With more than 1.4 billion international tourists traversing the planet every year, the international travel industry is at an all-time high. Factors such as higher dispensable income, more leisure time, affordable airfares, better airway interconnectivity, cross-cultural interactions, and so forth have contributed to this unprecedented growth in international tourism, which was a meager 25 million in 1950, a 56-fold increase as of 2020.
Are you already a member of the "1.4 billion" club that travels internationally, or are you on your way to becoming one? If yes, then an international card
is something you should consider. Traveling abroad is an exciting experience. However, equally complex is the process of transacting money overseas. Although the usual credit and debit cards are the most convenient and popular method of transacting with merchants across the globe, they come with their fair share of demerits. What are they? Read ahead to find out!
What Are the Possible Demerits of Using a Domestic Credit Card for Transactions Abroad?
The domestic credit card you have right now will probably work the same way overseas, but the main difference remains the overhead charges. Credit cards come with various charges that apply domestically as well as overseas; however, the latter attracts additional costs that may go through the roof.
- Currency conversion fees are the extra charge levied for paying or withdrawing a currency that is not among the ones loaded on your credit card. For instance, if your credit card is loaded in INR, making a purchase in the US will attract a currency conversion fee of about 1 percent to 5.95 percent of the total withdrawal.
- Overseas Cash Advance Fee: It is the charge levied for withdrawing any amount of money from an international ATM. They are exclusive of the local ATM fee, which is the money charged by the ATM network. Overseas cash advance fees are usually a flat dollar amount (as high as USD 5.50) or a percentage of the withdrawal, about 2 to 4 percent. So, if you are withdrawing money in an overseas location using your credit card, the dispensed cash will automatically attract interest charges of around 19 to 22 percent in total, depending on the card.
So, you see, the charges of using a domestic credit card pile up to become enormous when used overseas. In addition, not all credit cards are accepted by merchants in foreign countries, limiting their usage and appeal. In such a context, an international card comes to the rescue.
What is an international credit card?
An international credit card is ideal for use domestically and overseas. Such cards are also excellent for making purchases on international websites. These cards are widely accepted around the world. However, the best part is that they do not charge any foreign transaction fees. If you are a globetrotter who hops from one country to another in a year or a study-abroad student, an international credit card can be an absolute lifesaver.
Top 8 Advantages of Using an International Card:
You Dodge Foreign Transaction Fees
As we have already mentioned, foreign transaction fees are among the most common overhead charges levied by your credit card service provider. When you make a purchase using your usual credit card abroad, the currency exchange is automatically done by the card issuer based on the current FOREX rate. In return for this convenient payment method, your credit company will charge an overhead fee, which gets reflected in your total withdrawal costs.
Although a surcharge of 3 to 5 percent may not seem like a big deal on a single purchase, when the surcharge is added to your other transactions, such as hotel reservations, transportation, entertainment, and ATM withdrawals, the final costs can reach three to four figures. However, an international card with a zero forex markup means you can transact a payment on an international merchant's PoS device or pay via an online seller's payment gateway without extra currency conversion charges. Simply put, you save a lot of money using an international credit card.
Exchange Rate Lock-in
The second benefit of using an international credit card is that the best ones come with a lock-in feature for foreign exchange rates. In other words, they are immune to exchange rate fluctuations in the FOREX market. You might already know that currencies are subject to constant exchange rate fluctuations, which can cause expense management challenges. Thus, if you opt to travel with the usual credit card or cash, an unfavorable fluctuation can lead you to lose a significant amount of money.
However, with international cards, your hard-earned money is protected. When you load an international credit or debit card using a trusted online forex platform, the money is loaded at a fixed rate that cannot be changed. As the rates are locked in, you are protected against currency fluctuations. For instance, if you have loaded USD 100 on your Forex card, its value will remain the same irrespective of alterations in the INR-USD exchange rate. The lock-in feature is a savior to international travelers, especially when the rupee value is fluctuating at an unprecedented rate.
Rewards and Points
The third benefit, that is, rewards, can only be reaped when using top-tier international cards that prioritize their customers' needs. The best international cards let you earn at a rate that may touch somewhere close to 5 percent per year, implying that when you enjoy your travels abroad, your account continues to grow. Moreover, the benefits may include airport lounge access in both domestic and international airports, reward points on overseas transactions, and more. Thus, you earn while you spend with top-notch international credit or debit cards.
Traveling with a single card instead of physical money is much safer for students studying abroad. In addition, the best international travel cards also come with top-tier premium security features that make handling money in an alien environment all the safer. For instance, lock/unlock/block card options are the quintessential aspects of almost every international card. For enhanced safety, you can temporarily block the entire card or individual transaction methods, such as ATM withdrawals, card swipes, etc.
Likewise, some international credit cards are equipped with the ultra-high-tech chip-and-pin feature, which helps the cardholder overcome a situation where they are stuck at an unattended kiosk, unable to use the card because it requires a PIN to complete the transaction. The chip-and-pin feature means you first "dip" the card into the reader, then insert the PIN. The technology provides additional security and cuts down on swindles, as scammers cannot use a card without the associated PIN.
All-round Merchant Acceptance and Auto-conversion
The ideal international credit card lets you load INR before traveling or even while you are in a foreign land. Then, the auto-convert feature changes the INR amount into the local currency of the country you have landed in. After that, you can use the card for transactions. The primary benefit of using such international credit cards is that they are accepted by Visa or Mastercard, which accept merchants in as many as 150+ countries.
24/7 Support Services
The sixth benefit of using an international card is that many of them come with personalized services, such as assistance through the immigration queue, baggage assistance, and likewise. In addition, the 24/7 customer support ensures that the international student can ask for any account-related help at any time of the day.
Many international cards, especially premium travel cards, offer travel protections like travel insurance, auto rental collision damage waivers, lost luggage reimbursements, emergency evacuation, trip delay reimbursement, and more. Moreover, it might come as a surprise to many, but some international credit cards help you dabble in mutual fund investments at zero percent commission. Thus, you can choose to import your existing portfolio and start investing in mutual funds, stocks, ETFs, etc. at your own pace.
Lastly, the international cards benefit travelers and students studying abroad by offering adequate financial convenience abroad. Firstly, the best travel cards have easy and hassle-free onboarding. You should be able to open an account for your international debit or credit card quickly and in simple steps. In addition, when your travel card has an associated digital account, you have the liberty to use the account for online transactions immediately without waiting for the physical card to arrive.
Similarly, international cards have other features, such as in-app ATM locators, zero-balance savings accounts, zero fund transfer fees, and so forth, that make your travels abroad less challenging and more enjoyable. Although it is essential to note that not every international credit or debit card offers such ancillary benefits, it is best to research and find out which ones have the most merit and are compatible with your travel needs.
So, there we have itâ€”a comprehensive overview of the top eight benefits of using an international credit card.