Be it a young graduate going to the University of South Dakota for a Masters, a middle-class family going on a short trip to Singapore with a ferry ride thrown in or a newly wed couple heading to Switzerland for their honeymoon, all now have a reason to smile. It’s a good time to be an Indian travelling abroad as the rupee has gained significantly over the uncrowned king of currencies— the US dollar.
Once your travel schedule is in place, complete with tickets, insurance and a shopping wish list, the next obvious thing that most people mull over is finance—specifically foreign exchange. So, what are the options? Cash, of course, is the first thing that comes to one’s mind, but there are limits imposed. An Indian citizen travelling abroad is entitled to carry up to $5,000 in any calendar year.
This qualifies as the basic travel quota that a person is entitled to irrespective of the reason of the visit—business, pleasure or both. Out of this total limit, however, only $2,000 can be carried as cash and the rest as traveller’s cheques or in any other form, including plastic cards.
Then there is the all important consideration of safety and acceptibility across different countries. The advent of plastic money and the 24-hour ATM kiosks have made foreign travel a lot simpler but made choosing the best money option to travel with more complicated.
Says Rajan Bhat, vice-president, traveller’s cheques, India, Australia, New Zealand and South Pacific, at American Express: “Each product has its own distinct advantages, but the traveller’s cheques are almost as good as currency since they are accepted in virtually every part of the world.” In addition they offer one key advantage over cash—in the event that cash is lost or stolen, it’s gone forever. However, traveller’s cheques can be easily refunded. American Express refunds lost traveller’s cheques usually within 24 hours.
But that’s not to say that one should depend exclusively on traveller’s cheques. The most frequent travellers vouch for a mix of financial instruments when travelling abroad. Says 28-year-old Pritam Patnaik, associate vice-president, Kotak Commodities Services, and an avid traveller: “I usually travel on work to South-east Asia a few times every year and find a mix of cash, traveller’s cheques and cards to use, depending on the nature of expense.”
This argument works well considering, the usage of each of these instruments is specific. For instance a taxi ride will work best with cash and not a card, likewise with plastic being a way of life in the US, it’s rare that anyone has enough cash for $500.
Though cash is the most preferred choice of transaction, it is also the least safe. It is in this context that traveller’s cheques gain ground. What’s more, these are available in nine different global currencies—the US dollar, Canadian dollar, British pound, Swiss franc, Australian dollar, Japanese yen, South African rand, Saudi riyal and euro. This makes a strong case for traveller’s cheques that come at a 1% commission when one is buying it. “This is a small fee to pay for a product which offers security and peace-of-mind during travel,” says Bhat.
Keep in mind that you can bargain for the best exchange rate while buying or redeeming traveller’s cheques. “There is an element of negotiation involved that you cannot expect with cards,” says Pritam. But your ability to haggle should not be the sole factor behind selecting traveller’s cheques.
In case you are thinking why bother with bulky cash and traveller’s cheques when there are enough and more plastic money options available, think again. Credit and debit cards are undeniably the most convenient to carry but they come with limitations. The biggest disadvantage is that you can never be sure of the exchange rate slapped on you because of the fluctuations in rates between the time of swiping the card and the time the statement is sent to you.
In addition, there are huge crosscurrency charges of up to 7% when converted from rupees to the local foreign currency—for instance, if you swipe a card in Korea, you first pay up to 3.5% on conversion from rupees to dollars and then another 3.5% on converting the dollar to Korean won. And this applies to every transaction. In case of ATM transactions, one lands up paying a fixed charge on the amount withdrawn every time as ATM usage charge, which starts at $1. The prepaid travel cards, which act as a payas-you-go debit card, too aren’t without caveats—the biggest being the heavy fees involved and that not all cards allow internet top-ups.
The main pitfall in relying exclusively on your cards is that if they get stolen, you are effectively stranded. Not only will you not get a replacement card any time soon, but blocking the card to avoid fraudulent transations is likely to cost you a pretty bundle in terms of long-distance telephone charges. But credit and debit cards are certainly useful for unplanned big-ticket shopping or paying large bills.
For everything else, there is the ubiquitous traveller’s cheque since it is it widely accepted everywhere, be it at airports, malls, hotels and tourist venues. Even small merchant establishments will, more often than not, accept them and return the balance to you in cash.
Furthermore, in case one is travelling across countries with different currencies, the loss on conversions from one currency to another can throw your travel budget off course. So, instead of relying on usurious money-changers at every port, you can change your money into all the currencies you plan to use even before you begin travelling with the wide-ranging traveller’s cheques option. This means you don’t lose on the exchange rates.
The bottomline: the key is to understanding the fine print when it comes to carrying forex and then zeroing on your ideal money mix.
UNCOMMON PLACES, THE AFFORDABLE WAY
The destination: Nubra Valley, Ladakh
Why go there: To understand the true definition of the words “middle of nowhere”. Most tourists actually heading to Ladakh limit their sightseeing to Leh. That’s a bad idea because the best of Ladakh lies in far-flung places, Nubra being just one of them. And the journey there is just as exciting, going through the world’s highest motorable road at Khardong-la at 18,380 ft. You can only visit Nubra Valley between June and August; the roads are closed for the rest of the year.
Where to stay: The best place to stay is in your own tent in the campsite near Sumur or Tegar villages. Alternative, there are several guest houses and low-budget hotels available in Diskit and Hunder villages.
Don’t miss: The chance to ride the unique double-humped camels in the high-altitude desert in Nubra. It’s not your regular Jaisalmer safari.
How to get there: It’s a seven-hour drive from Leh, the capital. But if you suffer from altitude sickness then it’s best to give Ladakh a miss.
Damage to the wallet: A night stay is likely to cost anything between Rs 500 and Rs 3,500 depending on your choice of accommodation.
With Sushmita Choudhury
