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Credit Card
Pay like a local: Ways to save on foreign transaction fees with your credit card
Key Takeaways
When you use your credit card to pay in a foreign country, the merchant may give you the option to pay in your home currency instead of the foreign currency. This is called dynamic currency conversion (DCC).
- DCC can add significant charges to your transaction. To avoid these charges, always choose to pay in the local currency and decline the merchant's offer for DCC.
- Depending on your credit card, you may have to pay other fees, such as the foreign exchange markup fee. The Ashva and Mayura Credit Cards offer low forex markup fees, high rewards, and other benefits to make international transactions more affordable.
Planning a trip abroad? You might be considering carrying a credit card for your payments. Afterall, credit cards are widely accepted and have several benefits, such as the low risk of theft or loss and the ability to withdraw money from international ATMs during emergencies.
Keep in mind, however, that when using credit cards for international payments there are associated charges to consider. These include forex markup and DCC transaction fees, among others. It’s important to know what these are to help you make the right choice and avoid them whenever you can.
In this article, we’ll explore what DCC and forex markup charges are, so you know what to expect when you make your next payment in a foreign country.
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What is DCC?
DCC stands for dynamic currency conversion, which occurs when making international transactions in your home currency i.e. Indian Rupee (INR). While it may seem convenient, it has two major drawbacks. Firstly, you will incur additional DCC charges, increasing the cost of your purchases. Secondly, the exchange rate for DCC transactions is often unfavourable and higher than market rates. For these reasons, it is recommended to avoid DCC transactions.
Ways to avoid unwanted fees on international spends
Save money on transactions you make abroad by understanding and making smart choices. Follow these tips to avoid DCC charges:
1. Choose the local currency at POS terminals
Always choose to be charged in the local currency. For instance, if you are in the USA, pay in US Dollars, or if you are visiting France, choose Euro.
If you avoid converting your transactions to INR, you can avoid DCC and its related charges altogether.
2. Decline any offers to convert the currency
Merchants might offer you the option to pay in INR for your transactions. Always choose the local currency to avoid the dynamic currency conversion and save on costs. Additionally, check your receipts for any unexpected DCC fees to ensure your requests have been fulfilled.
3. Avoid DCC at ATM withdrawals
You might be prompted to pay in INR even when withdrawing money from an international ATM. Decline them to avoid DCC charges getting added to your transaction.
4. Choose low forex markup credit cards
In addition to DCC charges, there is a forex markup fee that applies when you make international payments with your Indian credit card. A low forex markup credit card, like the Ashva and Mayura Credit Cards by IDFC FIRST Bank, will help you save on this charge, reducing your overall travel expenses.
Cost-effective international payments with IDFC FIRST Bank Credit Cards
Saving money on foreign transactions is important when choosing a credit card. IDFC FIRST Bank offers two premium metal cards, the Ashva and Mayura Credit Cards, which are perfect for international travel. These cards provide many benefits for travellers, making them a great option for anyone planning a trip abroad.
Travel Benefits of the Ashva Credit Card
Here’s how the Ashva Credit Card can be your ideal travel partner:
- Low forex markup fee of 1%
- Four complimentary airport lounge visits domestically and twice internationally every quarter
- Free trip cancellation cover reimburses you for cancelling non-refundable flights and hotel accommodations. You get a cover of up to ₹25,000 for up to 2 claims every year
- You also get four complimentary railway lounge visits every quarter
- Complimentary travel insurance coverage worth $1200
Travel Benefits of the Mayura Credit Card
Mayura is another premium metal credit card which offers the following travel benefits –
- Zero forex markup fee
- Four complimentary airport lounge visits domestically and internationally. You also get one complimentary guest visit to domestic airport lounges once every quarter, which is included in the overall domestic lounge benefit.
- Free trip cancellation cover reimburses you for cancelling non-refundable flights and hotel accommodations. You get a cover of up to ₹50,000 for up to 2 claims every year
- You also get four complimentary railway lounge visits every quarter
- Complimentary travel insurance cover worth $1200
That’s not all! You also get attractive currency conversion rates, making international transactions cost-effective.
Smart tips for memorable travel experiences
Embark on exciting global adventures without breaking the bank. Say goodbye to hidden fees and unexpected charges by using these smart tips for foreign transactions. Our Ashva and Mayura Credit Cards offer competitive forex rates and amazing travel perks, helping you make the most of your international travel. Apply now and maximise the travel benefits, saving you money and making your trips more cost-effective.
Disclaimer
The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirst.bank.in for latest updates.
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