How To Avoid International ATM And Credit Card Fees

by OMM on February 10, 2012

If you travel internationally ATM fees can add up at $5 a pop, or even more if you are paying more. Credit card fees can also add up when you’re being charged a 3% fee. For a long time I just grinned and took these fees on the chin; I would max out my daily withdraw limit in order to limit my transactions and lower my ATM fees, and use my credit cards as little as possible for large international purchases.

Over time I’ve developed better banking routines which save me money and make more sense. For those looking to streamline their banking routines, you may find this post helpful.

No ATM Fee Banks

There are two banks I know of which will reimburse you when it comes to domestic and international ATM fees.

Charles Schwab Bank

They offer a checking account that doesn’t require a minimum balance, earns a small interest rate, and will reimburse you for ATM fees. You can transfer money from external banks to fund this account.

You can check out Schwab by clicking here.

Capital One Bank

Offers a checking account similar to Schwab’s account above; however, it doesn’t require you to open a brokerage account at the same time. With that being said, some people may prefer this option.

You can check out Capital One by clicking here.

International Wires

The best bank I’ve found for wiring money to some of my international bank accounts is Citibank. You can setup the wire online and they only charge $30 for each wire. Before I set this up Wells Fargo wanted me to show up in person and pay them $45 for a wire.

High Yield Savings Accounts

Until you need to withdraw your money for use, you should be earning as much money (via interest rates) with it as possible. I like to keep my money in a high yield savings account, then as I need it I transfer it from this account to my account which charges me no ATM fees (mentioned above).

For high yield savings accounts I would recommend you check out these options:

American Express – Personal Savings

Discover – Money Market

Ally – Saving

ING – Orange Savings Account

Getting The Best Exchange Rates

In order to get the best exchange rates possible I like to conduct my transactions in the following order if possible.

1. Use credit cards – Using your credit cards will enable you to get the best exchange rates possible; however, be sure the vendor is not charging an extra percentage on top of what the credit card company is charging. For example, in Thailand stores will often charge 3% credit card transactions fees; in these cases I opt to pay cash.

2. Withdraw cash through the ATM – Getting your cash through the ATM will give you better exchange rate compared to the methods below.

3. Exchange big bills – If you bring cash and are exchanging it at a money exchange kiosk; exchange the largest bills that you can. You will get a better exchange rate for a $100 bill in comparison to $20 bill. You should also look around before deciding on an exchange rate kiosk, some offer much better rates than others.

4. Avoid exchanging your money at the airport – You will most likely get your worst exchange rates at the airport.

When I get ready to leave a country, I try to spend as much of the local currency that I have before I leave. By having to exchange your leftover money to another currency you are getting hit with exchange rates twice; once when you converted the first time, and again when you change it out again. If I’ll be heading back in the near future I just hold onto my leftover currency for the next trip.

No Fee Credit Cards

The one credit card company which I’ve found that does not charge the 3% foreign transaction fee is Capital One. These fees are not charged on any of the credit cards which they offer.

Banks and Fees

Below are tables of the international fees charged that I could find pertaining to the different banks listed. These fees do change from time to time, and for some cards and accounts may or may not apply.

The best thing to do is call your bank and credit cards well in advance before leaving on your trip and check on the fees for your particular accounts and cards.

You can use these tables as a reference to benchmark your bank against others you may want to apply to.

Credit Card Foreign Transaction Fees:

Bank Fee
American Express 2.7% for personal cards; 2.5% for corporate cards; 0% for US Platinum and Centurion cardholders.
Bank of America 3% for most cards
Capital One 0%
Chase 3%, some cards are 0% check with Chase
Citi 3% for most cards
Discover 2%
HSBC 3% for most cards
Wells Fargo 3%

ATM Foreign Transaction Fees:

Bank Fee
Bank of America 3%
Capital One 0%
Chase 3% + $5 transaction fee
Citi 3% + $2 transaction fee, some accounts excluded
HSBC 3% + $1.50 withdrawal fee
Wells Fargo $5 withdrawal fee

Final Thoughts

I’ve made this mistake a few times…forgetting to let one or several of my banks know I’m traveling abroad. Do yourself a favor and don’t forget to notify your bank/s. I also always like to travel with more than 1 ATM and credit card, just in-case I lose one. Keep one of each where you can access them easily, and then stash the “back-up” cards somewhere safe. I also like to stash a decent amount of money somewhere so that if for some reason my cards are not working at all I have enough money to get by for a few days until things get sorted.


{ 2 comments }

Michael James December 21, 2012 at 9:46 am

Some good advice here. In the past I always would opt for smaller bills when getting money from the bank prior to a trip. Just a habit thinking that smaller bills are easier to break. However, as you mentioned, larger bills do fetch a better exchange rates when travelling internationally. Next time I’ll be sure to ask for 100s instead of 20s!

OMM December 21, 2012 at 10:02 am

Funny, I used to do the same thing. The teller would ask what denominations I would like and I would automatically say 20s while in the U.S. Then I would get abroad and think I should have asked for 100s because they get that slightly better rate. It’s really only a big deal if you’re bringing lots of cash with you to exchange; usually I’m using my ATM card to get most of my cash while traveling which has no international ATM fees : ) Thanks for stopping in!

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