Joellyn Ross of Philadelphia, Pennsylvania, asked for recommendations of ATM cards that can be used in other countries without incurring exorbitant foreign-transaction fees. Subscribers’ selections and advice appear below.
Before you travel, it’s always wise to check with your financial institutions about charges you will incur when using an ATM in a foreign country. There are three types of charges to be aware of.
1. A premium on any foreign exchange — typically, this is 1%-3% on the amount you withdraw.
(This surcharge is often called a “foreign-transaction fee” or a “currency-conversion fee.” This is the fee charged when you make a purchase or a cash withdrawal in a foreign country. The credit card companies Visa and MasterCard each charge 1% of the amount to convert the foreign currency into US dollars, then most banks add an additional percentage onto that currency-conversion fee. Capital One is one financial institution whose cardholders pay NO foreign-transaction fee, not even the 1%. — Editor)
2. A per-use charge from your bank — typically, this is $5 at the big banks. Smaller banks and credit unions usually charge less, and some offer free ATM withdrawals at foreign ATMs, usually for a limited number of uses per month. (This surcharge is often called a “usage fee.”)
3. Charges by the owner of the ATM you are using — these vary widely around the world. It used to be easy to find no-charge ATMs, but more and more often I find charges of $3-$5 per use. It certainly adds up quickly. (You may see this surcharge referred to as a “non-[your bank] ATM charge.”)
Here are some ways around those high charges.
At large banks — if you are a preferred customer at your bank, you may have free ATM withdrawals at foreign ATMs.
For instance, having a Platinum account at US Bank, I can withdraw money from foreign ATMs without a per-use charge from US Bank. I will still be charged a foreign-exchange premium of 3% and have to pay any charges from the owner of the foreign ATM, which still seems like too much to me.
At your brokerage —I have both bank accounts and investment accounts with my E*Trade brokerage. E*Trade issued me a card (an “E*Trade Checking Visa Debit card”), which is the only card I use for getting money from foreign ATMs.
My account type allows me to withdraw money from my bank accounts via an ATM with no per-use charge but with a 1% foreign-exchange premium, and E*Trade reimburses me for any per-use charges from the foreign ATM owner. Many brokerages offer similar deals.
At credit unions and small community banks — many offer ATM withdrawals with no per-use fee, and some also reimburse you for charges by the foreign ATM owner.
If you travel a lot, it’s worth choosing a bank or credit union on the basis of charges for foreign use of ATMs, even if you only use that account for travel.
Kathie G. Larsen, Seattle, WA
The credit card and ATM fees normally charged for overseas transactions by credit/debit card issuers can be completely avoided by using Capital One for both your credit card and debit card. For international transactions, Capital One does not charge any type of fee for use of the credit card for purchases or for use of the debit card in ATM machines.
This approach requires that you establish two accounts with Capital One: a credit card account and a money market account. The debit card will be associated with your money market account.
When we travel internationally, we use both of these cards as our primary means of payment and to access cash. As backup, we take extra credit and debit cards from other accounts to use in the event that we are unable to use our Capital One cards for some reason, although we have never had a problem.
My husband and I have used this system since 2005, and we have never paid any foreign-transaction fees or ATM fees.
Adele Buttolph, Enterprise, OR
We use the Capital One Visa credit card. We have paid no foreign-transaction fees.
Linda & Peter Beuret, Santa Barbara, CA
Capital One offers an ATM card that does not charge foreign-transaction fees. I have used it several times, and there were no fees involved.
Also, Capital One credit cards do not charge foreign-transaction fees. Of course, if you use a credit card in an ATM, it will be considered a loan, and interest will be charged. I use the debit card in an ATM and the credit card for purchases.
Nancy E. Whitman, Lincoln, NE
I have an account with Capital One, whose ATM/debit card has no foreign-transaction fee. Of course, one must have an account at a bank.
Patricia Minami, Rockville, MD
I thought the fees were bad when I banked with Wachovia, but they’re even worse now that that bank has become Wells Fargo.
I have two accounts that I use for travel.
1. Although I have Capital One credit cards too, my ATM/debit card links to an interest-bearing, online, current account with Capital One Bank. This account has no foreign-transaction fees, and it refunds any charges made by foreign banks up to $25 per month. (Features of my Cap One account are not available in all parts of the country.)
2. My card with Coastal Federal Credit Union charges a 1% foreign-transaction fee. It also charges $1 per ATM withdrawal after the first five per month.
I use both of these cards only for making withdrawals from ATMs. (In my lexicon, an ATM card is for withdrawing cash from an ATM, and a debit card, while it can also be used in an ATM, is for making purchases.)
Kathy Wilhelm, Cary, NC
The cheapest card to use in a foreign ATM is the Capital One card. I have a Capital One debit card and a Capital One credit card. Both have no foreign fees.
