Cash or Card?

Don't flout the forex law on your overseas trip. Have a judicious mix of payment options with you.

Pritam P Hans        Print Edition: April 2011

Travelling to a foreign country requires better planning, especially in terms of carrying money and having access to funds during overseas stay. Should you carry all your money in a handbag, carry traveller's cheques or use your credit card? What are the rules that need to be followed when carrying money across the border?

The movement of money across the Indian border is governed by the Foreign Exchange Management Act. For private visits, other than to Nepal and Bhutan, you can carry up to $10,000 during any financial year. Business travellers can avail of foreign exchange up to $25,000 per visit. No foreign exchange is allowed for trips to Nepal and Bhutan, but you can carry any amount of cash in Indian rupees in denomination of Rs 100 or less. When travelling to other countries, you can carry Indian currency up to Rs 7,500.

Travellers are allowed to purchase foreign currency notes and coins only up to $ 3,000 or its equivalent. The balance $7,000 can be carried in the form of travellers cheque or banker's draft. However, travellers going to Iraq and Libya can buy up to $5,000 in form foreign currency. When visiting Iran, Russian Federation and other republics of the Commonwealth of Independent States, you can carry the entire $10,000 in the form of foreign currency notes and coins. You can get foreign exchange up to 60 days in advance. If you don't spend the entire foreign exchange within 60 days, you will have to surrender it to an authorised dealer/bank. However, you can retain foreign exchange up to $2,000 in the form of foreign currency or travellers cheques. You cannot afford to ignore your funds or payment options during your trip.

You need to keep your travel money as credit and debit cards, travellers cheques and cash to avoid any inconvenience if any of these payment channels gets disrupted or if you lose your card or cash. Credit cards are ubiquitous and convenient, but a lost card means you might not get a new one till you return home.

Debit cards offer the convenience of withdrawing money from ATMs, but transaction fees can be hefty. Travellers cheques, which don't have any expiry date, allow you to hedge against the risk of disruption in online payment systems. Lost travellers cheques can be replaced within a day or two.

You need to keep some amount of money in local currency for petty payments. However, don't carry a huge amount in paper currencies and coins. You risk losing your purse. Don't forget to keep some money in domestic currency for your trip back home.

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