HSBC India offers zero forex markup on all credit cards — What this feature means for your travels abroad, explained
HSBC India is offering zero forex mark-up for across all its existing credit cards for Indian residents, for a period of one month from 15 August to 15 September, with aim to “provide better value for money to customers on international spending”.
“By introducing zero forex mark-up across all HSBC credit cards, we are ensuring customers can spend internationally with greater clarity and value, while continuing to enjoy the rewards and benefits that are already built on their cards,” said Sandeep Batra, Head of International Wealth and Premier Banking, HSBC India.
Which HSBC credit cards are included?
According to a press release from the lender, the offer is valid on all HSBC credit cards, including the:
Foreign currency mark-up fee, explained
Credit cards that are allowed for use in foreign countries are subject to extra fees known as the foreign currency mark-up fee. While this fee differs from card to card and among lenders, it usually ranges between 1-3% of the transaction amount. Choosing cards with low or no foreign transaction fees for international travel or shopping can save you extra cost on each transaction in a foreign country.
According to Paisabazaar, for a $30 item bought using your foreign transaction enabled credit card, on the bank’s end, the sum is converted into Indian rupees (as per the exchange rate on date of transaction) for calculation of fees. Assuming mark-up fee of 2% and that $1 is worth ₹90 at time of transaction, the calculation is as follows:
- Transaction amount = ₹2,700 ($30)
- Foreign currency mark-up fee = ₹54 (2% of transaction amount)
- Goods and services tax = ₹9.72 (18% on mark-up fee)
- Total value of transaction = ₹2,763.72 ($30.70)
You must keep in mind that credit cards have some of the highest interest rates among the various personal finance tools and have a slew of additional charges and fees attached. It is thus important to have a good idea of the full costs and risks involved and read the fine print carefully, especially in cases where the annual fees exceed the benefits or payoffs (cash back, vouchers, gifts, convenience, etc.).
