Avoiding ATM Withdrawal Fees When Traveling Abroad

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Although using ATM’s when traveling abroad is generally a smart strategy for getting the best exchange rates for your dollars, many ATM transactions come with fees that cancel out any savings you might expect. Luckily, as TPG contributor Nick Ewen illustrates, there are some ways to avoid these fees, including knowing which foreign banks your US bank partners with.

Avoid ATM fees when traveling abroad.
Avoid ATM fees when traveling abroad.

As savvy international travelers, I’m guessing that most (if not all) of TPG readers carry at least one credit card without foreign transaction fees. My first such product was the Chase Sapphire Preferred, and I recently “diversified” by adding the Citi Hilton HHonors Reserve card. By foregoing forex fees, these cards save me up to 3% on purchases made abroad, which can add up to a pretty nice chunk of change.

However, what happens if you are taking a more “off-the-beaten track” trip? Many smaller merchants do not take credit cards (or offset the foreign transaction fee discount by charging their own fees), so you may be left withdrawing foreign currency from an ATM abroad in order to pay cash for certain transactions. But ATM withdrawals come with their own fees that may significantly impact your exchange rate. Fortunately, there are ways to lower (or even eliminate) the fees associated with these withdrawals if you pay attention to your bank’s partner institutions, and this post will offer some guidance for doing just that.

The Best and the Worst

Before we get into the details, here’s a quick overview of what I found when looking at some of the most popular U.S. banks and what fees you’d be dinged with to withdraw 100 EUR.

Best:

1)   Charles Schwab: Receive full reimbursements at the end of every month for any ATM fees incurred, anywhere if you have the Schwab Bank Visa Platinum debit card. 100 EUR = $131.36.

2)   Citibank: With numerous international locations, customers can avoid fees by withdrawing money from Citi-branded ATM’s. 100 EUR = $131.36, but the same transaction at a non-Citi location would be $137.30.

3)   TD Bank: America’s “most convenient bank” (a self-appointed title) charges a flat $2.50 fee for ATM withdrawals with no foreign transaction fees. 100 EUR = $133.86.

Worst:

1)   Chase and PNC (tie): By charging a $5 fee plus 3% on ALL international ATM transactions, these banks make withdrawing money outside the US a costly proposition. 100 EUR = $140.30.

2)   Capital One: This is a mixed bag. If you live in a state with brick-and-mortar locations, you will be charged a $2 transaction fee and 3% of the transaction, while if you just bank through them online through Capital One 360, there are no fees on any withdrawal outside the Capital One network. As a result, 100 EUR = $131.36 – $138.30 depending on your situation.

3) Wells Fargo: This bank charges a $5 for withdrawing money abroad from ATM’s, but if you go to a teller, they’ll also tack on a 3% fee, so beware! 100 EUR = $136.31.

4)   US Bank: With no foreign partners or international ATM locations, US Bank also adds fees to all debit card transactions abroad. However, their fee is just $2.50 (compared to $5 with Chase, PNC, and Wells Fargo). 100 EUR = $137.80

5)   HSBC: Despite having many international branches, HSBC still charges a foreign conversion charge even when withdrawing money from their own ATM’s. 100€ = $135.30 at international HSBC ATM’s, while 100 EUR = $137.80 at non-HSBC ATM’s.

6)   Bank of America: Update: As of December 2013 Bank of America charges 3% on international transaction fees. Numerous international partners allow customers to avoid a $5 by withdrawing from a partner ATM but you still get hit with a 1% international transaction fee. 100 EUR = $132.67 at these partner banks, whereas 100€ = $137.67 at non-partner locations.

Where did these calculations come from? Well first, a little bit of background. Generally, you get the best exchange rates by using either a credit card or a debit card to make purchases (or withdraw money) outside the US. Purchasing foreign currency from a US bank or exchanging US dollars for foreign currency at the airport or once you arrive at your destination will generally give you a poorer exchange rate than what you would get using plastic as well as ding you with processing fees. I’m always stunned when I hear my friends and family talk about purchasing traveler’s cheques or purchasing Euros ahead of a trip to Europe. They clearly don’t get it!

When you do take out money from an ATM, however, the fees can add up pretty quickly. Most banks will charge a flat fee for every withdrawal outside of their ATM network, generally between $2 and $5 (with the higher amounts often incurred outside the US). Then, the bank that owns the ATM will often charge an additional fee for withdrawing money – so you’re getting hit with two fees per withdrawal.

