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What is a forex markup fee on a credit card?
Updated · CardKhoj Editorial Team
Short answer
A forex markup fee is a percentage your card issuer charges on any transaction in a foreign currency or with a merchant based outside India. Most Indian cards charge 3.5% plus 18% GST — about 4.13% in total. Premium travel cards charge around 2%, and some cards charge zero.
When the fee is charged
- Card payments while travelling abroad.
- Online purchases from international websites, even if you are in India.
- Payments to merchants billed from abroad, even when the price is shown in rupees (some subscriptions and app stores).
How much it costs
On ₹1,00,000 of foreign spending: 3.5% markup = ₹3,500, plus 18% GST on it = ₹630, so ₹4,130 in total. A 2% card would cost ₹2,360 — a saving of about ₹1,770.
How to reduce it
- Use a low-forex or zero-forex credit card for international spends.
- Consider a prepaid forex card for planned trips — it locks the exchange rate.
- Always pay in the local currency when a foreign shop or ATM offers to charge you in rupees. That “dynamic currency conversion” uses a poor rate and the markup is often still applied.
This answer is general information, not personalised financial or tax advice. Rules, rates and limits change — confirm with your bank, the RBI or a qualified adviser before making decisions.