{"id":612,"date":"2026-08-19T11:27:47","date_gmt":"2026-08-19T11:27:47","guid":{"rendered":"https:\/\/great.cards\/blog\/?p=612"},"modified":"2026-08-19T11:27:48","modified_gmt":"2026-08-19T11:27:48","slug":"how-international-transactions-are-charged","status":"publish","type":"post","link":"https:\/\/great.cards\/blog\/how-international-transactions-are-charged\/612","title":{"rendered":"How International Transactions Are Charged on Credit Cards"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Ever wondered why the amount on your credit card statement is different from what you calculated using Google&#8217;s exchange rate?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That&#8217;s because an international transaction involves more than just a currency conversion. Between the payment network, your bank, forex markup, and GST, several steps determine the final amount you pay.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here&#8217;s how it works.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">TL;DR<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>International transactions are first charged in the merchant&#8217;s local currency.<\/li>\n\n\n\n<li>Visa, Mastercard, American Express, or RuPay convert the amount to INR using their own exchange rate.<\/li>\n\n\n\n<li>Your bank then adds a forex markup fee (unless your card has 0% forex markup).<\/li>\n\n\n\n<li>GST (18%) is charged only on the forex markup, not the entire transaction.<\/li>\n\n\n\n<li>The final amount may differ slightly from Google&#8217;s exchange rate due to settlement timing and network rates.<\/li>\n\n\n\n<li>When paying abroad, always choose the local currency instead of INR to avoid Dynamic Currency Conversion (DCC).<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">Step 1: You Pay in the Merchant&#8217;s Local Currency<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">When you use your credit card abroad or make a purchase from an international website, the merchant charges your card in their local currency.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">International transactions can be billed in many different currencies depending on where you&#8217;re shopping or travelling. Some of the most common ones include:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th class=\"has-text-align-center\" data-align=\"center\">Country\/Region<\/th><th class=\"has-text-align-center\" data-align=\"center\">Currency<\/th><th class=\"has-text-align-center\" data-align=\"center\">Currency Code<\/th><\/tr><\/thead><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\">United States<\/td><td class=\"has-text-align-center\" data-align=\"center\">US Dollar<\/td><td class=\"has-text-align-center\" data-align=\"center\">USD<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">United Kingdom<\/td><td class=\"has-text-align-center\" data-align=\"center\">Pound Sterling<\/td><td class=\"has-text-align-center\" data-align=\"center\">GBP<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Eurozone<\/td><td class=\"has-text-align-center\" data-align=\"center\">Euro<\/td><td class=\"has-text-align-center\" data-align=\"center\">EUR<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Japan<\/td><td class=\"has-text-align-center\" data-align=\"center\">Japanese Yen<\/td><td class=\"has-text-align-center\" data-align=\"center\">JPY<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Singapore<\/td><td class=\"has-text-align-center\" data-align=\"center\">Singapore Dollar<\/td><td class=\"has-text-align-center\" data-align=\"center\">SGD<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">United Arab Emirates<\/td><td class=\"has-text-align-center\" data-align=\"center\">UAE Dirham<\/td><td class=\"has-text-align-center\" data-align=\"center\">AED<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Australia<\/td><td class=\"has-text-align-center\" data-align=\"center\">Australian Dollar<\/td><td class=\"has-text-align-center\" data-align=\"center\">AUD<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Canada<\/td><td class=\"has-text-align-center\" data-align=\"center\">Canadian Dollar<\/td><td class=\"has-text-align-center\" data-align=\"center\">CAD<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Switzerland<\/td><td class=\"has-text-align-center\" data-align=\"center\">Swiss Franc<\/td><td class=\"has-text-align-center\" data-align=\"center\">CHF<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">Thailand<\/td><td class=\"has-text-align-center\" data-align=\"center\">Thai Baht<\/td><td class=\"has-text-align-center\" data-align=\"center\">THB<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">If you&#8217;re travelling abroad and the payment terminal asks whether you&#8217;d like to pay in INR, decline it. Always choose the local currency to avoid Dynamic Currency Conversion (DCC), which usually results in a worse exchange rate.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">Step 2: The Card Network Converts the Currency<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Once the transaction is authorised, your card network (Visa, Mastercard, American Express, or RuPay) converts the amount into Indian Rupees.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The exchange rate is based on the network&#8217;s own daily conversion rates, which may differ slightly from the mid-market rate shown on Google. The exact rate also depends on when the transaction is settled, not necessarily when you make the purchase.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\">Check the Network Exchange Rate<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Want to estimate how much an international transaction will cost before your bank adds its forex markup?<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Visa cards:<\/strong> Use the <a href=\"https:\/\/www.visa.co.in\/support\/consumer\/travel-support\/exchange-rate-calculator.html?utm_source=chatgpt.com\" target=\"_blank\" rel=\"noopener\">Visa Exchange Rate Calculator<\/a>.