Every time you swipe your regular card abroad, your bank quietly takes a cut, usually up to 5%, on top of the exchange rate. That charge has a name: forex markup. And for frequent international travellers, it adds up faster than most people realise. Let us help you determine which card is best suited to you as you explore a new country.
What does “zero forex markup” actually mean?
Before comparing the two card types, it helps to understand what you are actually paying for when you use a regular card abroad.
How markup fees quietly drain your travel budget
When you pay in a foreign currency, the conversion happens at an interbank exchange rate, the rate at which banks deal currencies amongst themselves. Most banks then layer a markup on top of that, typically up to 5%, sometimes higher. On a ₹5 lakh international trip, that can mean ₹10,000–₹17,500 in extra charges that never appear as a separate line item.
A zero forex markup debit card eliminates that additional charge. You pay at the live VISA or Mastercard rate, nothing more. The same applies to a credit card with zero forex markup; the card network rate is what you get, without the bank’s surcharge on top.
Merits and demerits of zero forex markup debit cards
A zero forex markup debit card is linked directly to your bank account, which helps you manage and spend money while travelling.
Pros of using a zero forex markup debit card
Spending your own money means no billing cycles, no minimum payment anxiety, and no risk of carrying forward interest. For travellers who prefer not to mix travel expenses with a revolving credit line, this is a clean arrangement.
A zero forex markup debit card also earns interest on the balance sitting in your linked savings account. Unlike a credit card, your money is not just parked; it is growing in the background while you travel.
Many zero forex markup debit card options, including those from Niyo, also work well for ATM withdrawals abroad. Niyo’s zero forex markup debit card, for instance, works across 180+ countries and lets you spend in 130+ currencies at live VISA exchange rates.
Cons of using a zero forex markup debit card
The most practical downside is liquidity. Your spending is limited to what sits in your account. If you encounter a situation abroad where you need extra funds, a security deposit, an emergency booking, or an unexpected expense, a debit card does not give you a buffer the way a credit card does.
Another limitation worth knowing: A zero forex markup debit card does not build your credit score. Every swipe is your own money, so there is no credit bureau reporting, no utilisation history, and no score improvement, something that matters if you are working toward a stronger credit profile over time.
Merits and demerits of zero forex markup credit cards
Let us understand the pros and cons pf travellers using zero forex markup credit cards:
Pros of using a zero forex markup credit card
The most obvious advantage is the spend-now, pay-later flexibility. A credit card absorbs the timing gap between when you pay abroad and when you actually settle. For travellers facing high upfront costs such as hotels, flights, or deposits, this matters.
Credit cards also typically offer better consumer protection on disputed transactions. If a merchant overcharges you or a booking falls through, chargeback mechanisms on credit cards tend to be more robust than on debit cards. Also, most hotels and rental car agencies abroad require a credit card on file to block deposits.
Some zero forex markup credit cards in India also carry reward programmes. For example, Niyo’s credit card options offer value-back on international online spends, domestic online transactions, and travel bookings made through their app, alongside zero joining fees and zero annual fees, an arrangement worth considering if you already travel frequently and want to turn those spends into meaningful rewards.
Currently, TCS (Tax Collected at Source) does not apply to transactions made using a credit card. This especially helps those expecting international transactions beyond the TCS-free limit (₹10 lakh for FY 2-26-27).
Cons of using a zero forex markup credit card
Discipline matters here. A credit card with zero forex markup still runs on credit, which means if you do not pay your full balance on time, interest charges and late fees accumulate. Those charges can exceed whatever you saved on forex markup.
ATM withdrawals on credit cards also attract cash advance fees and interest from the day of withdrawal; no interest-free period applies. This makes them a poor choice for cash transactions abroad, even if the forex markup is zero. To be honest, credit cards were never made for ATM withdrawals, anyway.
Which one should you actually carry?
For most Indian travellers, the answer is: both, or at least one of each type, depending on your trip.
A zero forex markup debit card works well for day-to-day spending, ATM withdrawals, and keeping costs predictable. A credit card with zero forex markup is better suited for larger transactions, hotel pre-authorisations, rental car booking deposits, and online bookings where chargeback protection matters.
If you are looking at a single-card solution, the choice depends on your spending habits. Cash-heavy destinations like parts of Southeast Asia or Japan lean towards debit. Mostly cashless trips through Europe or the US suit a credit card arrangement better.
For travellers who want both options under one roof, Niyo offers both debit and credit variants of its zero forex markup card, issued in partnerships with DCB Bank and SBM Bank. The cards come with zero joining fees, zero annual fees, complimentary international lounge access on qualifying spends, and a TCS-free limit tracker built into the app. It is worth checking it to see which variant fits your travel pattern.
Conclusion
The zero forex markup debit cards, as well as the zero forex markup credit cards, both solve the same core problem, eliminating the hidden cost of currency conversion. Where they differ is in liquidity, protection, and the discipline required to use them well. Neither is strictly better than the other. A debit card keeps you honest about your budget; a credit card with zero forex markup gives you flexibility, rewards, and better transaction protection.
For most travellers, carrying both and knowing when to use which is the practical approach. What matters most is dropping the standard markup card entirely before your next international trip.
