.

4. Prevent dynamic currency conversion: When conducting business in a foreign nation, you may be asked whether you want to pay in your home or local currency. To avoid expensive conversion costs, use the local currency.

5. Fees to be aware of: Learn about the fees connected with your FX card, such as issuance fees, reload fees, and inactivity fees. To save money, get a card with reduced fees.

Managing your finances can be difficult as an international student studying in a different country. 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. You may want to read on how to save in a foreign country! Also, check out this oyster card guide, which will clear all your related queries.