If you’ve ever popped your international credit or debit card into an overseas ATM, you know it hurts. The message: “you’ll be charged 25362 USD as foreign transaction fee” is no secret to frequent international travellers. As a digital nomad, managing currency conversions and various fees on foreign expenses is extremely crucial. You might be spending a long time in a new country and throwing away money over this is not ideal. So if you are planning on visiting India and thinking about ways to save money on foreign transactions, this guide is power-packed with tips. Make your next workation in India even more fun by hacking through bank rules and conversion fees!
Hacks to save on foreign transaction fees when travelling to India
India is one of the many countries that do not accept card payments everywhere. Vendors usually take cash and or UPI payments. So if you aren’t prepared, you might find yourself struggling to buy things. The digital nomads at NomadGao love to chip in their experiences around everything travel and remote work. Through their inputs on credit cards and debit cards, these hacks will make travelling to India feel like smooth sailing for a digital nomad like you.
The 50-30-20 rule
Plenty of travel influencers recommend that you divide your money into cash and forex (prepaid debit) card in a ratio of 30-70. However, keep in mind that you can always run out of money on your forex card (or a prepaid debit card) or it might expire before your trip is over. Different banks have different rules and limitations on forex cards and how they work overseas. If you are unfamiliar with forex/prepaid debit cards, CaxtonFX, FairFX and Revolut are some internationally recognised prepaid debit card service providers. Keep in mind to do your research before you pick one.
The best thing about prepaid cards is that you can avoid the transaction and ever-changing conversion fees. So ideally, keep 50% of your money in converted cash, 30% in a forex card and the remaining 20% in a spare debit card. Have a credit card on you in case of emergencies and earn points on your travels.
Don't exchange money at airports
Airports know that the only reason you are there asking to exchange currency is that you need it. So they don’t shy away from charging about 10-15% extra on the normal conversion rates. Don’t land at an airport in India and exchange your currency there. Get it done in your home country and travel with plenty of cash in hand. Moreover, do it well in advance because you never know how much the exchange rates can fluctuate.
As they say, “the best time is now”. If you aren’t keen on carrying too much cash, you can also get a prepaid wallet at the airport in India for contactless payments.
Alternate international banking services
If in any case opening a bank account in India does not work for you, you can consider Wise and Revolut. These financial technology services are beneficial for digital nomads in the long run, especially if you are an American or European citizen. You can make an account, avail of a debit card and send money without being charged too much. Moreover, these accounts can be opened online. That said, there is always a possibility that your debit card may not work in some Indian outlets.
Open an NRO account in India
International digital nomads travelling to India can open an NRO account in any bank in India. You can then use a currency transfer app such as Wise or Revolut to deposit your money. This way, you get to benefit from lower currency exchange rates and spend without worrying about your international cards not working.
According to the RBI, “NRO account (current/savings) can be opened by a foreign national of non-Indian origin visiting India, with funds remitted from outside India through banking channel or by the sale of foreign exchange brought by him to India. The balance in the NRO account may be converted by the authorized dealer into foreign currency for payment to the account holder at the time of his departure from India provided the account has been maintained for a period not exceeding six months and the account has not been credited with any local funds, other than interest accrued thereon.”
The time taken to make an account may vary with different banks so consider getting into this only if you are planning to be in India for a while. Ideally, consider SBI or HDFC for safe and reliable service. At the same time, you might be taxed on the interest you earn and failure to pay the same might result in a fine.
Research your credit cards
Not all credit cards are designed for the traveller in you. Sometimes they charge hefty conversion fees that hurt your fantastic travel plans. So when you head out to get a travel-specific credit card which does not impose forex charges. It’s usually marked as ‘no F/X’ and allows you to truly enjoy your travels. Forex charges amount to about 3% of each transaction and this can save you a lot of money in the long run.
Pay in local currency
Not everyone knows this but most ATMs and card machines ask you whether you’d like to pay in conversion or the local currency. When you opt to pay in conversion, you end up paying a lot more than you need to – about twice or thrice the owed amount. So as a digital nomad in India, manage your finances better by opting to pay in the local currency.
Wondering how to avoid being fleeced of your money as a digital nomad? The biggest financial losses for international tourists in India happen through forex charges. The best part is that these damages can be minimised through careful planning and consideration. Pay attention to the fine print on your prepaid debit/forex cards and credit cards, open a local bank account in India or a multi-currency account and plan your finances well. Travelling to India can be a piece of cake if you can get your money management right!