A debit card that I have from PNC Bank also has no fees when used at an ATM, but it does have fees when used for purchases.
The best choice after those two — a debit card from a credit union usually carries only a 1% fee.
George Lauscher, Pocono Summit, PA
Although Capital One has no offices near me, I have moved to their credit card to avoid currency fees — and their exchange rates are good, too.
I also set up a Capital One High Yield Money Market account, requested a debit card for the account and linked it to accounts at my primary bank.
Money can be transferred over the Internet, but transfers take several days to hit the Capital One account. Usually, I keep $100 or so there, but, several days before traveling, I transfer in what I anticipate needing. Then I hit the cash machines at the arrival airport. Same great rates, and no fees!
Jack Brown, Chicago, IL
A Capital One High Yield Money Market account provides a debit card with which no fee is charged when it is used at Cirrus ATMs. It is also true that this card does not incur a foreign-transaction fee.
Wes Lingren, Bellevue, WA
I highly recommend Capital One, which does not charge any foreign-transaction fee.
Online, you can register your upcoming foreign travels with Capital One and get an e-mail confirmation as well as information about what to do if a card is lost, plus other assistance. We have found dealing with them to be excellent.
Sherry D. Gilson, Virginia Beach, VA
We recently changed our “travel” cards to Charles Schwab Bank, which adds no ATM charge anywhere in the world, and to Capital One’s no-foreign-transaction-fee card. This should save us somewhere between 2% and 4% on each trip.
Gary Backlund, Tahuya, WA
We have a Charles Schwab brokerage account and a Charles Schwab Bank checking account. This entitles us to an ATM card with no fees. Not only that, but they reimburse us for any fees charged by other banks, foreign or US.
You can check out their policy on www.schwabbank.com, under “Banking.”
John & Joan Deisinger, Allentown, PA
ATM cards linked to a Charles Schwab Bank checking account have no fee from Schwab, and you’re reimbursed for fees charged by the ATM’s owner. I have used them in Europe and Africa and have never had a problem with the fee reimbursement.
Carol Baker, El Paso, TX
We are former customers of Wells Fargo, which overwhelmed us with their foreign-transaction fees.
We switched to a fee-less Charles Schwab card. We have been very pleased and have used our cards all over the world without a fee.
G.B. Norall, El Cerrito, CA
I have been using the Schwab Bank High Yield Investor Checking account, which comes with a debit card. There are no foreign-transaction fees, and Schwab reimburses any ATM charges you incur. It has served me well.
Irwin Schatzman, Scottsdale, AZ
I was tired of being charged $3 to $5 each time I used an ATM outside my bank’s area. My solution was to open a savings account at Charles Schwab Bank.
The rate on the savings account is better than that of my home bank, and they give you a free Visa ATM card. They also rebate all ATM charges, both domestic and international. Also, the exchange rate they use for international transactions is very competitive. It really is ideal.
I have used my card in the USA and also in Asia, Europe and the Middle East with no trouble. I learned, however, to call them prior to traveling to notify them of my future locations; otherwise, their security might question the transactions.
Jamie Osborne, Kailua, HI
Banks in Argentina charge an ATM fee of $4 for each withdrawal, regardless of amount. However, when I use my Charles Schwab ‘’Schwab One Brokerage’’ Visa Platinum Check Card there, bank fees are waived.
Jerry Mendel, Buenos Aires, Argentina
I have two debit cards, and on one I get charged $3 for each purchase in a currency other than US dollars. But I called around and found the best deal to be at United Services Automobile Association.
USAA charges 1%, and they automatically reimburse any charge a bank makes for using the card. Also, banking can be done online or by phone.
Gary Ramsey, Kerrville, TX
If someone is lucky enough to have an account with United Services Automobile Association, their debit cards are fee free. I used mine throughout Africa without a problem or fees.
Bank of America was the next best I could find, and it wasn’t great.
Shelly Ross, San Francisco, CA
At an ATM, I would use either our local bank’s ATM Visa card or our Morgan Stanley/Smith Barney Financial Management Account MasterCard. Both of these are debit cards; the only fees incurred are the foreign-currency-conversion fees (1% and 2%, respectively), and the withdrawal is not considered a cash advance. I can put up with a conversion fee a lot better than a high-percentage cash-advance fee.
I found a fabulous card for our purposes, one with no foreign-currency-conversion fee (aka foreign-transaction fee); it’s the Chase Sapphire Preferred card. We got the card in January ‘12 and used it in India in March-April. The credit card statement showed no conversion/transaction fee, and the exchange rate was comparable to what we were receiving for travelers’ checks while in India.
One feature that I have benefited from with the Chase Sapphire Preferred card is their customer service. Each time I have called, a real human being has answered the phone (on the first ring). This is not the case with any of our other cards.
