Always keep in mind that using credit cards abroad attracts currency and network-based charges, such as markup fees or foreign currency transaction fee, etc.
While most credit cards issued in India are accepted across the globe, it does not mean that you should use them in any country without knowing the charges associated with it. Whether online or offline, always keep in mind that using credit cards abroad attracts currency and network-based charges, such as mark-up fees or foreign currency transaction fee, cash advance fees, which is charged as per the transaction’s value including the mark-up charges applicable, (Markup charge is basically the difference between the input cost and the final output cost which creates profit for the company. It is decided on the basis of a certain ratio which is calculated from the cost of a good or service and its selling price) etc., This process inculcates huge amount transactional charges overall. Therefore, it becomes necessary to keep a tab on your foreign currency mark-up fee, foreign transaction fee, and cash withdrawal charges when you use your credit card abroad.
Navin Chandani, CBDO, Bankbazaar.com said that while you do not have to pay any charges to use your card in the country it is issued, if used abroad, you would need to pay in the currency of that country. In this case, a conversion fee will be applicable. The network will automatically charge anywhere between 1-2% fee on foreign currency exchange and anything in excess will be a small margin of profit for the select bank if any.
“In addition, lenders also charge a foreign transaction charge. This can range from anywhere between 1.5 -3.5% of the total transaction. While this may not seem a lot for smaller transactions, for big ones these can run into thousands of rupees,” he said.
Cash withdrawals can also cost you anywhere between 1-4% fee in addition to the standard cash withdrawal rate for your Credit Card. So, it makes sense to carry cash or a travel card whose charges are muted compared to your card.