<\/li>\n\n\n\n<li><strong>Mastercard cards:<\/strong> Use the <a href=\"https:\/\/www.mastercard.com\/in\/en\/personal\/get-support\/currency-exchange-rate-converter.html?utm_source=chatgpt.com\" target=\"_blank\" rel=\"noopener\">Mastercard Currency Converter<\/a>.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">These tools show the exchange rates used by the card networks. Remember that your bank may still add a forex markup and applicable GST, so the final billed amount can be slightly higher.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">Step 3: Your Bank Applies a Forex Markup<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">After the amount is converted to INR, your card issuer adds a foreign currency markup fee.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This fee varies by card. Many entry-level credit cards charge around 3.5%, while premium travel cards may charge 2% or less. Some specialised travel credit cards even offer 0% forex markup.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">Step 4: GST is Added<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">GST is not charged on the entire transaction amount.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Instead, it is charged only on the forex markup fee. Currently, GST is levied at 18% on the markup amount.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">Example<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Let&#8217;s say you spend <strong>USD 100<\/strong> overseas.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Visa exchange rate: \u20b987\/USD<\/li>\n\n\n\n<li>Converted amount: \u20b98,700<\/li>\n\n\n\n<li>Forex markup (3.5%): \u20b9304.50<\/li>\n\n\n\n<li>GST on markup (18%): \u20b954.81<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Final amount billed: \u20b99,059.31<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">One Important Thing: Avoid DCC<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">When paying abroad, you may be given the option to pay in <strong>INR instead of the local currency<\/strong>. This is called Dynamic Currency Conversion (DCC).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With DCC, the merchant or payment provider converts the transaction to INR using its own exchange rate, which can include a significant markup. You should generally <strong>decline DCC and pay in the local currency<\/strong>, allowing your card network to handle the conversion instead.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For a detailed explanation, including examples and how DCC works, read our guide on <a href=\"https:\/\/great.cards\/blog\/dynamic-currency-conversion-explained\/376\">Dynamic Currency Conversion<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Rule of thumb:<\/strong> When abroad, choose <strong>USD, EUR, GBP, etc.<\/strong>, not INR.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">Why the Final Amount May Be Different<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Even if you check the exchange rate before making a purchase, your billed amount may differ slightly because:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Exchange rates fluctuate throughout the day.<\/li>\n\n\n\n<li>The transaction may settle a day or two after you make the purchase.<\/li>\n\n\n\n<li>Each card network has its own exchange rate.<\/li>\n\n\n\n<li>Your bank adds a forex markup.<\/li>\n\n\n\n<li>GST is applied to the markup.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">Online Transactions Follow the Same Process<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The same charging mechanism applies when paying for international services like:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>ChatGPT<\/li>\n\n\n\n<li>Netflix (if billed internationally)<\/li>\n\n\n\n<li>Google services<\/li>\n\n\n\n<li>Apple purchases<\/li>\n\n\n\n<li>Steam<\/li>\n\n\n\n<li>International hotel bookings<\/li>\n\n\n\n<li>Foreign e-commerce websites<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">As long as the payment is processed outside India or in a foreign currency, it is treated as an international transaction.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">How to Save Money on International Transactions<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Always pay in the local currency instead of INR.<\/li>\n\n\n\n<li>Use a credit card with low or zero forex markup.<\/li>\n\n\n\n<li>Compare forex markup fees before choosing a travel card.<\/li>\n\n\n\n<li>Don&#8217;t rely solely on Google&#8217;s exchange rate to estimate your final bill.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">Popular Cards for International spends<\/h2>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\">i) Zero Forex Markup Cards<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">These cards don&#8217;t charge a forex markup on eligible international transactions:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">a) <a href=\"https:\/\/great.cards\/credit-card-store\/scapia-credit-card\">Federal Bank Scapia Credit Card<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">b) <a href=\"https:\/\/great.cards\/credit-card-store\/ixigo-au-credit-card\">AU ixigo Credit Card<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">c) <a href=\"https:\/\/great.cards\/credit-card-store\/idfc-first-wow-credit-card\">IDFC FIRST WOW Credit Card<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">d) <a href=\"https:\/\/great.cards\/credit-card-store\/bob-uni-goldx-credit-card\">BoB Uni GoldX Credit Card<\/a><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">ii) Cards That Can Earn Positive Returns After Forex Markup<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">For cards that charge a forex markup, the actual cost is higher once <strong>18% GST on the markup<\/strong> is included. The effective forex cost can then be compared against the rewards earned.