Yes, it costs a bit more than the Capital One card, but it also provides other perks, including the ability to transfer 1:1 points for miles to the frequent-flyer programs we use (United); bonus points (we got 50,000), and no fee for the first year. In addition, trip-delay/cancellation/interruption insurance is included. It’s a lovely deal.
After the first year, if the annual fee seems prohibitive, one can switch to a standard Sapphire Card with no annual fee (but with fees for foreign transactions).
I think some of these perks may be included with the Capital One card, but, for us, the ability to transfer points to miles is essential. For more info, visit the Chase Sapphire website.
Of course, I would never use a credit card at an ATM. The credit card issuer would treat the withdrawal as a cash advance and begin to charge interest immediately.
The only downside we have found with the Sapphire card is the physical card, itself. It’s a sexy navy blue, with very little writing on either side. If one places the card on a dark table or counter, it tends to be invisible and might easily get left behind.
In addition, there are no raised letters or numbers for the account information, so the card won’t work in some of the old-style machines vendors use when there is a power outage or no phone-line connection to the bank.
Jane B. Holt, Hinesburg, VT — (See update published in the October issue.)
I use a Visa debit card with Fidelity Investments. I have a “cash management account” called “mySmart Cash Account.”
At first (in 2009), a “fee” would appear on the statement and then a few lines later it would be credited back. Now, a fee does not even appear.
I have used this card all over the world (but not in Cuba, of course).
Fran White, Lincoln, CA
My credit union, LGE Community Credit Union, and most other credit unions are much more user-friendly than banks.
For people with established credit, my credit union’s Visa Platinum credit card offers a 25-day interest-free grace period for purchases; no annual fee; no fee for cash advances; the same rate for cash advances as for purchases; worldwide acceptance; optional Payment Protection, and a 1% International Service Assessment (ISA) Fee (foreign-transaction fee).
Other benefits include $500,000 travel accident insurance; auto rental collision damage waiver; lost-luggage reimbursement for checked bags; travel and emergency assistance services; $2,000 on trip cancellation/interruption protection per trip, and $300 in trip-delay reimbursement per ticket purchased.
As for using their Visa debit card in ATMs, it is accepted worldwide, with no annual fee, and the ISA fee is 1%.
Evans Harrell, Marietta, GA
I bank with First Republic Bank in California. I keep some amount of minimum balance, and all of the foreign ATM fees are waived. I also get a good currency-exchange rate.
I enjoy banking with First Republic, as they are very customer friendly.
Phyllis Bismanovsky, Mountain View, CA
At present, the original American Express Platinum card ($450 per year) has no foreign-transaction fees.
Paul Kastin, Atlanta, GA
With all the news about the big banks and their fees, I’m surprised anyone still has a checking account with a big bank. Credit unions are the place to go. Most charge either no foreign-transaction fees or extremely low (less than 3%) foreign-transaction fees.
Some banks and credit unions will charge a “noncustomer” fee, which generally is posted on the ATM.
One thing to remember is to call your bank or credit union PRIOR to leaving to let them know you will be traveling internationally and to ask them if there are any special conditions you need to be aware of.
For example, a friend of mine found out his credit union’s ATM card draws foreign funds from his savings account rather than from his checking account, so he made sure there was enough money in his savings to cover unknown expenses.
While you’re traveling, being in a different time zone than your bank or credit union may make trying to reach them an issue. Make sure you know their hours of operation and have their international telephone number (not their toll-free number, as that may not work internationally).
Many ATM machines in Europe and other locations have gone to using chip-and-PIN cards, a technology which many card-issuing banks and credit unions in the US have yet to start using. In a specific country or city, if you find yourself up against more and more chip-and-PIN ATM machines, then when you do find a traditional ATM machine you may want to withdraw a little more money than usual so you have pocket change. Better safe than sorry.
I also use an American Express credit card and, again, the foreign-transaction fees are low.
Bill Hutchinson, Signal Hill, CA
Are financial institutions which claim that they add no foreign-transaction fees telling the truth or not?
To find out, in April 2010 the people at the website Nerdwallet.com bought HK$15 at the same time with 10 different credit cards from leading US establishments. (The Hong Kong dollar is pegged to the US dollar and therefore fluctuates very little.)
The exchange rate was HKD1 = $0.129, so, in a straight exchange, HKD15 should have cost $1.934. For anyone using the card of a firm that claimed to charge no extra fee (like Capital One), that’s what was charged, but anyone who used a card of another firm actually paid up to $1.99, or 3% more ($1.99 - $1.93 = 6 cents, which is 3% of 1.93).
The firms that claimed to charge no foreign-transaction fees were truthful! In fact, Nerdwallet also found that none of these firms circumvented the zero foreign-transaction fee by increasing the currency-exchange rate.
For details, visit this website.
Philip Wagenaar, Contributing Editor, ITN