Play Now, Pay at Ease

Here are some payment options listed for the summer vacation

 With summer vacations set to begin soon, many people are busy drawing up detailed travel plans. After all, traveling — especially to international destinations — calls for meticulous planning. While flight booking, closing deals with tour operators, packing their bags, etc, dominate travelers’ plans, it is important to pay equal attention to other aspects such as zeroing in on the best tool for managing expenses abroad.

An Indian traveler embarking on an overseas leisure trip is allowed to spend 4,00,000 Rs or the equivalent amount in the respective currency per calendar year. S/he can carry 80,000 Rs in cash and the rest in the form of traveler’s cheques or cards. For a business traveler, the cap is 10,00,000 per trip or its equivalent in any other currency. Students and travelers going abroad for medical treatment, however, are allowed to spend 40, 00,000 per academic year and 40, 00,000 per trip, respectively.

Traveler’s cheques

While plastic money is becoming increasingly popular among travelers, the good old traveler’s cheque hasn’t been completely sidelined. The key reason why it continues to be in demand is that it is a trusted and a secure method of carrying money as against hard cash. In addition, it boasts of considerable acceptability worldwide. In case it is lost, the holder is entitled to a complete reimbursement, after following the requisite procedure. If the traveler’s cheque is encashed at an American Express branch, a Thomas Cook outlet or an Amex-authorized moneychanger, the transaction may not attract any commission, or nominal charges could be levied.

 If the traveler’s cheque is encashed at American Express branches and fee-free encashment centres, no charge would be levied. If the traveler gets it encashed at a money changing firm that is not registered with Amex, commissions varying from 3% to 12% (depending on various factors) could come into play.

  The traveler’s cheque comes with certain limitations, though. The primary disadvantage is that unlike plastic money, it can’t be used throughout the day. Once the money changers down the shutters for the day, it cannot be encashed. Besides, to put it into use, the traveler may need to carry his/her passport for identification purposes.

Credit & debit cards

And this is precisely the area where plastic tools score over the traditional method. Credit cards and debit cards offer the convenience of round-the clock usage. Apart from making purchases by swiping these cards at merchant outlets, they can also be used to withdraw cash from ATMs.

  The convenience factor has resulted in travelers preferring plastic money to traveler’s cheques. While globally, both credit cards and debit cards are popular, Indian travelers seem to prefer credit cards. If cards used at certain ATMs are not covered by your card’s network, you might be charged for the same.

 The main drawback here seems to be the fact that the exchange rate prevailing on the day of using the cards would apply, which means you cannot be certain about the amount you would end up spending.

Pre-paid travel cards

This shortcoming associated with credit and debit cards leaves scope for pre-paid travel cards to step in. A pre-paid travel card is an electronic form of traveler’s cheque. It can be used either by swiping the same at various merchant outlets or the traveler can withdraw cash in local currency by using the PIN provided. Such cards are available in various currencies. Here, you would need to load the card with the amount you desire to spend abroad, in relevant currency.

  In addition to offering the convenience that credit/debit cards offer, the other advantage with prepaid cards is that the exchange rate prevailing on the day you buy the card is applicable throughout your trip. In the event of unfavorable currency fluctuations, you won’t take a hit because you would have loaded the card already.

For obtaining the card, the traveler would need to submit copies of passport, Form A2 and PAN/Form 60. The charges for loading the card could range from Rs 110 to Rs 150, depending on the bank. If you make withdrawals from ATMs, the charges would amount to one unit of the local currency. If you withdraw cash in currency different from the one your card is loaded with, a cross currency charge is levied.

Also, if you decide to extend your stay, you can reload the card after issuing instructions to deposit the required amount with the issuing bank. A re-load attracts a fee of Rs 55-100. The reactivation procedure usually does not consume more than a few hours. Also, like credit/debit cards, you can issue instructions directing the bank to block the card, in case it is lost. Upon your return, the issuing bank arranges for a refund of any unused balance on the card in Indian rupees. The options are aplenty. Take your pick!