Whether or not a forex credit card earns reward points on global transactions depends on the card type, the bank’s reward policy, and the forex markup fee charged on each overseas purchase. The actual value of the rewards you receive is also shaped by these factors.
Credit cards made for international use usually offer reward points on global transactions. However, the net value you get from these rewards depends on the fees charged for each foreign currency purchase.
How reward structures work in international transactions
Most credit cards in India earn reward points only on domestic spending. International transactions are treated differently. Some banks offer no rewards for foreign currency spending, while others offer higher rewards rates, especially on their premium, super-premium or travel-focused cards.
The determining factor is the card’s reward policy as stated in its Most Important Terms and Conditions (MITC), which specifies whether foreign spending qualifies and at what earn rate.
The forex markup fee and its impact on value
Most card issuers charge a forex markup fee of 1.5% to 3.5% on foreign currency transactions. This fee reduces the actual value of any reward points you earn on these purchases.
The table below shows how different markup rates affect the net outcome on a ?10,000 transaction, assuming a 1% reward earn rate:
| Forex markup rate | Markup fee charged | Reward value earned | Net outcome |
| 1.5% | Rs 150 | Rs 100 | -Rs 50 |
| 2.5% | Rs 250 | Rs 100 | -Rs 150 |
| 3.5% | Rs 350 | Rs 100 | -Rs 250 |
A zero-forex markup credit card eliminates this charge entirely, allowing the cardholder to retain the full value of reward points earned on every international transaction.
Dynamic currency conversion and reward implications
Dynamic currency conversion (DCC) happens when a merchant abroad charges the customer in Indian rupees instead of the local currency. When DCC is applied:
- The transaction may bypass the card’s international reward tier.
- It may be processed at the domestic earn rate instead.
- The exchange rate applied by the merchant is often less favorable than the card network rate.
Opting for local currency billing at the point of sale ensures that the card’s international reward structure applies correctly.
Which card types offer rewards on global spends
Not all cards give rewards for international spending in the same way. The following types usually offer reward points on foreign purchases:
- Travel credit cards with global reward programmes.
- Premium and super-premium cards with universal earn rates.
- Co-branded airline or hotel cards with international spend benefits.
- Zero forex markup credit cards with a broad reward structure.
Choosing a card for international use
Those who spend regularly in foreign currencies should evaluate cards based on the following criteria:
- Presence or absence of a forex markup fee.
- Reward earn rate on international transactions.
- Whether accelerated reward caps apply on a monthly or quarterly basis.
- Redemption flexibility across domestic and international loyalty programmes.
After checking these points, applicants can start the credit card apply online process through the issuer’s website or app, where they can see if they qualify and compare features before deciding.
Conclusion
Forex credit cards do earn reward points on global transactions, but the net value depends on the card’s reward policy, the forex markup rate, and how the transaction is processed.
Cards that combine a zero-markup structure with a competitive international earn rate deliver the best value for frequent travellers. Those yet to secure a suitable option can apply for a credit card online after reviewing the fee structure and reward policy.