Using a credit card in India: Choose the right card and keep costs down

Use our guide to get the best out of your plastic, and your cash, on holiday in India.

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By

Chloe Vlahos

Updated

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India has a rich ancient heritage and flavourful foods, and boasts some of the world’s most stunning landscapes. Brits are increasingly travelling to India to explore the diversity the country offers. So if you plan on seeing the Taj Mahal up close, you’ll want to understand how to use your credit card in India before you depart, to ensure a hitch-free trip.

The country’s major metropolitan areas, such as Delhi and Mumbai, are increasingly likely to accept credit cards as a standard form of payment. However, it is recommended that you also carry cash, since many rural areas of India still operate on a cash economy. India’s main currency is the rupee (INR).

Cash machines in India

ATMs and credit card machines are largely absent in rural India, so it’s important to always keep some cash with you. While there may be some ATMs dotted around the larger cities, it is worth keeping in mind that if you decide to take cash out using an ATM machine then your withdrawal amount may be subject to a specific limit. If you use your credit card to get a cash advance, you’re likely to start paying interest immediately.

Cash in India

You’ll find a number of establishments in smaller towns and even popular tourist destinations that don’t accept credit or debit cards. This also applies to most restaurants (or dhabas) commonly found on India’s highways. Plus, cash is needed to pay for food at markets and on board train journeys. As you may not always be in an area where ATMs are accessible, it is advisable to take enough money out in case you plan to travel around further.

Chip and PIN

While chip-enabled credit cards are increasing in India, magstripes are still the most commonly used. However it is recommended to use your chip card with a PIN when possible, since this is safer to use than the magstripe counterparts.

The Reserve Bank of India is phasing out cards with magnetic stripes by December 31, 2018. From January 2016, all new banking customers in India are receiving chip-enabled cards.

Is it safe to use my card in India?

By exercising some caution when using your credit card in India, you’ll have a relatively trouble-free experience.

  • Keep your PIN safe. Use one hand to enter the PIN and the other to shield it from prying eyes and hidden cameras.
  • Select ATMs with care. Try and stick to ATMs in banks and avoid using ones in the street.
  • Watch out for “skimmers”. When installed in an ATM, a card skimmer works by stealing information from credit and debit cards. If you feel the card slot is not as smooth as it should be or if there’s a problem with the keypad, cancel your transaction and look for another ATM.

Keeping your credit card (physically) safe

Remain alert to street crime, especially especially where two or more people work in distracting victims before decamping with their valuables. Pickpocketing and handbags being stolen are not uncommon, so it’s important to be alert, particularly in crowded places.

Make sure you always know where your belongings are, and keep an eye on your credit care in situations where it could be skimmed, such as at restaurants.

Potential credit card fees

Some shops discourage credit and debit card payments because they have to pay transaction fees to their banks for the convenience. Others tend to charge their customers 1% or 2% extra to cover for the fee. However, this practice is considered illegal by the Reserve Bank of India.

Credit card fees can leave a noticeable dent in your pocket when you’re travelling overseas, so know what you’re up against well in advance and choose a card with no or low fees.

Foreign transaction fees

British credit card issuers typically charge a fee equivalent to 1% to 3% of your transaction, so carefully review your card’s smallprint to avoid statement surprises. Some cards designed for travel come with no foreign transaction fees, so this could be a good time to switch.

Learn more about cards designed for overseas spending

Currency conversion fees

If a retailer offers to bill your credit card in sterling, dynamic currency conversion comes into play. While this might sound like a good deal, you’ll actually end up getting a worse exchange rate, and you might also end up paying currency conversion fees. Whenever you’re presented with an option, choose to pay in local currency.

Cash advance fees

Using your credit card to withdraw money from an ATM may not make sense unless it’s a bona fide emergency. Each time you withdraw funds from an ATM, you’re likely to pay a cash advance fee. Your APR for cash advances is typically higher than your purchase APR, and you’ll typically get no grace period on interest — instead, you start paying interest immediately. Again, some cards designed for overseas spending will waive this fee.

The table below serves as an example of how much extra you may pay to use your credit card for in India.

section of credit card summary box document

Additionally you can get an idea of costs by using these online currency conversion tools from Mastercard and Visa.

What is a cash advance fee?

A cash advance fee is calculated (and charged) when you withdraw cash from your credit card. It’s usually the greater of a flat fee or a percentage of the transaction. For example, “2.5% of the transaction, minimum £3.00”.

