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Things you should be careful while making international transactions

You are looking forward to your international trip. After all, you have worked hard for it and have not taken a break in the past couple of months. You have worked out every detail including in-city travels and closest Indian restaurants. You are pepped up not only about sight-seeing but also about shopping. You are sure that your credit card will cover any extra expenses if you fall short on cash. However, you may still want to exercise caution about your budget if you are not aware of a few things about foreign transactions. Read on to understand the things you should be careful about.

• Foreign currency - It would be better to take your currency from a local forex agent before you set on to your travel. Foreign exchange kiosks at airports may not offer you a deal as good as you would get with a bank. You can compare the rates offered by different banks before you make your decision.

• Additional charges - Using your credit card overseas could incur some additional charges. Your credit card bill may differ vastly from your expectations if you are not aware of it. These charges arise mainly due to the costs of currency conversion. There are three types of charges.

1. Foreign Currency Conversion Fee - Your credit card transacts in Indian Rupee. Using it abroad can attract at a small fee when converting the INR into the desired currency. This fee ranges 1-2% of your transaction.

2. Foreign Transaction Fee - You have to pay this fee when your transaction passes through a foreign bank. You are charged with this fee if you swipe your credit card abroad or when you shop on an international website. This fee, charged by your bank, is regardless of the currency or the amount of your transaction. It is usually in the range of 2.5-3.5%.

3. Cash Advance Fee - Using your credit card to withdraw cash at ATMs can be expensive. You would have to pay additional charges if you use your credit card to withdraw cash in India. If you use it abroad, you pay the usual fee along with the international cash withdrawal fee. This fee is around 1-4%.

• Using debit cards at ATMs - You can use your debit cards to withdraw cash at foreign ATMs. The charges for using your debit card are generally lower than your credit card. You could find an ATM of the same network as that of your debit card. You can look at your debit card to know the network, which could be either VISA or MasterCard.

• Special cards - These days several banks offer travel cards that can be loaded with foreign currency. You need to deposit cash in INR and to load the card with an equivalent amount in foreign currency. This is a good option for one-time travel. If you travel frequently, you can opt for a credit card with negligible or no foreign transaction fee.

You can enjoy your foreign trip in the true sense if you are careful about these few things. This way you can avoid any after-trip shockers and remember your trip for all the right reasons.