This sneaky debit fee could cost you on your next foreign transaction
Ahh, hidden fees. Aren't they the bane of our existence? Additional costs tacked on our purchases are never welcome, whether they come from hotels or airlines or credit card issuers.
Related: Dynamic currency conversion, and why you should avoid it
You may know how to avoid the foreign transaction fees that are charged on certain basic credit cards. And you may even know to always pay in local currency when using your credit card overseas. But do you know about exchange rate mark-ups on cash withdrawals from foreign ATMs?
I didn't — at least until this morning. I'm currently in Chiang Mai, Thailand, and withdrew some extra baht from a nearby ATM in anticipation of my first-ever scooter rental.
Since my Schwab debit card refunds all of my ATM transaction fees, I never purchase foreign currency from a bank, either at home before my trip or in the local country upon my arrival. Instead, I use my credit cards until I need cash, then go to the nearest ATM and take out the amount I need in local currency.
I only needed about $30 to cover my expenses for the rest of my trip, so I quickly selected the "1,000 Thai baht" easy withdrawal option on the interactive touch screen while daydreaming about the Thai milk tea I was looking forward to ordering.
That brief moment of distraction was enough for me to overlook one unexpected line item on my final summary:
That's right: There was an additional column for "withdraw with conversion" on the right side of the screen, where my eyes are somehow more used to seeing final sums — especially in U.S. dollar rates.
I had used another ATM just a few days prior, which did not include currency conversion rates and had the "confirm" button also located on the right side of the screen. So I mindlessly pressed "accept with currency conversion" button, just in time for my brain to crash out of autopilot mode and register the words shining through the screen amidst the glare of reflected sunlight.
As you can see from the innocuous-looking green page in the photo above, the first thing you should notice is that the ATM withdrawal fee (called an "access fee" here), is a whopping 220 baht — or $7.79 by today's exchange rate. The second fee I paid was the "exchange rate mark-up," which was nothing more than a gratuitous 5.5% tacked on for no reason other than the convenience of seeing my transaction amount converted into my home currency.
This exchange rate mark-up is the debit card equivalent of dynamic currency conversion for credit card transactions, but I had never seen one before today and thus was not enough on my guard to watch for hidden fees.
This pricy oversight cost me 83 baht — about $2.75 in U.S. dollars — on a $33.16 ATM withdrawal. And that's even before factoring in the $7.79 access fee. All told, I paid just over $10 — more than 23% — for the privilege of getting to the cash I already own. Thank goodness for my Schwab card, which will refund me the $7.79 access fee.
Related: Debit cards that don't charge transaction fees
The $2.75 is a relatively cheap lesson fee to pay for the reminder to always read the fine print, even when I think I know exactly how the process works. (And now I'm sharing my class notes with you guys!) But it's also a good rule of thumb to remember what other hidden costs may be lurking behind familiar charges when overseas, and refresh your personal knowledge accordingly before your next international trip. Just think: If I had withdrawn 10,000 baht instead of 1,000, that mistake would have cost me an additional $27.50!
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.