Top ways to save on overseas ATM withdrawals

Apr 10, 2021

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Editor’s note: This post has been updated with new information.


No matter how much you plan ahead, you’ll often need to withdraw money in the local currency when you’re overseas. Of course, the U.S. dollar is accepted in some countries and you’ll always have a credit card on you. However, there might be situations where that will just not work — and the local currency is the only accepted form of payment.

Think of taxi rides, the corner store, tips and excursions — and much more. You never know when the need for cash (in the local currency) will come up, so it pays to be prepared by having a debit card that won’t charge exorbitant fees when taking cash out of the ATM.

So before you get on your next international flight, here are many ways to prepare in advance tof ensure you have cash on hand while overseas.

Know if your credit card charges ATM fees

Man in sunglasses using an ATM
(Photo by WAYHOME studio/Shutterstock)

There are plenty of reasons to hold and use travel rewards cards, but they shouldn’t be your go-to when it comes to withdrawing cash at the ATM. Even if you use a card with no foreign transaction fees, the ATM withdrawal will likely entail a large cash advance fee, as they consider the money withdrawn as a loan.

And it gets worse: There’s no grace period on cash advances, so you’ll be incurring interest charges from the day of the withdrawal, usually at a rate that’s even higher than the purchase rate.

Even if you are using a travel rewards credit card that refunds ATM fees worldwide, such as the Chase Sapphire Preferred Card, the money withdrawn is typically considered a cash advance. Although you won’t have to pay the ATM fee, the interest fees can quickly add up.

Look for a debit card that has no out-of-network fees, part of a large network and reimburses ATM fees

There are three ways you could be hit with fees when using your debit card overseas. First, your bank could charge you a fee for using an out-of-network ATM. Second, the bank that owns the ATM could tack on additional fees. Finally, you can be charged foreign transaction fees, just as with a credit card.

Avoid debit cards that charge out-of-network fees

Before you leave home, you’ll want to make sure you have a debit card that will not charge you any fees.

There’s nothing worse than being charged twice to use your ATM card at an out-of-network machine (once by your bank and once by the ATM owner). To avoid this, open an account that doesn’t impose out-of-network fees. One great option is to get a Capital One 360 Checking account. This card will not charge you any fees on withdrawals, even if it is out of network.

Related: The top 9 checking accounts for avoiding foreign ATM fees

(Photo by Vera Arsic/EyeEm/Getty Images)

Use a debit card that’s part of a large network

One way to avoid the fees from out-of-network transactions is to use a debit card that’s part of a large, international network.

One popular option for those traveling abroad is to have a SoFi Money Checking account. The debit card that comes with the account reimburses account holders at any of Allpoint’s 55,000+ network ATMs — available both domestically and abroad.

Related: 3 banks travelers should use to save money on fees

Find a card that reimburses ATM fees

Several banks and credit unions offer reimbursements for ATM fees charged by other banks. So even though your bank might not charge you a fee, you could be hit by the ATM’s operating bank. Fortunately, many banks will reimburse those fees — some up to a certain amount per month; others are unlimited.

A great option is the Schwab Bank High Yield Investor Checking account. With this debit card option, you’ll receive unlimited ATM fee reimbursements — both domestically and abroad. It’s also a great card to use abroad if you only have a credit card that charges foreign transaction fees, since this card waives those fees. We still recommend traveling overseas with a credit card that offers no foreign transaction fees so you can earn points and miles on purchases that you can pay for on your card.

Related: The best checking accounts

Watch out for foreign transaction fees

When you’re taking out smaller amounts of money, a 3% foreign transaction fee is far preferable to a $3 ATM fee. But if you need to withdraw hundreds of dollars outside of the U.S., you should look for a debit card with no foreign transaction fees. This includes debit cards from Capital One, Charles Schwab and Discover.

Avoid changing money at the airport

The Travelex currency exchange desk at Hong Kong International Airport. (Photo by Jeff Greenberg/UIG via Getty Images)

If there’s one place where you’re guaranteed to get the worst deal, it’s at the arrivals area of an international airport. Here, you’ll always find the largest ATM fees, the least-favorable exchange rates and the highest likelihood of being short-changed. Avoid exchanging money at international train stations and ferry ports as well.

What to know before using ATMs in different regions

Regardless of where you’re traveling, a general rule of thumb is to always use ATMs in public spaces where you feel safe and secure. Be sure to check the card reader for anything suspicious such as card skimmers, so you don’t become a victim of identity theft. Finally, always be aware of your surroundings when withdrawing money and entering secure personal information.