Finally, since you are withdrawing foreign currency from your account of US dollars, the currency network of the ATM (be it Visa, Cirrus, or another) will likely charge a foreign transaction fee for the currency conversion, generally between 1% and 3% of the dollar amount withdrawn.

Many banks waive fees
Many banks waive fees for their high-level customers.

Avoidance Techniques

So what’s the secret to lowering or eliminating fees on ATM withdrawals? Well, there isn’t a single universal way to do so, because it all depends on your bank. However are typically three ways that banks provide customers the ability to withdraw money abroad without fees:

1)   Premium accounts – Many banks waive these fees for their high-level customers. However, these accounts often carry quite large balance requirements and may result in other fees that can negate any savings abroad.

2)   International branches – Some US banks actually have physical branches abroad, and their US customers can often use these locations for ATM withdrawals (and many other transactions as well).

3)   International partner banks – Other US banks have created partnerships with financial institutions based in other countries, allowing their customers to take out foreign currency fee-free.

To help figure out where your bank may fall, I have researched and compiled information on some of the larger US-based banks. Please note that the fees below are just what the US bank will charge you for a withdrawal; as I mention above, the bank at which you are withdrawing money may tack on their own fee for using their ATM and that can vary widely. As you can see, there is no one-size-fits all model, so be sure to consider your options well in advance of your trip!

DISCLAIMER: This information is based on my research of bank websites and correspondence with customer service representatives via e-mail or on the phone. Certain institutions make this information very clear and easy to find, while others require some extensive digging. In addition, bank fees are always subject to change, so while these numbers are accurate as of mid-July, it’s always a good idea to call and verify the details with your own bank prior to departure. If you have any recent experience that differs from what I have below, please share in the comments!

Bank of America

Update: As of December 2013 Bank of America charges 3% on international transaction fees.

Despite it’s name, Bank of America is actually one of the better banks in the US when it comes to ATM withdrawals abroad. Through its relationships with several international partners, Bank of America customers can withdraw money without fees at numerous ATM’s outside the country. Simply visit this page and click on “International Locations” to see a list of their partners. Here’s a screen shot of that page with their various partners:

Screen shot 2013-07-25 at 9.54.34 AM

I have been a Bank of America customer for many years, and I have even found that these banks work outside of their listed countries. For example, my wife and I recently visited the Seychelles and happened to land on a religious holiday. We wanted to pick up some snacks and drinks at a store on the way to the boat dock at the Hilton Labriz, but only small (cash-only) convenience stores were open! Fortunately, there was a Barclays ATM smack in the middle of Victoria, allowing me to take out money (Seychelles Rupees) without incurring any fees.

For withdrawing money at a non-partner location, Bank of America levies a $5 fee plus a 1% international transaction fee. During my recent trip, I found that withdrawing from a partner bank (two BNP locations in Paris and the Barclays ATM in the Seychelles) doesn’t incur the 1% fee, but when I took money out from an ATM in Croatia, I was hit with both a $5 fee plus 1% of the transaction amount. These fees are detailed on the FAQ page of BankofAmerica.com (scroll down to the “Using your ATM card or debit card in foreign countries” section).

Capital One

In additional to having a number of credit cards that do not charge foreign transaction fees, Capital One also has one of the easiest and most customer-friendly ATM withdrawal policies out there if you live in a state with no brick-and-mortar locations: no fees. Period. When I called and spoke to the customer service rep, it almost sounded too good to be true. I specifically asked about fixed fees for using a non-Capital One ATM, and he said there were none. What about foreign conversion fees? He said that MasterCard will charge a 1% fee, but that is “covered” by Capital One, so you shouldn’t find it on your statement. However, as readers have commented below, if you bank through an actual Capital One physical location, you will be assessed fees as high as $2 per withdrawal and 3% of the transaction amount, meaning your costs could add up quickly.

Charles Schwab

This online brokerage offers a number of different checking account options, and while it states that “We offer a rebate on these fees assessed by others: For Interest Checking, Regular Checking, and Basic Checking up to first 6 transactions not to exceed $9.00 per statement period,” if you have the Schwab Bank Visa Platinum debit card, the bank will reimburse you for unlimited ATM fee rebates for cash withdrawals.

Chase
Chase does not have any affiliated banks outside the U.S.

Chase

As one of the largest banks in the United States, one would expect Chase to have some type of international partnership. When I found nothing online, a quick e-mail to customer service confirmed that the bank does “not have any affiliated banks outside of the US.” As a result, Chase customers who withdraw money abroad are subject to a $5 ATM withdrawal fee plus a foreign transaction fee of 3%. However, Premier Plus customers get four fee-free withdrawals a month, while Premier Platinum accounts always avoid the fee (though both are still subject to the 3% foreign transaction fee). Detailed fee information is available in the product guides at the following links: Total Checking, Premier Plus Checking, and Premier Platinum Checking.

