For Indian travellers planning overseas spending of around ₹2 lakh, the choice between UPI International and credit cards involves more than convenience. According to reports from The Times of India, both payment methods have their advantages and limitations when used abroad. UPI International allows payments through Indian bank accounts at supported overseas merchants, while credit cards remain widely accepted globally.
Through UPI International, users can make payments at supported overseas merchants using their Indian bank accounts. As reported by The Times of India, the facility first needs to be enabled for the linked bank account in a supported UPI app. The system displays the amount in foreign currency as well as Indian rupees, along with the applicable exchange rate and charges before transaction confirmation. However, UPI acceptance remains limited to participating merchants and locations, making it unsuitable for complete replacement of credit cards on every overseas trip.
When Indian credit cards are used for foreign currency transactions, the card network converts the transaction to rupees, with the issuing bank adding a foreign currency markup. According to The Times of India, SBI Card currently charges 3.5% forex markup on many cards, while selected premium cards carry lower rates. For a ₹2 lakh purchase equivalent, this results in a forex fee of ₹7,000 plus 18% GST of ₹1,260, totaling approximately ₹8,260 in additional costs. At a lower 1.99% markup, the fee would be about ₹3,980 plus ₹4,696 GST, making the total additional cost around ₹8,676.
The AU Zenith+ Credit Card offers the most competitive forex rate at 0.99%, significantly reducing foreign transaction costs. As reported by The Times of India, on ₹2 lakh of spending during a family holiday abroad, a 3.5% markup costs ₹7,000 before GST, while the same spend at 0.99% costs only ₹1,980. This ₹5,020 gap alone covers the Zenith+ joining fee of ₹4,999. The card also provides 1 reward point for every ₹1 of value, 1,000 bonus points per statement cycle, annual Taj Epicure membership worth ₹5,000, and its fee is waived on ₹8 lakh of annual spend.
For the ₹2 lakh spending scenario, the total additional cost with credit cards is approximately ₹8,260, while UPI International's final cost depends on the displayed exchange rate and charges. As reported by The Times of India, if UPI's overall conversion cost is lower than the ₹8,260 card cost, it would be more economical. Low-forex credit cards offering 2% or lower markups can compete closely with UPI, particularly when combined with reward points and travel benefits. The practical approach involves comparing the final rupee amount shown by UPI with the card's forex markup before traveling, while carrying both methods provides backup when one payment method is not accepted. Domestic travellers may prefer the ixigo AU Credit Card at ₹999 (waived at ₹1 lakh spending) or the Altura at ₹199 for railway lounge access.
