Why money transfer to India with credit card is expensive

It is quite convenient to send money from one country to another using a credit card. This is an effective option if you don’t have cash in your account but you have to send money for an emergency. Irrespective of the benefits of using a credit card for shopping or other purposes, using the card for remitting money internationally can be quite expensive.

It can carry some major hidden fees. There are many people who don’t even realize how much they are actually giving away as card processing fees when they make an international money transfer. In this article, we will be discussing why money transfer to India or any other country with the credit card is so expensive.

It is a known fact that credit card companies charge a high interest rate to consumers. However, there is one more way through which they earn money. They charge a high fee to the merchants from whom consumers buy goods or services. They charge multiple fees to the merchants whenever a transaction is placed. The first charge is a fixed fee that is taken just for having a merchant account. Then a percentage of the transaction is charged which comes to approximately 2% to 2.5%. Often, the credit card companies even charge an ‘enquiry fee’ of 20% to 35% on each transaction.

Due to these charges, money transfer agencies that offer credit card facility to consumers end up paying a high premium. It is a known fact that the fees of most money transfer agencies is already marked up. This means that if the remittance service provider is paying high fees on the merchant account for processing credit cards, this cost they will be passing to their customers at a significant mark up. When this is added to the costs associated with international transfers like bank processing fees and currency exchange rates, remittance becomes super expensive due to credit cards.

Cost-effective method to send money

If you have to send money back home on a monthly basis, using your credit card will prove highly expensive. This option can be used when there is an urgency to send funds but you don’t have cash in your account. If you need to send money on a regular basis and don’t want to burn a hole in your pocket, you can opt for online remittance services.

These services are easy to use and the money reaches the recipient quickly. You don’t have to stand in queues at the bank every month. All you need is a secure device such as your laptop or tablet and internet connection to initiate a transaction.

Online remittance agencies offer low transfer fee compared to the banks. Even their foreign currency exchange rate is competitive because they keep updating them at regular intervals. From India money exchange to transfer fee and customers service, check all details before selecting a money transfer service. This will help you ensure safe remittance.