Citibank

Unlike Bank of America and Chase, Citibank actually has branches abroad, with over 4,000 locations in more than forty countries. To find out whether your destination is included, go to this page. Asia-Pacific travelers can also visit Find My Citi. Here’s a screen shot of the search results for one of Brian’s favorite cities:

Screen shot 2013-07-25 at 9.57.50 AM

If you can’t find a location in your destination, non-Citibank ATM withdrawals outside the U.S. result in a $2 fee plus a 3% international transaction charge, though both of those are waived for Citigold members. Detailed fee information is available here.

HSBC

Like Citibank, HSBC has numerous locations abroad that allow customers to withdraw money without a transaction fee, saving $2.50. Unfortunately, they do not have an easy to use their website to locate their branches outside the US. To find a branch, visit www.hsbc.com and on the right-hand side of the page (under “Retail Banking and Wealth Management”) your can select your country to see if there are any HSBC locations. Here’s a screen shot:

Screen shot 2013-07-25 at 9.58.52 AM

Each link will take you into the specific country’s HSBC page, and from there, you can find banking locations.

Even though HSBC has their own branches abroad, withdrawals at those locations will incur the same 3% foreign conversion fee that you would find at non-HSBC ATM’s. You can compare the different HSBC checking accounts and their fees here. According to the customer service rep with whom I communicated, “There are no ATM fees assessed when a customer chooses to use a Premier Debit MasterCard.” However, I find it interesting that when you click on “Full details” under the HSBC Premier account, there is a little footnote:

Screen shot 2013-07-25 at 9.59.41 AM

Just some exceptions to keep in mind!

PNC

Add another bank to the “no international partner” list. PNC customers withdrawing money abroad will incur a $5 fee per transaction (waived for Performance and Performance Select customers) plus 3% of the transaction amount. You can get a complete overview of the fees by inputting your zip code here.

TD’s tagline as "America’s most convenient bank" unfortunately doesn’t apply to customers traveling internationally.
TD Bank doesn’t partner with international banks.

TD Bank

TD’s tagline as “America’s most convenient bank” unfortunately doesn’t apply to customers traveling internationally, as they too have no international partners. ATM withdraws result in a $2.50 fee; however, according to my correspondence with customer service, TD Bank doesn’t charge “any kind of foreign transaction fees.” For a breakdown of fees with each account, please click here and enter your state & city.

U.S. Bank

This Minneapolis-based bank also has no partners outside the U.S. They charge $2.50 per transaction plus a 2% fee for withdrawals made in U.S. dollars or a 3% fee for foreign currency withdrawals. However, the $2.50 fee is waived for Platinum and Premium Checking customers, while Gold Checking customers can get two fee waivers every statement period. To compare the different accounts, click here.

Wells Fargo doesn’t have any international partners with fee-free withdrawals.
Wells Fargo doesn’t have any international partners with fee-free withdrawals.

Wells Fargo

Like many other American banks, Wells Fargo doesn’t have any international partners with fee-free withdrawals. Any customer taking out money at a foreign ATM will be hit with a $5 fee. These fees are detailed out on the Wells Fargo debit card FAQ page here.

Now let’s put these numbers to the test on a sample withdrawal of 500 Euros at a rate of 1 EUR = $1.3136 (exchange rate on 7/19). The following calculations assume that you are using a non-affiliated bank and that all banks convert at the same exchange rate:

Bank

Currency Amount*

Fees

Total

% markup

Bank of America

$656.77

$11.57

$668.34

1.76%

Capital One

$656.77

$0-$21.70

$656.77-678.47

0-3.3%

Charles Schwab

$656.67

$0

$656.67

0%

Chase

$656.77

$24.70

$681.47

3.76%

Citibank

$656.77

$21.70

$678.47

3.304%

HSBC

$656.77

$22.20

$678.97

3.38%

PNC

$656.77

$24.70

$681.47

3.76%

TD Bank

$656.77

$2.50

$659.27

0.38%

U.S. Bank

$656.77

$22.20

$678.97

3.38%

Wells Fargo

$656.77

$5

$661.77

0.76%

* The $656.77 amount is not exactly equal to 1.3136*500. All conversions are made using the XE currency app, which includes many more decimal points when converting between two currencies.

