This sneaky debit fee could cost you on your next foreign transaction

Jan 2, 2020

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

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:

Katherine Fan for The Points Guy.

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!

Featured photo by Getty Images.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
17.24%-26.24% Variable
Annual Fee
Balance Transfer Fee
Recommended Credit
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.