When venturing abroad, it’s essential to have some of the local currency on hand. But did you know that using your ATM card outside the US can result in extra fees from your bank? If you’re not careful, you could end up paying multiple surcharges by using the wrong ATM or selecting the wrong cash withdrawal options.
Depending on where you are, you might be able to pay for most of your expenses with a credit card. Just make sure you pay with a credit card that doesn’t charge a foreign transaction fee. In addition, you need to avoid the dynamic currency conversion scam.
However, there are times when it’s helpful to have cash with you, like when we went to Germany to visit the Christmas Markets in 2019. While many shops took credit cards, if you bought over a certain amount, it was easier to buy food or drinks using cash.
Unfortunately, when we were looking for an ATM in Munich, the only ones we could find were from Euronet, which I knew were the most egregious scammers of all the ATMs. Fortunately, I have a debit card that insulates us from most of the inflated charges.
I wasn’t aware that my ATM card is one of the few that doesn’t charge a fee just for taking money out of an ATM outside of the US.
As it turns out, most US banks will charge a fee just for using your debit card to get cash from an ATM outside the US. Major US banks like Bank of America, Chase and Wells Fargo charge a flat $5 fee to withdraw money from an international ATM. That’s on top of any fees charged by the ATM and currency conversion fees.
So how can we avoid these fees when traveling outside of the US?
Fidelity Cash Management Account
Fortunately for us, I have a Fidelity Cash Management Account. Our Fidelity account works like any other online bank we’ve used for the past two decades. In addition, I’ve never paid a fee to use any ATM around the world and have received an instant refund of any ATM fee, no matter how high (including EuroNet fees and the $7 fee to get cash for the casino on a Royal Caribbean ship).
Your account will automatically be reimbursed for all ATM fees charged by other institutions while using a Fidelity® Debit Card linked to your Fidelity Cash Management Account at any ATM displaying the Visa®, Plus®, or Star® logos. The reimbursement will be credited to the account the same day the ATM fee is debited from the account. Please note that there may be a foreign transaction fee of 1% that is not waived, which will be included in the amount charged to your account.
Fidelity works for us because I have a Fidelity Rewards 2% cash back card and use Fidelity for my investments, but you can open a Cash Management Account with no fees and no minimum balance.
However, Fidelity isn’t your only option for an account with no international ATM fees. In fact, another bank is the consensus pick.
Schwab Bank Investor Checking
The Schwab Bank Investor Checking account has no fees or account minimums and offers unlimited ATM fee rebates worldwide.
FWIW, this sounds very similar to the Fidelity option. I’d feel good saying either is a good choice. I have personal experience with Fidelity not charging any fee to use ATMs in England, Ireland, Japan, Austria, Germany, and Vietnam and reimbursing any fees within 24 hours.
Other Options
While I’ve seen posts listing other accounts that don’t charge international ATM fees, many banks require keeping a minimum balance or charging a monthly fee. There are a few that seem to offer accounts with no international ATM fees while not charging monthly fees or having a minimum account balance. They include:
- Alliant High-Yield Checking Account ($20 monthly ATM credit)
- Betterment Checking Account
- Capital One 360 Checking Account
- USAA Classic Checking ($10 monthly credit, $25 initial deposit)
So there are five choices (six if you’re eligible for a USAA account from military service) where you can get an ATM card with no international ATM fees with minimal to no deposit limits or account fees. That means there’s almost no excuse to pay excessive international ATM fees if you regularly travel outside the US. Remember that you still may be responsible for whatever fee the ATM charges unless your bank reimburses you for those fees.
However, if you only plan on taking 1 or 2 trips outside of the US, you might be OK paying $5 for international ATM transactions. As long as you know, you’ll pay the extra fee every time you use an ATM that’s not in the USA.
But if you’re a frequent international traveler, it would be wise to have a bank account that doesn’t charge fees for using ATMs outside the US.
Cover Image by Peggy und Marco Lachmann-Anke from Pixabay
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6 comments
A good review article would be how to get money overseas. I know not all countries are the same. For now, I use credit cards that don’t have a foreign exchange fee and I bring a relatively small amount of US dollars to change for local currency.
My current strategy is:
Canada: exchange money in Canada. The VCBE in Vancouver (roughly 3 locations) gives a good rate.
The VCBE also gives decent exchange rates for selected major currencies, unlike banks or exchange places in the US
UK: exchange money at an exchange place outside Victoria Station London. I have my favorite one but there are several. Save enough cash for the next trip’s train or underground ride into London. All my paper money is outdated but it’s possible I have enough coins for one person to get to London.
Singapore: exchange money at an exchange shop near St. Andrew’s Cathedral. There are more than one place.
As one can see, it’s usually a money loser to exchange US dollars into foreign currency in the US.
Anyone can join USAA BANK, it is the insurance arm that requires military service.
Fidelity small print says they charge a 1% foreign transaction fee, which Schwab does not. Schwab only reimburses at the end of the month, though.
I believe the 1% fee is from VISA. Only a few banks, including Schwab, don’t charge that to the customer.
First Republic used to have no fees on ATM use abroad and no other foreign fees. Sadly when Chase took over last week – no such reciprocity
I came across First Republic when writing this post. Looks like with Chase, the only option without International ATM fees is Sapphire Checking but that requires a significant account balance or investments with JP Morgan.