How much is forex charges on sbi credit card? How to calculate

How Much is Forex Charges on SBI Credit Card? How to Calculate

Introduction

For travelers and online shoppers using SBI Credit Cards for international transactions, understanding forex charges on SBI credit card is crucial. Whether you are making a purchase abroad, booking international flights, or shopping on a foreign website, SBI imposes certain charges on foreign currency transactions. In this detailed guide, we will cover how much forex charges are on SBI credit cards, how to calculate them, and ways to minimize these costs.

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What is a Forex Charge on SBI Credit Card?

A forex charge on SBI credit card refers to the fee applied when a cardholder makes a transaction in a currency other than Indian Rupees (INR). This fee includes:

• Foreign Currency Markup Fee

• Currency Conversion Charges

• GST on Forex Charges

Understanding these charges helps in managing expenses better and avoiding unnecessary costs.

Forex Charges on SBI Credit Card: Breakdown

SBI credit cards impose forex charges based on the type of transaction and the currency involved. Below is a detailed breakdown:

1. Foreign Currency Markup Fee

• SBI generally charges 3.5% of the transaction amount as a markup fee.

• This is applicable to all foreign currency transactions, including international POS (Point of Sale) and online payments.

2. Currency Conversion Charges

• Transactions are converted from the foreign currency to INR based on Visa/Mastercard exchange rates.

• These rates fluctuate daily, impacting the final billing amount.

3. GST on Forex Charges

• A GST of 18% is levied on the foreign currency markup fee.

• This increases the total forex charge.

How to Calculate Forex Charges on SBI Credit Card?

To calculate forex charges on SBI credit card, use the following formula:

Total Amount Payable = (Transaction Amount in Foreign Currency * Exchange Rate) + (Markup Fee) + (GST on Markup Fee)

Example Calculation:

Suppose you make a transaction of USD 100 using your SBI credit card, and the exchange rate is INR 83 per USD.

1. Transaction Amount in INR: 100 × 83 = INR 8,300

2. Markup Fee (3.5%): (8,300 × 3.5%) = INR 290.50

3. GST on Markup Fee (18%): (290.50 × 18%) = INR 52.29

4. Total Payable Amount: INR 8,300 + 290.50 + 52.29 = INR 8,642.79

Thus, for a USD 100 transaction, you will be charged approximately INR 8,642.79.

How to Minimize Forex Charges on SBI Credit Card?

While forex charges on SBI credit card are unavoidable, you can reduce them using the following strategies:

1. Choose a Low Forex Markup SBI Credit Card

• Some SBI credit cards offer lower forex markup fees, such as SBI Elite Card (1.99%).

2. Use Forex Prepaid Cards

• SBI offers Multi-Currency Forex Cards, which often have lower forex charges than credit cards.

3. Pay in INR Whenever Possible

• While making international online purchases, check if INR payment is available to avoid currency conversion fees.

4. Monitor Exchange Rates

• Keeping an eye on exchange rates can help you decide when to make international transactions at favorable rates.

5. Use Cards with Cashback or Reward Points

• Some SBI credit cards offer cashback or reward points that can offset forex charges.

Frequently Asked Questions (FAQs)

1. What is the forex markup fee on SBI SimplyCLICK Credit Card?

• The forex markup fee on the SBI SimplyCLICK Credit Card is 3.5% of the transaction amount.

2. Does SBI charge forex fees on domestic transactions?

• No, forex charges are only applicable to transactions made in foreign currencies.

3. Can I avoid forex charges on SBI credit cards?

• You can minimize, but not entirely avoid forex charges unless you use an SBI forex card or an INR-denominated transaction.

4. Which SBI credit card has the lowest forex markup fee?

• The SBI Elite Credit Card has a lower forex markup fee of 1.99%.

5. Are forex charges refundable?

• Forex charges are non-refundable unless the transaction is reversed or disputed successfully.

Conclusion

Understanding forex charges on SBI credit cards is crucial for international travelers and shoppers. By knowing the markup fees, currency conversion charges, and GST applicable, you can accurately estimate your expenses and plan your transactions wisely. Additionally, using SBI credit cards with low forex markup fees, forex prepaid cards, or INR-based transactions can help you minimize these charges.

Next time you use your SBI credit card for foreign transactions, keep these calculations and tips in mind to save money!

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