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When you’re traveling out of the country and go to withdraw cash in the local currency, fees can hit you from every direction: from your bank, the ATM, even currency commissions.
With a bit of planning and understanding, though, you can save some cash on pesky hidden charges. Here’s how to avoid international ATM fees when you travel.
Types of foreign ATM fees
Here are the types of fees you should be aware of when using a debit card and ATM abroad.
Foreign transaction fees
Foreign transaction fees are charged by your bank for currency conversion.
If your bank charges foreign transaction fees — and many do — you’ll pay a percentage of the total withdrawal amount, usually 1% to 3%, for using your card at a foreign ATM (or anywhere else abroad).
Out-of-network ATM fees
This is the fee your bank charges for using a non-network ATM outside your home country. Often, it’s a flat fee that you’ll pay per withdrawal and is likely $2 to $5.
ATM surcharge
The ATM or its affiliated bank also charges a fee, which is likely several dollars, in exchange for its use.
Currency conversion fees
When you withdraw money from a foreign ATM, the machine will sometimes offer the choice to convert transactions into your home currency, but this can involve hidden currency conversion fees, sometimes as high as 7%.
» Learn more: What banks charge for debit foreign transaction fees
How to avoid paying bank fees while traveling
1. Use your bank network's ATMs or partner ATMs
If your bank operates ATMs around the world, like HSBC, find out where those ATMs are and whether there are any where you’re headed; if so, use those if at all possible.
If your bank doesn’t operate outside the U.S., check whether it’s part of any fee-free ATM networks that do.
2. Pay in local currency
If a foreign ATM offers the option to pay or withdraw in your home currency or the local currency, always choose to pay in the local currency because your bank may offer a better conversion rate.
3. Reduce ATM usage
While it’s not always ideal to waltz around a foreign city with loads of cash in your wallet, reducing the frequency that you withdraw money from a foreign ATM can save you more than a few dollars.
Withdraw as much cash at one time as you feel comfortable with and keep it in a safe place. This will reduce how often you have to make another withdrawal and pay another fee.
Additionally, any time you can pay with a credit card, do so. You’ll avoid additional fees as long as you use a card with no foreign transaction fees.
» Learn more: Excellent no foreign transaction fee credit cards
4. Choose a bank that doesn’t charge foreign ATM fees
If you have accounts with more than one bank or are considering setting up an account at a new bank and you travel often, consider banks that don’t charge foreign transaction fees or foreign ATM fees.
For example:
A Capital One 360 checking account won’t charge you fees for using an out-of-network ATM.
HSBC doesn’t charge foreign transaction fees or foreign ATM fees, plus it has international ATMs.
USAA international ATM fees don’t exist, either (though a 1% foreign transaction fee still applies).
Chase international ATM fees vary depending on what type of checking account you have. The Chase Sapphire Checking account charges no fees for foreign ATM use.
Bank of America international ATM fees cost a flat $5.
Wells Fargo international ATM fees cost $5 for two of their checking accounts — Clear Access and Everyday checking — while Wells Fargo Prime and Premier account holders pay $0.
5. Use a bank that reimburses ATM fees
Alternatively, check whether your bank refunds out-of-network ATM fees. USAA will reimburse up to $10 in ATM surcharges, while Wells Fargo will reimburse one foreign ATM fee per month if you have a Prime account, and for its Premier checking accounts, reimbursem*nt is unlimited.
A Chase Sapphire Checking account offers a fee refund if you are charged by non-Chase ATMs.
Check your account details or contact your bank to see whether your account features that benefit.
6. Use your debit card to get cash back at a store
Not every establishment allows you to request cash back when you make a purchase, but it’s worth asking about during checkout.
If a business permits it, requesting cash back when you swipe your card may help you avoid an ATM foreign transaction fee. Just make sure you use a debit card with no foreign transaction fee to avoid an additional charge.
» Learn more: How to avoid foreign transaction fees
7. Use a travel credit card instead
Where possible, like in big cities in developed countries, use a travel credit card that doesn't charge foreign transaction fees. That way, you can skip ATM fees altogether.
If you’re not sure whether your card charges these fees, check the terms and conditions or contact the issuing bank to find out.
» Learn more: The best travel credit cards right now
The bottom line
It’s possible to avoid international ATM fees when you travel. You just need to understand how foreign fees work, look into your bank’s fee structure and plan withdrawals wisely.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:
Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card
No annual fee: Bank of America® Travel Rewards credit card
Flat-rate travel rewards: Capital One Venture Rewards Credit Card
Bonus travel rewards and high-end perks: Chase Sapphire Reserve®
Luxury perks: The Platinum Card® from American Express
Business travelers: Ink Business Preferred® Credit Card
As a seasoned expert in international finance and travel, I've had extensive experience navigating the complexities of foreign ATM fees and currency transactions. I've successfully implemented strategies to minimize fees and optimize financial transactions while abroad. My in-depth knowledge stems from years of hands-on involvement in managing financial matters related to international travel. Here's a breakdown of the concepts discussed in the article:
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Foreign Transaction Fees:
- These fees are charged by your bank for currency conversion.
- Typically range from 1% to 3% of the total withdrawal amount.
- Applied when using your card at a foreign ATM or making purchases abroad.
-
Out-of-Network ATM Fees:
- Charged by your bank for using a non-network ATM outside your home country.
- Often a flat fee, usually in the range of $2 to $5 per withdrawal.
-
ATM Surcharge:
- A fee charged by the ATM or its affiliated bank for using their services.
- This fee can be several dollars and is in addition to any fees charged by your own bank.
-
Currency Conversion Fees:
- Occurs when a foreign ATM offers the option to convert transactions into your home currency.
- Can involve hidden fees, sometimes as high as 7% of the transaction amount.
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Strategies to Avoid International ATM Fees:
- Use Your Bank's ATMs:
- Utilize ATMs operated by your bank or its partners globally.
- Pay in Local Currency:
- Opt for local currency when given the choice at a foreign ATM.
- Reduce ATM Usage:
- Withdraw larger amounts to minimize frequency and associated fees.
- Use credit cards for transactions whenever possible.
- Choose a Fee-Free Bank:
- Consider banks that don't charge foreign transaction or ATM fees.
- Examples include Capital One 360, HSBC, USAA, and others.
- Bank Reimbursem*nt of Fees:
- Some banks reimburse a portion or all out-of-network ATM fees.
- Examples include USAA and Wells Fargo with specific account types.
- Cash Back at Stores:
- Request cash back when making purchases to avoid ATM fees.
- Use Travel Credit Cards:
- Opt for credit cards with no foreign transaction fees for international transactions.
- Chase Sapphire Preferred, Bank of America Travel Rewards, and Capital One Venture are mentioned as examples.
- Use Your Bank's ATMs:
-
Maximizing Rewards:
- The article briefly touches on maximizing rewards with travel credit cards.
- Recommendations include cards like Chase Sapphire Preferred, Bank of America Travel Rewards, Capital One Venture, Chase Sapphire Reserve, The Platinum Card from American Express, and Ink Business Preferred.
By applying these strategies and staying informed about the fee structures of different banks and financial products, travelers can effectively avoid or minimize international ATM fees and optimize their financial transactions during overseas trips.
