Introduction
Planning an overseas trip is always exciting, but amidst the flurry of booking flights and ensuring your passport is up-to-date, it's crucial not to overlook a fundamental aspect: how you're going to handle your finances during your journey. In this comprehensive guide, we'll delve into the world of no-fee debit cards for international travel, helping you make informed decisions and save money while exploring the globe.
Things to Consider When Making Payments Overseas
In the past, traveler's checks were the go-to for international travel, but their popularity has waned since the mid-'90s. Today, travelers often use a combination of cash and credit cards, much like they do back home. Most foreign merchants accept payments through Visa, Mastercard, American Express, and Discover credit cards, although acceptance may vary by country. To save money, opt for a credit card without foreign transaction fees, which can otherwise add an extra 3% or more to your purchases in another currency. However, there are situations where cash is necessary. While airports and local banks offer currency exchange services, carrying large amounts of cash can be risky. Using your checking account's debit card to withdraw money from local ATMs can be a secure and convenient solution.
Potential Debit Card Fees When Traveling Abroad
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Nonbank Usage Fee: Some banks charge a fee when you use an ATM operated by a different bank, both domestically and internationally. This fee applies whether you're checking your balance, making a withdrawal, or transferring funds.
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Non-ATM Withdrawals: If you withdraw money from a teller at a different bank, you might encounter a flat fee or a percentage-based fee on the withdrawn amount.
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Foreign Transaction Fees: Similar to foreign transaction fees on credit cards, some banks impose a foreign transaction or foreign exchange fee on debit card usage when making purchases or withdrawing money abroad.
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ATM-Operator Fees: Just like in the U.S., ATM operators in foreign countries may charge you a fee for cash withdrawals.
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ATM-Conversion Fees: In some cases, you might pay a conversion fee to the ATM's operator instead of your bank converting the currency.
To navigate these potential fees, it's wise to consult your bank and inquire about the fees that apply to your specific account. For frequent travelers, consider opening an account that offers a no-fee debit card, ensuring you avoid unnecessary charges.
The 3 Best Checking Accounts and Debit Cards for International Travel
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Schwab Bank High Yield Investor Checking® Account
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Schwab Bank's High Yield Investor Checking account is an excellent choice for international travelers. It offers fee-free ATM usage worldwide, and the bank refunds all ATM-operator fees at the end of each month. To open this account, you'll also need to link it to a Schwab One® brokerage account, which doesn't have a monthly fee. Furthermore, there are no minimum deposit or balance requirements, and no monthly service fees. Using the Schwab Bank Visa® Platinum debit card, you can make purchases and withdrawals without foreign exchange fees. This account also earns interest, with a variable annual percentage yield currently at 0.13%.
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Travel Blogger Insight: Lia Saunders, a travel blogger at Practical Wanderlust, highlights the significant savings of the Schwab High Yield Investor Checking® Account. She and her husband, who travel for extended periods, have saved hundreds of dollars in refunded ATM fees with this account.
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Fidelity® Cash Management Account with Fidelity® Visa® Gold Check Card
- Although technically a brokerage account, this option includes an FDIC-insured bank account. It has no minimum deposit or balance requirements, no monthly fees, and offers reimbursem*nt for all ATM fees. However, it does have a 1% foreign transaction fee on ATM withdrawals and purchases.
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Capital One® 360 Checking® Account
- Capital One's 360 Checking® Account is another attractive option for international travelers. It doesn't charge foreign transaction fees, has no minimum deposit or balance requirements, and doesn't impose a monthly service fee. While Capital One doesn't charge ATM fees for using the 360 Checking MasterCard® Debit Card, they won't reimburse you for fees charged by the ATM operator. To avoid these fees, consider withdrawing money from Capital One Bank–branded ATMs or Allpoint ATMs in the U.S., Canada, U.K., Puerto Rico, Australia, or Mexico.
Bottom Line
Larger banks offer various checking accounts with distinct benefits and fees. If you can meet the minimum daily or monthly balance requirements, you might be eligible for a premium account that waives and refunds ATM fees. Opting for a debit card that reimburses ATM-operator fees, doesn't charge ATM fees, or foreign-exchange fees can significantly enhance your travel experience. This convenience allows you to withdraw small amounts of foreign currency without fretting about fees, ensuring you make the most of your international adventures.
