Travel smart by choosing cashless travel

Travelling to exotic international destinations is fast becoming a regular and frequent activity in India. Be it the young working professional or the urbane moneyed urbane traveler, more and more Indians are discovering the benefits of economic progress: with money in the bank and a passport which opens up a world of opportunities.

A lot of attention needs to be paid to the entire process of planning a travel trip ranging from ensuring passport validity, seeking visas, flight tickets bookings and finding appropriate accommodation. One of the key decisions to be made is how to carry money while travelling abroad; sometimes the thought itself could weigh heavily on the mind. There are a range of options available and finding one suited to your needs is a critical step in the right direction.

One of the major concerns and questions, when traveling abroad, is how much cash you should carry; and the truth is that there is never a definite answer to that. While every need based expense (travel, food and accommodation) can be planned, there is no limit to what new and exciting souvenirs you could come across in that beautiful shop in Berne or that lovely dress in Paris which you just need to have! Being able to manage your non-discretionary expenses while accommodating your discretionary extravagances becomes key, and having the finances close at hand, to indulge yourself with the small extras, becomes critical. In the past, carrying foreign currency, stashed as bundles, was the norm. The Indian traveler would constantly be worried about its safety, worried sleepless, about theft or burglary.

There are many ways to access and use your money overseas. Many a seasoned traveler will advise you to wait until you get to your destination and use an ATM to withdraw money .There are others who will advise you to purchase your foreign currency in India itself, prior to your departure as you would be mentally comforted against fluctuating currency rates, as your currency purchase would be at a fixed conversion rate at the time of the conversion. Until a few years ago, foreign currency exchanged at an exchange-desk was the most preferred option, seemingly hassle free and trouble free as well.

As a tip from a consummate traveler, carrying cash and exchanging it at airports and hotels might not be the best idea, as foreign exchange rates at these locations would be typically higher than elsewhere. However, the convenience of these locations still makes it the preferred choice for many. It's often good to get some foreign currency before you leave for the journey so that you have cash at hand for your immediate expenses such as buying a meal at the airport, or taking a cab to your hotel. In that way, you need to carry only very little physical cash.

But for the major bit of your survival in a foreign locale, plastic money is an absolutely indispensable entry.

The advent of internationally accepted credit cards and debit cards has completely changed the way travelers carry money. In India the impact has been seen over the last two decades. Driven by simplicity of use, and the assurance of safety, Credit Cards have become the most extensively used payment option while traveling abroad.

Apart from credit and debit cards, there are multiple payment options available ranging from prepaid travel cards to multi-currency forex cards.

The emergence of prepaid cards has also made travel very safe and convenient. Many of these travel prepaid cards are launched in collaboration between banks and reputed travel agencies and portals. Typically you could load them with as much cash as you require and you could simply use them in the same manner as a credit or a debit card. All cards, whether debit, credit or prepaid typically protect you if you happen to lose them on a trip. All you need to do is to report it to your bank and the card gets blocked at your instruction. This ensures that any misuse is prevented. Travel prepaid cards typically come with added benefits pertaining to travel such as discounts on airfares, hotels and restaurant bills.

Leading credit card and debit card issuers also provide strong travel related benefits, typically during the holiday season and the astute traveler is able to ensure that she leverages all these offers to the maximum. Foreign exchange prepaid cards are favoured by many travelers while traveling overseas. The key reason to that the conversion rate for the purchase of foreign exchange is already fixed prior to the journey and the traveler need not be concerned with the daily fluctuation in currency rates. Some issuers of multi –currency foreign exchange cards provide superior benefits such as no mark-up charges and ATM withdrawal charges, which make the entire experience extremely value accretive to the customer. Finding the best service provider bank for the card you select is therefore critical to maximizing the value that you get for the assigned budget assigned for your holiday.

With the growth of the digital/plastic economy, India has made some significant strides towards becoming a “Cashless economy”. Having said that we sometimes still hear the story about a traveler who suffered as he did not have cash, as the local restaurant in the small town did not accept cards as a made of payment. The smart tip is to therefore to always ensure that you are not completely cashless while traveling either in India or overseas, especially in small towns or in rural areas. A little bit of cash in hand, still ensures peace of mind!

Cards are indeed the most convenient way of making payments. Finding a card which suits your needs, fits your temperament, and is geared to meet your spending requirements is critical. Ensuring that you maximize the value that you get from your cards is also very important. So before you begin your holiday, select a card that makes THAT big difference to your holiday. Have a great holiday this year!

The writer is head - retail unsecured assets at IndusInd Bank