Forex Markup on Credit Cards

What is the forex markup on a credit card?

Two conversions happen when you swipe abroad. First the card network — Visa, Mastercard, RuPay or Amex — converts the foreign currency into rupees at its own wholesale rate for that day. Then your issuing bank adds a percentage on top. That second percentage is the forex markup, and it is the bank’s charge, not the network’s.

The markup is a fee for a service, so GST at 18% applies to the fee. It does not apply to your spend. On a 3.5% card, the real cost is 3.5% × 1.18, which is 4.13% of what you spent. Every figure below is quoted that way, all-in.

Which credit cards charge the lowest forex markup?

These are the markups on the 16 cards we track, taken from issuer rate cards as of 15 August 2026. The last column is what ₹1,00,000 of overseas spending actually costs in charges, with GST included.

Source: issuer rate cards, as of 15 August 2026. Annual fees are the published fees before any spend-based waiver and before GST. Markups change without much notice, so check the schedule of charges before a trip.

The gap compounds fast. Spend ₹20,00,000 abroad over a few years on a 3.5% card and you pay ₹82,600 in markup and GST. On a 2% card you pay ₹47,200. That is ₹35,400 of difference for the same purchases. Our forex markup calculator runs the same maths on your own numbers, and the best forex credit cards page lists what else those cards give you.

Is a zero forex markup card always the best choice?

No. A zero-markup card still has to make money somewhere. It usually does so through reward clawbacks, spend conditions, or a weaker rewards rate on everyday domestic spending. We hold the markup figure and the fee, not the full terms of every offer. Read the issuer’s own schedule of charges before you switch a card for one number.

The other trap is the annual fee. A 2% markup on a ₹12,500 card saves ₹1,770 per ₹1,00,000 against a 3.5% card. You need to spend roughly ₹7,00,000 abroad in a year before that saving covers the fee alone. For most travellers a free or low-fee card with a 2% markup is the better answer.

What is dynamic currency conversion, and why decline it?

Dynamic currency conversion, or DCC, is the offer you get at a foreign terminal or checkout: “pay in INR?” It sounds helpful. It is the most expensive button on the machine.

Choose INR and the merchant’s payment provider does the conversion, not your card network. That provider picks its own exchange rate and takes its own margin, which is frequently far worse than the network rate. Worse, many Indian issuers still treat the transaction as an overseas one and levy their forex markup anyway. You can end up paying two margins on the same purchase.

The rule is simple. Always pay in the local currency of the country you are standing in. If a terminal has already converted, ask for the transaction to be cancelled and rerun. Online, the same choice hides in the currency selector at checkout. We cover the mechanics in more depth on dynamic currency conversion.

Is TCS charged when you swipe your credit card abroad?

No — not on a card used while you are overseas. The Ministry of Finance said so on 28 June 2023. It postponed the gazette notification that would have brought international credit cards under LRS. Its words: “transactions through International Credit Cards while being overseas would not be counted as LRS and hence would not be subject to TCS.”

We found no later notification reversing that. Treat it as the position, not a guarantee, and check with your bank before a very large spend.

TCS still applies to money you actually remit. Resident individuals may remit up to USD 2,50,000 per financial year under the RBI’s Liberalised Remittance Scheme. The threshold for TCS was raised from ₹7 lakh to ₹10 lakh in the Union Budget 2025-26. The Union Budget 2026-27, presented on 1 February 2026, set the rates as follows.

Source: PIB, Union Budget 2026-27 direct tax proposals, 1 February 2026. The education and medical rate was cut from 5% to 2% there. The older 0.5% rate for loan-funded education remittances is not listed in that release, so we do not quote it. Confirm the rate with your bank before you remit.

TCS is not a tax you lose. It is credited against your income tax and refundable. It is still cash out of your account on the day. Our TCS on remittance calculator and the LRS and TCS rules page work through the detail.

When a forex card or cash beats a credit card

A prepaid forex card locks the rate on the day you load it. That removes rate risk over a long trip, and load margins are often below 3.5%. The trade-off is reload friction, an issuance fee, and unspent balance you have to convert back at a second margin.

Cash carries the worst spread at airport counters and the best at a good city dealer. Credit cards win on fraud protection, on refunds, and on rewards. Most travellers should carry a low-markup credit card as the primary and a small cash float as backup. The full comparison sits on forex card vs credit card vs cash, and the other charges on your card are listed under credit card charges.