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Opting for virtual, forex cards can help in reducing risk of fraud



Consider this scenario: After carrying out online research, you have zeroed in on a suitable hotel at the tourist spot you wish to visit, but it is not a well-known one. Yet, it insists on an advance payment through your credit or debit card — details of which you are unwilling to share due to concerns over the site's reliability. At the same time, you are reluctant to let go of a money-saver deal. What is the way out of this dilemma? You should try the 'virtual' card tool, if your bank offers the facility.

On the other hand, if your travel destination happens to be located abroad, you can simply make use of forex travel cards. "Due to a limited balance on these preloaded cards, the damage due to any fraud is restricted to that amount," says Harshvardhan Roongta, certified financial planner, Roongta Securities.

Recently, the Reserve Bank of India (RBI) had reiterated that banks were allowed to issue rupee-denominated co-branded prepaid cards, without seeking permission from the central bank, unlike non-banking financial companies. In addition, last year, the regulator had allowed cash withdrawal of up to Rs 1,000 per day from prepaid cards, including gift cards, from point of sale (POS) terminals.

International Travel Cards

Travel cards have gained popularity in the last few years, with most public and private banks offering them. They are targeted at students, tourists and business travellers. "They can come to your aid while making payments online or at parking lots in your destination countries. Convenience is the key benefit," says Roongta. To sign up for a forex card, you can walk into a bank or a currency exchange firm to buy it and load the card with the required amount with the foreign currency of your choice. The issuance fee ranges from Rs 110 to Rs 150. Other charges include cash withdrawal fee at ATMs ($1.75-2) and cross-currency charges.