According to Vivek Bagree, Chief Business Officer, Cards at Niyo, choosing the right card can save international travelers up to 12% in associated fees and charges on every international transaction and ATM cash advance cost. As reported by Mint, the savings can add up to a free trip every few years for frequent travelers. Bagree noted that the difference in cumulative costs is often larger than travelers realize, especially on high-value trips or for those who travel two or three times a year.
Forex markup represents the biggest cost differentiator, with most traditional credit cards charging 2-4% on every international transaction, plus GST applied on top. According to Mint's analysis, on a ₹50,000 overseas spend, a traditional credit card can add ₹1,000-₹2,000 in forex markup plus GST. On a ₹2 lakh family vacation, that becomes ₹4,000-₹8,000 in additional costs. Forex cards avoid this markup by letting travelers load foreign currency in advance and lock the rate, though travelers should factor in issuance fees, reload charges, encashment costs and cross-currency conversion fees.
ATM cash withdrawals represent another major cost that travelers often overlook. As reported by Mint, on a regular credit card, overseas ATM withdrawal typically attracts a 2.5-3.5% cash advance fee (subject to minimum), plus interest from day one until dues are paid. Withdrawing the equivalent of ₹20,000 in cash can therefore cost upwards of ₹1,200-₹1,600 in fees and finance charges alone. Forex cards and secured credit cards offer free international ATM withdrawals up to monthly limits, providing significant cost savings for frequent travelers.
The travel industry is experiencing a significant shift where perks and points that once rewarded loyalty are now priced to make money. Airlines and hotels are devaluing points and making upgrades increasingly expensive. Delta now sells most of its domestic first-class seats rather than handing them out as upgrades, compared with 2009 when only about 12% of domestic first-class seats were sold outright. In the first quarter of this year, Delta's premium-cabin ticket revenue reached $5.36 billion, just $41 million below what the main cabin brought in. Hyatt expanded its award chart from three to five price tiers in May, with top redemptions at priciest Category 8 hotels now running up to 75,000 points per night at peak, up from 45,000 previously.
Bagree emphasized that travelers should evaluate total costs including forex markup, GST, exchange rate spread, ATM cash withdrawal fees, reload or encashment fees, and applicable taxes rather than focusing on single line items. As reported by Mint, even a 2-4% difference compounds into meaningful savings over an international trip. He noted that forex and prepaid travel cards are ideal for budget-conscious travelers seeking exchange-rate certainty, while credit cards offer flexibility and rewards but are subject to higher fees and charges that can inflate bills significantly on international trips. Jimmy Yoon from point.me recommends earning transferable currencies such as American Express Membership Rewards to maintain flexibility and avoid locking miles into devaluing programs.
