Credit card issuers earn significant revenue from forex markup fees, and it’s encouraging to see SBI launching targeted offers for international travelers. The recent SBI promotion provides cashback on point-of-sale foreign currency transactions, which will appeal to cardholders who make in-person purchases abroad. However, this specific offer excludes online transactions, limiting its usefulness for many travelers. Details of the offer are outlined below.
1% Forex Markup Fee on International Transactions
- SBI waives 2.5% foreign currency conversion markup as cashback on foreign currency purchases made at retail stores (point-of-sale transactions).
- Maximum cashback per cardholder: INR 1,000.
- Offer period: 01 December 2016 to 31 January 2017 (both dates inclusive).
- Offer not applicable to SBI Card Signature and SBI Card Elite cardholders.
- Cashback will be credited within 45 days from the offer end date.
- This promotion is independent of other international offers and does not affect a cardholder’s participation in other SBI Card promotions.
In effect, the card issuer charges the standard markup—typically 3.5% plus applicable taxes—and refunds 2.5% as cashback. It is unclear whether the tax component on the markup is reversed along with the cashback. Similar offers have been launched by other banks in the past with varying terms; for example, ICICI has run comparable promotions, and HDFC has previously offered cashback or reward incentives on international spends.
- 1% Cashback on markup fee with HDFC Visa credit cards (expired)
- Bonus reward points on international spends with HDFC Mastercard (expired)
While promotions like this benefit travelers who use their cards in-person abroad, they do not help cardholders who primarily make international purchases online. Demand for consumer-friendly international online transaction offers is growing, and cards with low or zero markup fees—such as some exclusive debit or premium credit cards—remain attractive options for frequent international spenders.
Given their global presence and customer data, providers like American Express may be well positioned to introduce competitive offers for international online transactions in the future.
If you prefer using credit cards for international charges, several premium cards are known for better savings or lower effective markup through rewards and benefits. Examples include:
- HDFC Diners Club Black
- HDFC Infinia
- Yes First Exclusive
- Yes First Preferred
- HDFC Regalia
- HDFC Regalia First
- HDFC Diners Premium
- RBL Icon Credit Card
For a full comparison of credit cards with low forex markup fees, consider consulting a dedicated roundup of cards suited to international travel. When choosing a card, compare the markup percentage, taxes, reward rates, and whether offers apply to online as well as point-of-sale transactions.
What do you think about SBI’s cashback on forex markup? Which card do you use for international spending? Share your thoughts in the comments.