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">a) <a href=\"https:\/\/great.cards\/credit-card-store\/hdfc-infinia-credit-card\">HDFC Infinia Credit Card<\/a> \u2013 <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>3.3% Base Rewards + 1% Cashback<\/strong> (up to \u20b91,000 per statement cycle) via Global Value Program | <strong>Forex Markup: 2.36%<\/strong> (incl. GST)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">b) <a href=\"https:\/\/great.cards\/credit-card-store\/hdfc-diners-club-black-credit-card\">HDFC Diners Club Black Credit Card<\/a> \/ <a href=\"https:\/\/great.cards\/credit-card-store\/hdfc-diners-club-black-metal-credit-card\">Diners Club Black Metal Credit Card<\/a> \u2013 <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>3.3% Base Rewards + 1% Cashback<\/strong> (up to \u20b91,000 per statement cycle) via Global Value Program | <strong>Forex Markup: 2<\/strong>.<strong>36%<\/strong> (incl. GST)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">c) <a href=\"https:\/\/great.cards\/credit-card-store\/hsbc-premier-credit-card\">HSBC Premier Credit Card<\/a> \u2013 <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>3% Base Rewards<\/strong> | <strong>Forex Markup: 1.18% <\/strong>(incl. GST)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">d) <a href=\"https:\/\/great.cards\/credit-card-store\/bob-eterna-credit-card\">BoB Eterna Credit Card<\/a> &#8211;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><strong>3.75% Base Rewards<\/strong> | <strong>Forex Markup: 2.36% <\/strong>(incl. GST)<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">Frequently Asked Questions (FAQs)<\/h2>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-1786086233359\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>How are international transactions converted to INR?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Your card network converts the foreign currency to INR, after which your bank adds the applicable forex markup and GST.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1786086282267\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>Why is my billed amount different from Google&#8217;s exchange rate?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Google shows the mid-market rate, while card networks use their own exchange rates, which may also vary based on the settlement date.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1786086294743\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>What is a forex markup fee?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>It&#8217;s a fee charged by your bank on international transactions, usually as a percentage of the converted INR amount.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1786086452238\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>Is GST charged on the entire transaction?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>No. GST is charged only on the forex markup fee.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1786086458141\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>Should I pay in INR or the local currency abroad?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Always choose the local currency to avoid Dynamic Currency Conversion (DCC), which is usually more expensive.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1786086467189\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>Do online international purchases follow the same process?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Yes. Purchases from international websites and subscriptions are charged in the same way.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1786086477474\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>Can I avoid forex markup?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Yes. Some travel-focused credit cards offer low or 0% forex markup.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1786086487107\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>When is the exchange rate applied?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>The exchange rate used is typically the one applicable on the transaction&#8217;s settlement date, not necessarily the purchase date.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">Final Thoughts<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">An international transaction isn&#8217;t just a simple currency conversion. The final amount on your statement depends on the card network&#8217;s exchange rate, your bank&#8217;s forex markup, GST on the markup, and the settlement date.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Understanding how these charges work can help you estimate your costs more accurately and avoid paying more than necessary, especially when travelling or shopping internationally.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ever wondered why the amount on your credit card statement is different from what you calculated using Google&#8217;s exchange rate? [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":622,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[64],"tags":[],"class_list":["post-612","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured"],"_links":{"self":[{"href":"https:\/\/great.cards\/blog\/wp-json\/wp\/v2\/posts\/612","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/great.cards\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/great.cards\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/great.cards\/blog\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/great.cards\/blog\/wp-json\/wp\/v2\/comments?post=612"}],"version-history":[{"count":7,"href":"https:\/\/great.cards\/blog\/wp-json\/wp\/v2\/posts\/612\/revisions"}],"predecessor-version":[{"id":646,"href":"https:\/\/great.cards\/blog\/wp-json\/wp\/v2\/posts\/612\/revisions\/646"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/great.cards\/blog\/wp-json\/wp\/v2\/media\/622"}],"wp:attachment":[{"href":"https:\/\/great.cards\/blog\/wp-json\/wp\/v2\/media?parent=612"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/great.cards\/blog\/wp-json\/wp\/v2\/categories?post=612"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/great.cards\/blog\/wp-json\/wp\/v2\/tags?post=612"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}