Know What Happens When You Use International Credit Cards Abroad

But you may wonder how these cards work outside India, or what the best credit cards for international travel are.

The good news is that many credit card companies in India let you make international payments. However, it’s important to understand how your credit card company handles these payments and choose the best card for international transactions.

How does an International Credit Card work?

You can use a regular credit card only in India, but an international credit card works both in India and abroad. In the same way, some regular credit cards in India may offer international usage facilities. With an international credit card, you can make payments in foreign currencies, both online and while travelling abroad. 

Your credit card issuer charges a processing fee when you make a purchase outside India. These charges apply when you use foreign currency or make payments through a foreign bank. Here's how it works in simple terms:

• Banks charge a fee when you make a purchase in a foreign currency or through a foreign bank

• This fee is usually a percentage of the transaction amount. It usually covers the currency conversion cost

• Some banks charge a fixed fee for every international credit card transaction, no matter the amount

• In some cases, both a fixed fee and a percentage fee may apply together

Let’s calculate the foreign transaction fee with a different rate: 

• Transaction amount: ₹1,50,000

• Foreign transaction fee: 3%

• Fee calculation: ₹1,50,000 × 3% = ₹4,500

• Total cost: ₹1,50,000 + ₹4,500 = ₹1,54,500

So, with a 3% foreign transaction fee, your total expense would be ₹1,54,500.

Top Credit Cards for International Travel

Below are some of the best credit cards for international use, along with their international transaction markup fees and notable features:

Tips for Using an International Credit Card

Using your card overseas is simple if you follow these steps:

• Check International Access: Confirm that your card is activated for international use. Most Visa and Mastercard cards usually are.
  

• Look for Global Acceptance: Use cards with Visa or Mastercard logos, which work at most shops, hotels, and restaurants worldwide.
  

• Always Pay in Local Currency: When the machine asks, choose the local currency (like Dollars or Euros) instead of Rupees. Paying in Rupees often leads to poor exchange rates and higher costs.
  

Factors to Consider During Using an International Credit Card

Keep these costs in mind when using your credit card abroad:

• Foreign Transaction Fee: Banks charge 1% to 3% for converting foreign currency to Rupees. Opt for cards with lower fees to save on large purchases.

• Pay Your Bill in Full: Your international spending will appear in Rupees on your statement. Pay the full amount by the due date to avoid high interest.

• Avoid Cash Withdrawals: Don’t use your card at foreign ATMs, banks charge high fees, and interest starts immediately.

• Know Your Credit Limit: Ensure your available credit limit can cover international expenses, including hotel deposits and incidental charges.

• Inform Your Bank: Notify your card issuer before international travel to avoid transaction declines due to suspected fraud.
  

A good international credit card should be low-cost, offer rewards everywhere, and have low foreign transaction fees. It should also come with an app that makes managing your card easy when you're away from home. That, and much more, is exactly what makes the One Credit Card stand out. 

It’s lifetime free and works globally. It has low foreign transaction fees (1%), and the OneCard App helps you track spending, see exchange rates, manage security, and pay bills easily. With its innovative One Trip feature, you can use the budget planner to estimate costs based on your travel style, group size, and dates.

With 5x points on your top 2 spending categories, it’s perfect for both travellers and everyday use. Check it out and apply if it fits your needs!