Now let’s see what happens to those numbers when you use a partner/affiliated bank:

Bank

Currency Amount

Fees

Total

% markup

Bank of America

$656.77

$6.57

$663.34

1%

Capital One

$656.77

$0-$21.70

$656.77-678.47

0-3.3%

Charles Schwab

$656.77

$0

$656.77

0%

Chase

$656.77

$24.70

$681.47

3.76%

Citibank

$656.77

$0

$656.77

0%

HSBC

$656.77

$19.70

$676.47

3%

PNC

$656.77

$24.70

$681.47

3.76%

TD Bank

$656.77

$2.50

$659.27

0.38%

U.S. Bank

$656.77

$22.20

$678.97

3.38%

Wells Fargo

$656.77

$5

$661.77

0.76%

As you can see, those banks with international locations or partners fare much better than their counterparts. This is exacerbated even further when you lower the amount, since the fee per transaction remains fixed. Here’s the same scenario with a withdrawal of 100 Euros at a non-affiliated bank:

Bank

Currency Amount

Fees

Total

% markup

Bank of America

$131.36

$6.31

$137.67

4.8%

Capital One

$131.36

$0-$5.95

$131.36-137.31

0-4.5%

Charles Schwab

$131.36

$0

$131.36

0%

Chase

$131.36

$8.94

$140.30

6.8%

Citibank

$131.36

$5.94

$137.30

4.52%

HSBC

$131.36

$6.44

$137.80

4.9%

PNC

$131.36

$8.94

$140.30

6.8%

TD Bank

$131.36

$2.50

$133.86

1.9%

U.S. Bank

$131.36

$6.44

$137.80

4.9%

Wells Fargo

$131.36

$5

$136.36

3.8%

Again, let’s see what happens to those numbers when you use a partner/affiliated bank:

Bank

Currency Amount

Fees

Total

% markup

Bank of America

$131.36

$1.32

$132.68

1%

Capital One

$131.36

$0-5.95

$131.36-137.31

0-4.5%

Charles Schwab

$131.36

$0

$131.36

0%

Chase

$131.36

$8.94

$140.30

6.8%

Citibank

$131.36

$0

$131.36

0%

HSBC

$131.36

$3.94

$135.30

3%

PNC

$131.36

$8.94

$140.30

6.8%

TD Bank

$131.36

$2.50

$133.86

1.9%

U.S. Bank

$131.36

$6.44

$137.80

4.9%

Wells Fargo

$131.36

$5

$136.36

3.8%

You still see the banks with partners or locations abroad coming out ahead, and this time, it’s even better. That’s because the fixed fee portion of the transaction doesn’t change with the amount you withdraw, so smaller amounts will be less “efficient” so to speak. However, having a way to withdraw money without fees can allow you to take out as much or as little as you want. I experienced this very thing on my last trip abroad. My wife and I were short on Euros as we were leaving Paris last month, and we needed to take a cab to the train station. Because there was a BNP right down the street, I was able to withdraw just 10 Euros without any transaction fees. The transaction cost me $13.27. Had I been a Chase customer, that same withdrawal would’ve cost $13.27 + $5 + $5, or $23.27, over 75% more!

Capital One charges no ATM fees.
Capital One charges no ATM fees.

There are two clear categories of winners here:

-Banks that charge the same small (or non-existent) fee regardless of where you withdraw money: Capital One (no fees whatsoever) and TD Bank ($2.50 per transaction but no foreign conversion fees).

-Banks that have partners/locations abroad: Bank of America and Citibank (note that HSBC isn’t included here, since even HSBC withdrawals outside the U.S. incur a 3% foreign transaction fee)

Some international ATM’s won’t recognize PIN’s longer than four numbers.
Some international ATM’s won’t recognize PIN’s longer than four numbers.

A few other things to keep in mind:

1)   Regardless of which bank you choose, it’s essential that you call your financial institution prior to leaving the country to have them put a travel note on your account (and the same should be done with your credit cards). I’ve heard many horror stories of foreign ATM’s sucking in a debit card when the account is flagged for fraudulent activity.

2)   Some international ATM’s won’t recognize PIN’s longer than four numbers, so if you have a longer one, you may want to temporarily set a four-digit one while traveling abroad.

3)   Some international ATM’s also will not allow you to withdraw from non-checking accounts (savings, money market, etc.), so make sure that your cash is in your checking account before you travel or try to take money out.

At the end of the day, we all have different requirements in a banking relationship, and international ATM withdrawals likely only play a small part in your decision. However, be sure to take these fees into account when you are planning your travels, especially if you are visiting a destination where credit cards are not widely accepted.

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