How to prepare before travelling to India

  1. Go with Visa or Mastercard. Visa and Mastercard are the most commonly accepted cards in India, and it is not advisable to bring an American Express card as they are rarely accepted.
  2. Think no foreign transaction fees. When there are cards that come with no foreign transaction fees, using ones that charge 2% or 3% of each overseas transaction does not make sense. Some of these cards don’t charge an annual fee, either.
  3. Keep your bank posted. Banks are likely to block credit cards if they detect suspicious activity such as unexpected overseas transactions. To make sure this does not happen to your card, let your bank know about your travel plans before you leave the UK.
  4. Keep the emergency number handy. Know which numbers you’ll need to call if you end up losing your card or if you need an emergency replacement.
  5. Know where you’ll get cash from. Try to avoid exchanging money at airports and popular tourist destinations because of typically poor exchange rates. Plan on getting cash soon after your arrival, since it’s likely you’ll need it early on. ATMs in India typically come with a maximum withdrawal limit of 15,000 rupees.

Next steps

Ask yourself these simple questions before you leave so your spending in India does not hit any roadblocks.

  • Which cards will I take? Visa and Mastercard are the favourites. If you’re planning a trip, check out cards which give you complimentary airport lounge access. If you’re planning well in advance, consider earning air miles for your trip with a frequent flyer credit card.
  • Have I let my bank know? If you don’t inform your bank about your travel plans, you may end up with a temporarily suspended card.
  • What fees do I need to pay? If your existing cards come with foreign transaction fees, look for one that does not. Paying in Sterling outside of the UK might come with currency conversion fees.
  • How will I get cash? Using your debit card at an ATM is the simplest way to access your own money. You can carry cash and traveler’s cheques with you.

When you’re in India, remember to always keep cash handy on you, or be aware of where the nearest cash machine is.

Compare cards with fee-free currency conversion in India

Table: sorted by representative APR, promoted deals first
Updated daily
Name Product Finder score Finder score Purchases Annual/monthly fees Initial credit limits Representative APR Incentive Link
The Royal Bank Credit Card
The Royal Bank Credit Card
4.5
★★★★★
★★★★★
Expert analysis
12.9%
£0
Min. limit £250, max. limit not specified.
12.9% APR (variable)
Representative example: When you spend £1,200 at a purchase rate of 12.9% (variable) p.a., your representative rate is 12.9% APR (variable).
Go to site
Read review
NatWest Credit Card
NatWest Credit Card
4.5
★★★★★
★★★★★
Expert analysis
12.9%
£0
Min. limit £250, max. limit not specified.
12.9% APR (variable)
Representative example: When you spend £1,200 at a purchase rate of 12.9% (variable) p.a., your representative rate is 12.9% APR (variable).
Go to site
Read review
Santander All in One Credit Card
Santander All in One Credit Card
4.5
★★★★★
★★★★★
Expert analysis
0% for 15 months reverting to 23.9%
£3 per month
Min. limit £500, max. limit not specified.
29.8% APR (variable)
0.5% after £1 of monthly spend. Maximum of £10 cashback paid per month. Cashback paid Monthly into Card Account. Maximum spend for cashback purposes is limited to credit limit.
Representative example: When you spend £1,200 at a purchase rate of 23.9% (variable) p.a. with a fee of £3 per month, your representative rate is 29.8% APR (variable).
Check eligibility
Read review
118 118 Money Guaranteed Rate Card
118 118 Money Guaranteed Rate Card
3.5
★★★★★
★★★★★
Expert analysis
34%
£0
Min. limit £500, max. limit not specified.
34% APR (variable)
Representative example: When you spend £1,200 at a purchase rate of 34% (variable) p.a., your representative rate is 34% APR (variable).
Check eligibility
Read review
NatWest Reward Black Credit Card
NatWest Reward Black Credit Card
4.0
★★★★★
★★★★★
Expert analysis
21.9%
£84 per annum. Reward Black Current Account holders: Year 2 onwards - £0 per annum
Min. limit £5,000, max. limit not specified.
40.7% APR (variable)
You'll earn 1% back at supermarkets and 0.5% back everywhere else, including supermarket petrol stations. At selected retailers, you could earn 1-15% back.
Representative example: When you spend £1,200 at a purchase rate of 21.9% (variable) p.a. with a fee of £84 per annum. Reward Black Current Account holders: Year 2 onwards - £0 per annum, your representative rate is 40.7% APR (variable).
Go to site
Read review
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