You're all packed and gung-ho about your holiday abroad, but how are you going to pay for all your sundry expenses? If you are banking on cash and are worried about carrying it, check out the options that will serve you just as well, if not better.
Traveller's cheques, pre-paid travel cards and credit cards are more secure and convenient than cash. They can be replaced if they are lost or stolen, though you may have to pay a nominal replacement fee. Some cards also come with a lost card liability cover of up to Rs 2 lakh.
A traveller's cheque is a preprinted cheque of a required denomination, while a travel card is similar to an ATM-cum-debit card and is loaded with the required amount of foreign currency. You can also take along a credit card and make purchases within the sanctioned credit limit.
The cheques and cards are available at either a travel agent or a bank and you can choose from a range of denominations: a traveller's cheque can be had for a minimum denomination of 20 (for the currency of your choice), while a travel card is available for a minimum amount of 200 (of the currency). Of course, if you need cash, you can use your travel or credit card at an ATM to withdraw money. But be ready to shell out a hefty fee for withdrawal. For instance, the HDFC bank charges Rs 300 per transaction in addition to the 2.95% interest.
You don't have to splurge the entire sum on one trip. The balance can be utilised. You can either encash your travel card or cheque with the issuer within 90 days or even use it for future trips.
Modes Of Payment While Travelling | |||
|---|---|---|---|
Here is a comparison of the three options. It is best to go with a combination of all three. | |||
| Traveller's Cheques | Pre-paid Travel Cards | Credit Cards | |
| Usage | Encashed with banks, authorised money changers for a nominal fee. | Similar to debit card and can be used at any merchant establishment. | Any visa card or mastercard can be used globally. Check with your bank. |
| Availability | Issued by Thomas Cook, American Express, Citicorp & banks (HDFC, ICICI). | Issued by banks like ICICI, HDFC, Axis, Corporation, Citibank and Yes Bank. | Almost all banks issue credit cards. |
| Currencies | US dollar, pound, euro, Australian dollar, Canadian dollar, yen, franc, rand, riyal. | Can be loaded with currencies such as the US dollar, franc, euro and pound. | Not applicable. |
| Validity | The cheques are valid for as long as they are not encashed. | Valid for up to five years. | Usually valid for three years. Validity can be extended in certain cases. |
| Charges | Banks charge 1% commission on total amount. Thomas Cook charges less. | One-time issuance fee, which varies across banks; no transaction fee. | The fees vary across cards and issuers. |
| Replacement | Report the loss to issuer and new cheques are issued within 24 hours. | Replaced for unutilised balance; lost card liability cover up to Rs 2 lakh. | New card dispatched to the original mailing address; takes 7-15 days. |
| Add-on Insurance | No insurance; only lost traveller's cheques are replaced. | Cover against airline accident, flight delay, hijacking and loss of baggage. | Zero liability cover. If lost card is misused, there are no charges. |
