Credit Card penetration in the country is real. Around 5.5% of the Indian population uses it. Most people apply for Credit Cards online for free and enjoy the perks.
People use Credit Cards as a secure gateway of payment for international transactions. But is it possible? Yes, it is. Let's delve deep into how to do international Credit Card transactions and more important facts related to the same.
Are international transactions possible through credit cards?
Yes, you can always use your Credit Cards for international transactions. However, you must track your expenses and check with the professionals before enabling your transactions.
You can enable international transactions for your Credit Card via net banking or mobile banking. You can open the banking app and check the Credit Card section. There, you can click on transactions and enable the online ones.
Apart from the app, consider consulting a bank representative to guide you through conducting transactions for Credit Cards online for free. You may ask if they provide the option to enable online transactions via WhatsApp. If there is such a system, then enabling international transactions will be extremely easy.
Which credit card to use for international transactions?
You can use your general Credit Card for international transactions. However, you must enable online transactions no matter which card you use. If you're planning an international online transaction, you should first check it.
An international transaction with your Credit Card will require you to pay GST, currency conversion, and foreign currency markup fees. Various premium and special travel Credit Cards allow you to do international transactions at an affordable rate. Such special Credit Cards are available to cardholders who frequently travel to foreign countries.
Benefits of credit card use for international transactions
Using your Credit Card for international transactions is beneficial. Some of the perks you can get for using your Kotak Credit Card for international transactions are as follows:
- With the international Credit Card, you will receive reward points for each purchase. This will help lower the overall spending limit. Although you need to pay the international transaction charges, the reward points you gain are worth it.
- If you are booking flight tickets and so on, you will receive discounts and rewards.
- When you make International transactions using your Credit Card, you have a higher chance of improving your credit score.
You must make the payments on time for international transactions with your Credit Card. This will help improve credit scores of 750 and above.
Must Read: Top Benefits Of Using A Secured Credit Card
Charges applicable to international transaction usage
If you are doing international Credit Card transactions, various charges will be applicable. You should be paying these charges properly to avoid any penalties from the bank. If you get a penalty, it will affect your credit score.
- Here are some of the prominent charges applicable to international transaction usage:
- All the online transactions you make in foreign currencies.
- Using your Credit Card abroad to make any withdrawals.
- Using the Credit Card for transactions outside the Indian territory.
- Using the Credit Card to transact with a PoS machine linked to an international account.
For every international transaction you make using your Credit Card, you must pay 18% GST. The GST rate is the standard rate you will have to pay. The bank may add some extra charges, so it is better to consult with the bank before making the transaction.
What are the international transaction charges?
The international transaction charge will be levied on you by the Credit Card issuer when you make an international transaction. It generally involves conversion to an international currency. Apart from that, if you make any transaction involving a foreign financial institution, the bank will consider it an international transaction. As a result, you will have to make the payment accordingly.
The international transaction charges will often vary depending on your Credit Card type. If you have a MasterCard Credit Card or Visa Credit Card, the international transaction rate will generally be around 1%. On average, the currency markup fee is around 3.5% for international transactions. When GST is levied on the same, it can amount to around 4%. In some cases, the transaction will eventually be higher.
When you're making an international transaction, you will be notified about the charges you must pay. So, note it to avoid any penalties on your Credit Card.
Must Read: Difference Between RuPay & Visa Credit Cards
How to avoid international transaction charges?
In some cases, international transaction charges can become very high and inconvenient. So, there are specific ways through which you can avoid international transaction charges. These include:
- Check the exchange rates: The international currency exchange rates often keep fluctuating. If you plan to make an international transaction, you can keep a check on these exchange rates and initiate it only when the rates are favourable.
- Read your card policies: You should never make any foreign transaction if you aren't aware of the card policies. It is advisable to read through the policies, understand the rates, and make the transactions.
- Use a no foreign transaction fee Credit Card: Some Credit Cards provide the benefit of no foreign transaction fee. Thus, you can use those to avoid the higher charges.
Conclusion
Credit Cards have provided the benefit of easily doing international and domestic transactions. They are also a secure mode of payment, which protects against any negative impact. Now, it has become easy to apply for Credit Cards online, and using them smartly while making international transactions is advisable to prevent extra charges.
It is advisable to use a Credit Card, which is accepted globally, to enjoy the perks. You can always inform your respective bank if you ever face international transaction challenges.
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