1. Summary
  2. The prohibited transactions
  3. The penalty
  4. Reason to have an International Credit card
  5. Credit card foreign transaction fees
  6. The international chip and PIN


If a Credit card or a charge account credit holder it’s vital to grasp that there are bound international transactions/payments via your internationally enabled credit or charge account credit are prohibited as per Indian laws. As per the banking concern of Asian nation (RBI), a person having an internationally enabled Credit card or charge account credit isn’t allowed to create bound payments victimization the cardboard beneath the exchange Management Act, 1999 (FEMA) scan with the exchange Management (Current Account Transaction) Rules, 2000 (FEMA accounting Rules)

The prohibited transactions

Avinash Kumar Khard, Partner at DSK Legal, says, “Schedule I of the independent agency accounting Rules, and provides a listing of transactions that are prohibited. Further, these transactions cannot be undertaken victimization credit cards or debit cards.

“International credit cards and debit cards cannot be used for online or otherwise purchase of prohibited things like lottery tickets, illegal or verboten magazines, participation in sweepstakes, payment for call-back services, etc. since no drawl of exchange is permissible for such items/activities.”

The penalty

Usually, credit/debit card issue banks/non-banks advise their customers that such transactions via the cards are prohibited. If a client uses his/her Credit card for such prohibited transactions, then as per tally rules, the cardboard holder is going to be controlled liable and can be barred from holding the card, expressed SBI Card in its email.

Khard says, “If a person violates the independent agency accounting Rules, then such individual shall be vulnerable to a penalty beneath the independent agency. Such penalty quantity might go up to thrice the add concerned in such dispute.”

In several foreign countries, forex commerce merchants, casinos, hotels, and websites conspicuously advertise the above-named merchandise and services. To avail of these, the individual is usually asked to pay victimization their card – debit or Credit card. If movement abroad and are available across one in all these advertisements and are enticed by it, then turn over before you employ your credit/debit card.

Khard says, “FEMA accounting Rules apply to international transactions solely. Thus, people movement abroad ought to avoid victimization his/her international Credit card and charge account credit to avoid endeavor any prohibited transactions.”

Reason to have an International Credit card

An international Credit card is used in just about any place within the world. It’s a card that doesn’t charge foreign dealings fees and includes a world chip and PIN.

Not all cards that job within the U.S. work once you’re traveling internationally. A card you’ll use in Australia, Canada, Europe, Japan, North American nations et al. suggests that you won’t run into businesses that solely settle for specific forms of payments or bound currencies once you’re traveling.

If you wish to avoid the hassles of carrying money or traveler’s checks, obtaining stuck at a stall unable to end dealings, or paying foreign dealings fees for your purchases, a world Credit card may be a must-have.

Credit card foreign transaction fees

A foreign Credit card dealings fee may be a fee charged after you use your Credit card to create a payment in a very different country. It won’t to be referred to as an overseas currency conversion fee. It’s a fee more on to the sale as a result of you’re paying in a very foreign currency. Typically, foreign dealings fees are roughly third-dimensional of the entire value of the dealings. They’re additionally charged in U.S. dollars.

Foreign dealings fees are charged on differing kinds of transactions, as well as ATM withdrawals, edifice reservations, or maybe booking airline flights. The terms and conditions for foreign dealings fees are typically enclosed within the fine print of your Credit card card-holders agreement. Make certain you review your agreement therefore you perceive all rates and costs before victimization your card for purchases abroad.

The international chip and PIN

The international chip and PIN are a part of a system referred to as monetary unit Pay, Credit card MA, +0.35%, Visa V, +0.10%, or EMV chips. EMV chips started in Europe and are currently integrated into credit cards worldwide. The chip replaced the standard magnetic strip used on U.S. credit cards till recently. Several foreign merchants won’t settle for customary magnetic strip credit cards, as a result, the technology is taken into account as unsafe and noncurrent.

U.S. merchants that settle for magnetic stripe cards currently foot the liability of deceitful transactions wherever the Credit card Company foots if a chip card is employed.

The PIN, or personal number, may be a customary part of cards in Europe. The PIN associates a four-digit range with the cardboard to spot the cardholder’s legitimacy and authorize transactions usually at self-serve kiosks, price ticket booths, gas pumps, toll booths, and phone booths. Whereas uncommon, it’s helpful to induce a PIN for your international Credit card therefore you don’t end up at a self-serve stall unable to finish your purchase once traveling.