Travellers, though they’re aware of how to safely carry money when on the road, may feel disgruntled with extra charges on their monthly bill when back home. While these may be unavoidable in most cases, there is much we can do to minimise costs when dealing with foreign exchange. 

It began with traveller’s cheques where you ask the bank to value cheques for a fixed amount. You sign first on receiving the cheques and sign again when you cash them. If lost, they’re easily replaceable once the bank has been informed of the theft. 

In spite of it being a safe option, they’re fading out. Reason: they’re expensive compared to cards; unused ones may not give back all your investment when returned to money exchangers; many commercial establishments don’t recognise them anymore. 


Never convert more than US$100 at the airport, you will be charged higher than the market’s exchange rate. This is enough to pay for your taxi and get yourself a cup of coffee and a snack maybe. 

Banks are your best bet for good rates, and they won’t cheat you. 

If you are carrying above US$10,000 or its equivalent in any other currency when flying, it is imperative that you declare it to customs — at the home country and at the disembarkation port. Each have an allowance bracket that is usually reasonable. 

Further, in case of theft, your travel insurance will cover only up to a certain amount. On the upside, vendors tend to give discounts when dealing with cash as opposed to cheques and cards. 


It’s a convenient option, no doubt. You travel cashless, it saves you a trip to a currency exchange counter and all such related hassles. However, although your bank won’t cheat you on the exchange rate, it may charge extra for using the debit card overseas. 

  • If your bank doesn’t have a branch in the country you are visiting, you may pay a fee to use another institute’s ATM. This is called the transaction/withdrawal fee. 
  • Your bank may take a nominal commission for currency conversion. 
  • The foreign ATM may also charge you for using their service with a foreign bank card.

Elaborating on these points, Sumit Bali, Sr. EVP & Head – Personal Assets, Kotak Mahindra Bank says, “Even when the other [foreign] bank may charge a fixed fee per transaction, which is known as “access fee”, the bank usually  takes cardholder approval on the fee charged. So you know when you’re being charged.” 

Tip: As a frequent traveller, it is best to hold an account in an international bank with a wide reach. This way in case of discrepancies, you can immediately walk over to any branch for a solution. The other option is to choose a bank with no or low international fees. Also, before you travel, check with your bank the policies and charges attached to using your debit card in foreign countries. 

Take out larger sums to avoid a per withdrawal fee. And for safety, keep only how much is required in the bank account accessed during the trip, leaving the option of transferring funds as and when needed from another account through internet banking. 


They are less complicated. The biggest point that trumps credit cards over debit cards is that in case it is stolen, you don’t have to pay for fraudulent purchases made if you inform the bank immediately. This and the fact that you’re not charged a per transaction fee. If your credit card has a rewards programme, you’re additionally benefited with the returns you get for swiping. 

Yet, watch out for currency conversion fees. They may vary for each credit card company and the difference can be as wide as 10 per cent. Also, when swiping, do not opt to be charged in your home currency as merchants tend to use higher currency exchange rates than the market. “They [retailers] can apply currency conversion only if they support Dynamic Currency Conversion and that again will need customer consent. Other than that, retailers are not allowed to levy any charges to the cardholder except for the goods sold,” Bali advices. In this case, you’re only paying a higher conversion fee, and nothing additional to the retailer. 

Tip: Make it a habit of informing your bank about your overseas travel so they don’t block the card if they suddenly see purchases made abroad. This isn’t fool-proof, but it does reduce the chances of being inconvenienced. 


They are even more safe than the debit and credit cards because none are directly linked to your bank account, and the spend limit is what you want it to be. The amount you feed into the card should ideally be the currency of the country(/ies) to which you’re travelling. 

“There are no hidden costs for travel cards, the customer should keep this in mind,” says Parag Rao, Country Head, Card Payment Products, Merchant Acquiring Services and Marketing, HDFC Bank. “You’re only charged extra for currency conversion if the card isn’t loaded with the local currency. However, you can purchase one multi-currency forex card and keep loading the currencies of your destination each time you travel without having any need to purchase a new card every time. The system will pick the currency based on the location where the card is used.” 

Bali points out another benefit of using travel cards: “Consumers can lock the exchange rate at the time of loading the card itself, and this is the biggest advantage of using a prepaid travel card.” This means, if the value of the foreign currency is dropping weeks prior to your travel date, it is a good idea to block the rate on your card. This way you get more for less, as even if the foreign currency’s value rises later, it doesn’t affect you. 

The card works just as well as a debit card with a VISA or MasterCard logo, and it can be swiped at any shop, restaurant or hotel. Some prepaid card companies even have a cash-back offer for particular seasons — check with your bank. 

“The best thing about travel cards is that standard charges are communicated upfront. This is exactly why the ease of usage is driving customers towards prepaid cards,” says Bali. 

With multiple options being available to customers where one may opt for the best or most suitable ones, it is advisable to carry multiple cards in case of emergencies.