Definition
The margin added to the exchange rate when you buy foreign currency or spend abroad on an Indian card. It is the gap between the interbank (mid-market) rate and the rate you actually get, plus any card fees and GST.
Where markups hide
- Cash from money changers: typically 1–3% over the interbank rate in the city, and 5–8% or more at airport counters.
- Forex cards: about 1–2.5% at loading, plus ATM fees abroad.
- Credit and debit cards: most Indian cards charge a 2–3.5% foreign currency markup, plus 18% GST on that markup, so 3.5% becomes 4.13%.
- Zero-markup cards: a few credit and fintech cards charge no markup and use the card network's rate, which is close to interbank.
- [Dynamic currency conversion](/glossary/dynamic-currency-conversion): 3–8%, the worst option.
There is also a small GST on buying currency itself: 0.18% of the amount, with a minimum of ₹45, for purchases up to ₹1 lakh.
Example
A Bengaluru family spends USD 3,000 (about ₹2.64 lakh at ₹88) on a two-week US holiday.
| Method | Approximate cost over interbank |
|---|---|
| Zero-markup card | ₹0–1,500 |
| Forex card | ₹2,500–6,500 |
| Regular credit card (3.5% plus GST) | about ₹10,900 |
| Airport cash counter | ₹13,000–21,000 |
Practical advice
- Check the interbank rate on a finance app before you buy, then compare quotes in rupees per unit.
- Buy forex in your city a few days ahead, not at the airport.
- Use a forex card or zero-markup card for most spending, and keep a little cash for taxis, tips and markets.
- Ask whether a quoted rate includes GST and service fees.
Ask our foreign exchange desk for a quote and compare it the same way.