Forex markup explained: why a 5% cashback card pays about 1% on dollar spend (2026)

Short answer: when you pay a dollar bill with an Indian credit card, your bank adds a forex markup, usually between 0% and 3.5% depending on the card, and charges 18% GST on that markup. On a 3.5% card the real cost is about 4.13% of every foreign-currency payment, and it comes straight out of whatever rewards you earn on it.

This guide shows how the charge works, how it eats into rewards on dollar subscriptions, and which cards in our catalog charge little or nothing.

How a dollar payment becomes a rupee charge

Three things happen when you pay a USD merchant with a rupee card:

1. Conversion at the network rate. Visa, Mastercard or RuPay converts the dollars to rupees at its daily rate.
2. The forex markup. Your bank adds its percentage on the converted amount.
3. GST on the markup. 18% GST is charged on the markup, not on the purchase.

A worked example, a $50 subscription with the network rate at ₹83.20:

The extra ₹171.81 is 4.13% of the converted amount, paid every month on a recurring bill.

What the markup does to your rewards

Rewards run on the amount charged, but the markup runs first. On a hypothetical card paying 5% back on that $50 payment:

• Reward: 5% of ₹4,331.81 = ₹216.59
• Your net cost: ₹4,331.81 minus ₹216.59 = ₹4,115.22
• Saving against the network rate: ₹44.78, or about 1.1%

The card's 5% headline became roughly 1% on a dollar bill. And many cards pay a lower rate on foreign transactions, or none, which turns the markup into a straight loss. Check the reward terms on the card page before you assume your usual rate applies abroad.

Markups on cards in our catalog

Generated from our catalog, lowest markup first. Rows we have not yet checked against the issuer say so in the last column.

3.5% is still the most common markup on Indian cards. Many premium-tier cards charge 2%, and a growing group charges nothing.

In 2026 IDFC FIRST removed the markup on all its credit cards, including existing ones.

Correction, 26 Oct 2026: an earlier version of this guide listed HDFC Pixel Play as a zero-markup card. HDFC lists it at 3.5%, as the table shows.

Dollar subscriptions: a simple setup

If you pay for software, AI tools or hosting in dollars:

1. Add up your foreign-currency payments. Three months of statements is enough. Multiply the monthly total by 4.13% to see what a 3.5% card costs you.
2. Put recurring dollar bills on a zero or low-markup card. Keep your best rupee rewards card for rupee spending.
3. Check whether the low-markup card earns on foreign spend. A small markup with good foreign-spend rewards can beat zero markup with no rewards.
4. Pay in the merchant's currency. If a checkout offers to bill you in rupees, decline. Dynamic currency conversion is done at the merchant's rate and is usually worse.

On $200 a month of dollar bills at ₹83.20, the gap between a 3.5% card and a 0% card is about ₹8,250 a year, GST included.

A fee waiver is not a markup waiver

Some cards waive their annual fee once you spend a set amount in a year. That waives the yearly fee only. The markup still applies to every foreign transaction.

Tools

• Forex calculator: enter your foreign spend and card to see the markup paid.
• Polo Brain: ask which of your cards to use for a specific dollar merchant.

Related reading

• Best credit cards for international transactions from India
• Paying Anthropic and Claude from India
• Best cards for foreign spend