IDFC FIRST Bank waives forex markup on its credit cards
What's the story
In a major customer-friendly move, IDFC FIRST Bank has announced the removal of forex markup charges on all its existing and new credit cards. The decision comes into effect immediately, meaning that current cardholders won't have to apply for a new card or upgrade their existing one to avail this benefit. Forex markup is an extra fee levied by card issuers for transactions made in foreign currencies.
Fee implications
Impact of forex markup on international transactions
The forex markup can significantly hike the cost of international spending, including travel purchases or payments for overseas subscriptions, software, and education services.
With IDFC FIRST Bank's new policy, cardholders will no longer have to pay this additional fee on their international transactions.
However, they will still earn rewards or cashback as per their individual card's features.
Cost reduction
How much customers used to pay earlier
To put it simply, a ₹1 lakh international transaction on a card with a 3.5% forex markup would attract a charge of ₹3,500.
GST on this markup would add another ₹630 to the total cost.
However, with IDFC FIRST Bank's zero forex markup policy, such additional charges won't be applicable for eligible transactions.
This could change how customers compare credit cards for overseas spending, and benefit those who frequently make international payments or transactions in foreign currencies.