Here are some pointers for those traveling through different regions:

Europe

Similar to the U.S., ATMs are nearly everywhere and not too hard to find. Europe hasn’t completely adopted paperless payments in the way the U.S. has, so it’s always good to have some cash in your wallet when traveling through the region. This is especially important if you plan to travel to smaller towns or shop at local markets.

Middle East

Credit cards are generally accepted throughout the Middle East, but if you plan to go to smaller towns or certain countries — like Iran — you’ll want U.S. dollars or the local currency and a no-fee debit or credit card for backup. If you need to get cash out, you shouldn’t have any issues finding an ATM.

Asia

Cash is definitely still the main payment method in most Asian countries, especially in Southeast Asia. ATMs aren’t too hard to find, but that’s highly dependent on what country you’re in. U.S. dollars are sometimes more valuable than the local currency in countries such as Cambodia, Vietnam or Myanmar, so carry around some dollars for backup. Regardless, remember to pack a card that doesn’t charge foreign transaction fees and reimburses those ATM fees. If your debit card charges foreign transaction fees, make larger withdrawals in the local currency to minimize those add-on charges. Make sure to have a secure wallet to carry all of your cash in. Cash is also important as you’ll occasionally have to pay for certain visas with cash upon arrival.

Africa

You likely won’t run into any issues finding an ATM in the big cities, but you may not be so lucky when on the outskirts. The U.S. dollar is highly valuable across the continent. In fact, many national parks only accept the U.S. dollar or the European Euro, so you should come prepared with a decent amount of U.S. cash in an assortment of bills. The local currency is preferred in smaller towns, which you can withdrawal from a local ATM.

South America

Cash is king in South America and credit cards are not always accepted. You’ll definitely be making lots of ATM trips while traveling through the continent, so be sure to alert your bank about where exactly you’ll be traveling. The U.S. dollar is also commonly accepted, so it’s always good to have some dollars in case. Note that all 12 countries on the continent have different currencies, so you won’t want to take out too much of one currency if you plan to hop around.

Caribbean

U.S. dollars are the most widely accepted currency in the Caribbean, with the Euro and other local currencies behind it. Similar to traveling through other regions, it’s always good to carry around some cash in case, but credit cards are pretty widely accepted throughout the region. When you need to replenish your wallet, head to the ATM, as that’s where you’re likely to get the best exchange rate.

Note that if you’re traveling to Cuba, the cash situation is much different than the other islands. U.S. dollars are not widely accepted. In fact, if you try to convert U.S. dollars to Cuban Convertible Pesos (used by foreign visitors), you’ll often be charged a 10% commission by the government. Your best bet is to carry cash, since U.S. credit and debit cards are not accepted in the country.

Other tips for saving money on currency conversion

An ATM machine in Krakow, Poland. (Photo by Artur Widak/NurPhoto via Getty Images)

Never underestimate the power of the U.S. dollar

While it’s important to have local currency, you may receive a better effective exchange rate when using U.S. dollars. I’m often surprised by how much demand there is for U.S. currency in foreign countries, and I’ve had great success when offering to pay in dollars, especially at smaller stores and with merchants in a large bazaar. On the other hand, hotel operators and other large companies often impose their own exchange rates, which can be very unfavorable.

Be extremely careful in paying in the local currency

Dynamic Currency Conversion, or DCC, is a popular scam with merchants and credit card processors. Supposedly, this “service” offers you the opportunity to pay in your local currency, but it really just adds a huge commission. In theory, you’re supposed to be asked to agree to this “service.” Between language barriers and the merchant’s incentive to earn a commission, many travelers get duped into these inflated charges. This happened to me when Hertz in Italy fraudulently added a 4.5% commission to my bill, but I successfully received a refund when I contacted its executive customer service.

Always contact your bank before you go

The only thing worse than paying extra fees for an ATM transaction is having your withdrawal declined. Yet this can happen if you travel overseas without notifying your bank in advance and it suspects fraud. Before you leave, call your bank and provide a list of the countries you plan on visiting, even if you just have a layover.

Bottom line

There’s a time and a place to earn valuable points or miles by using a travel rewards credit card. Unfortunately, withdrawing money abroad is not one of them. By understanding the different ATM surcharges you could face and choosing the best debit cards to help you avoid them, you can access cash in other countries at little to no cost.

Additional reporting by Jason Steele

Featured image by Getty Images.

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