Studying abroad? How prepaid forex cards help manage student expenses

Mint

2 days ago

Are you going abroad for studies? Then, a prepaid forex card, which is specially designed for students, will be a handy tool for managing your expenses. Prepaid forex cards for students come with a host of benefits including multi-currency features, locked-in exchange rates and lower transaction fee compared to regular debit and credit cards. Here is a guide on the features, benefits and what you should look for while getting prepaid forex cards.
A prepaid forex card for students is a convenient and secure way to carry foreign currency abroad. It offers features such as multi-currency support, locked-in exchange rates, and lower transaction fees than regular debit or credit cards.
'Prepaid forex cards provide multi-currency loading options, online tracking, secure chip-and-pin technology, easy reload functionality, and easy blocking in case of loss or theft,' says Ankit Mehra Co-Founder and CEO of GyanDhan, an NBFC (Non-Banking Finance Company) that has a tie-up with edtech firms. 'Additionally, forex cards lock in the loaded amount, protecting against currency fluctuations,' he says.
'These cards can be used for payments and ATM withdrawals globally. Many service providers offer student-friendly perks such as zero issuance fees, discounted rates, free international SIM cards, and travel insurance,' says Pavan Kavad, Managing Director, Prithvi Exchange, an RBI licensed forex dealer.
These cards are widely accepted at merchants and ATMs worldwide, making them an ideal choice for students studying abroad. They come with added benefits like expense tracking through mobile apps and instant card blocking in case of loss.
Prepaid forex credit cards are a smart choice for students studying abroad. They offer benefits such as global acceptance, online tracking, and easy reloads from India. They ensure safe, convenient payments and help manage foreign currency expenses efficiently.
Students should ensure that their forex card comes with ISIC (International Student Identity Card) as an additional benefit. ISIC provides access to thousands of discounts worldwide on travel, food, shopping and educational resources.
'Combining an ISIC with a forex card helps students save money on everyday expenses and enhances their international experience. Many banks and forex providers also offer combo deals that include both cards for extra savings and convenience,' Kavad says.
'Additionally, pairing a forex card with an ISIC card provides verified student status and also unlocks additional global discounts on travel, shopping, and entertainment, making the student's overseas experience more economical,' Mehra says. Mastercard is offering ISIC as a complementary benefit for all prepaid forex cardholders who are on its network in India.
Education finance consultants say that students should ideally load a prepaid forex card with enough funds to cover at least 3-6 months of expected expenses, including tuition fee, rent, and living costs. 'A typical initial load ranges from $3000 to $10,000, depending on the destination and the cost of living. Since forex cards are reloadable, students can top up funds as needed,' Kavad says.
'The load comes with a limit of $7500 daily, which is enough. So, students can load sufficient funds for the first couple of months, and then reload based on actual expenditure patterns,' Mehra says. Incidentally, students can transfer up to $250,000 per financial year for their studies abroad under RBI's 'Liberalised Remittance Scheme'.
Consultants say that prepaid forex cards can also be used for large payments such as tuition fees. 'Prepaid forex cards should not be limited to managing only routine expenses. While they are ideal for daily needs like groceries, transportation, and dining, they can also be used for larger payments,' Kavad says.
'However, for tuition fees, it's essential to check if the university accepts card payments. Otherwise, a wire transfer from an Indian bank might be required,' he says.
'Forex cards can safeguard the amount from exchange‐rate uncertainty. Thus, loading larger sums when rates are favourable can shield students from future volatility. Beyond daily expenses, preloading tuition fees in advance locks in favourable rates and minimizes exchange costs,' Mehra says.
Most banks issue prepaid forex cards to students who are more than 18 years old. There are banks that issue these cards to students above 12 years of age. In any case, the student should have secured admission in a foreign school/college/university to get the card. Here are the documents that you have to furnish to the bank for availing the card. Self-attested copy of valid passport
Self-attested copy of PAN card of the Applicant or Guardian (If the applicant is a major, PAN card of the applicant is mandatory. Additionally, if the forex card is funded by the Guardian, the PAN card copyof the Guardian is mandatory).
Self-attested copy of Appointment letter/ Admission letter/University Identity Card
Cancelled cheque/passbook copy
Self-attested copy of international travel ticket or visa (any one)
Copy of 'Passbook' or one year 'Account Statement', used for funding the forex card.
Self-attested copy of Form I-20 if the student is going to the US for higher studies. Form I-20, officially titled the 'Certificate of Eligibility for Non-Immigrant Student Status', is a crucial document for international students seeking to study in the US.
The signature of the 'Guardian' is required on the application form if the applicant is between 12 to 18 years old. The card will be activated only after complete verification of the KYC (Know Your Customer) documents.
Allirajan M is a journalist with over two decades of experience. He has worked with several leading media organisations in the country and has been writing on mutual funds for nearly 16 years.