Guide to using credit cards in India

Quick insights

• Major credit cards are generally accepted in India, especially in large cities and tourist-friendly areas.
• Digital payments are a popular payment option due to India’s United Payments Interface (UPI) system.
• Travelers may use a credit card with no foreign transaction fees.

Spices, Bollywood, cricket and henna are all poplar Indian customs and culture known around the world. If you’re looking to experience the sights, sounds and smells of India first-hand, you’ll have no shortage of options. To fully enjoy all the country has to offer, you’ll need an accepted payment method. However, understanding India's payment options may be a challenge for first-time travelers.

Paying in India can take some understanding and planning, especially when getting and using cash or making mobile payments. India has its own digital payment platform, so travelers may feel more comfortable using credit cards to pay.

Read on to learn how to use credit cards—and other payment methods—when traveling throughout India.

Using cards in India

Paying with debit cards, credit cards and prepaid cards is common in India, especially in major cities and tourist-friendly areas. Most major credit cards—including those serviced by Visa and Mastercard—are accepted.

Many card issuers—including Chase —no longer require notice when traveling. Letting your card issuer know you’ll be abroad is becoming less common as fraud detection becomes more sophisticated.

There are some benefits to using credit cards while traveling, including:

• Ease of use: It is often simpler to swipe a card than it is to count cash at a register, especially in a currency you’re not used to.
• Safety: Cash can get lost or stolen, and when it’s gone, it’s gone. Whereas if your card is lost or stolen, you can lock your credit card and monitor its usage.
• Rewards: Using your card abroad may earn points or miles, depending on the card. Travel credit cards may earn higher rewards for travel-related purchases.  
• Card benefits: Using your card on an overseas trip may also provide additional benefits, such as travel insurance.

While most major credit cards are accepted in India, payment acceptance is left to the discretion of the merchant and not every card type may be accepted. For this reason, you may want to consider having cash to fall back on.

Getting cash in India

For the most part, paying with cash in India in common and is still used throughout the country. In some places—like when shopping at local vendors or outside of big cities—cash may be the preferred form of payment.

You can exchange for local currency in many places including:

• ATMs
• Currency exchange establishments
• Banks
• Airport kiosks
• Some high-end hotels

When exchanging dollars for rupees, using a currency exchange at the airport or in a hotel while abroad does not provide the best exchange rates.   

Using alternative payments

India’s United Payments Interface (UPI) has transformed the country’s payment options. Prior to its introduction in 2016, locals were heavily reliant on cash. UPI, however, provided an instant payment system that allows users to transfer money between bank accounts.

UPI’s adoption has been wide, so digital payments are very common in India. You may see QR codes for cashless payments on side street stalls, temples and rickshaws, for example.

Foreigners wanting to use India’s UPI system will need to download and set up UPI One World—the UPI app for those without an Indian bank account. You also need an international phone number to set up the account. For this reason, travelers may find it easier to rely on cash and cards over digital payments.

International card and ATM fees

Converting U.S. dollars to Indian rupees may incur fees—whether you’re getting cash or swiping a card. Common fees include foreign transaction fees, currency conversion fees, dynamic currency conversion fees and ATM fees:

Foreign transaction fees

You may be charged foreign transaction fees when using your credit or debit card to make purchases in a foreign currency. These fees vary depending on your credit issuer, bank and the purchase amount. The rate for foreign transaction fees is typically 1-3% of the entire purchase, which might include shipping costs and taxes.

However, you may be able to avoid foreign transaction fees with a card that doesn’t charge them. Check your cardmember agreement for details on international purchases. If you travel often, it may be worth looking into a travel rewards credit card (which tend to offer this benefit).

Currency conversion fees

When you exchange one currency for another, you may be charged a currency conversion fee. Currency conversion fees can occur when you make purchases abroad using a credit or debit card, withdraw cash from an ATM in a foreign country or exchange currency at a bank or currency exchange service. The amount varies but is typically 1-3% of the transaction amount.

Dynamic Currency Conversion (DCC) fees

Merchants typically use a DCC service that allows a transaction to be processed in the cardmember’s home currency. The customer pays fees for this service when making a purchase and often receives an unfavorable exchange rate.

You may be able to avoid DCC fees when using a credit card by paying in the local currency. Sometimes the merchant can select the currency before handing you the payment terminal, or you may need to select it yourself.

When you pay in rupees, you’ll still be subject to the fees and exchange rates associated with your credit card, but in many cases, those terms are more favorable than what DCC services offer. 

ATM Fees

Your bank may charge a fee if you withdraw cash from ATMs. Often, the ATM operator charges a fee as well. These fees are usually two-fold and include a flat fee (typically a couple of dollars) as well as a percentage based on the amount you withdraw. Fees will vary by ATM operator.

In summary

Credit cards are one common payment type in India. You may find that it’s more common to use credit cards in big cities and places that cater to tourists. For areas off the beaten path or when shopping with smaller, local vendors, cash may be preferred. Having a mix of cash and cards may provide travelers with a seamless buying experience.

Foreigners cannot bring rupees into India, but can get local currency at ATMs, airport kiosks and some high-end hotels. You may be charged a currency conversion fee when getting local currency or when using your card to make purchases. However, if you have a credit card that does not charge foreign transaction fees, you may be able to avoid paying those fees when using your credit card abroad.