Traveling abroad is costly enough. But unexpected debit card fees can make matters worse, eating up good money that’s better spent elsewhere on a trip.
When it comes to using your debit card overseas, knowing the costs involved can help you minimize expenses. It also helps to shop around for the best card for your situation.
Foreign ATM and transaction fees
Just like using a credit card in a foreign country, you can incur charges every time you take out local currency from an overseas ATM or pay with a debit card in a restaurant or a store. There are two types of debit card fees you may face abroad:
Foreign transaction fee: Sometimes called a currency conversion fee, this applies for foreign transactions made with a debit card. It usually ranges from 1% to 3% of the purchase amount. Foreign transaction fees for credit cards work similarly.
International ATM fee: Banks and credit unions typically charge a flat fee — often up to $5 — for using an ATM network in another country, plus a percentage of the amount you withdraw. This fee may be a different amount from your institution’s domestic out-of-network ATM fee.
Look for banks with no- and low-fee options. Some banks and online institutions have accounts that are friendly to travelers. They may have no foreign transaction fees or traveler-friendly ATM fee reimbursem*nts on international ATMs.
Find banks with international networks. Some institutions have partnerships with banks in other countries so travelers can use their ATMs and not pay out-of-network fees. Before you travel, you can check to see if your bank has an arrangement of that type.
Consider upgrading your bank account. Banks may waive foreign transaction fees for customers who have premium checking and savings accounts. They may also waive ATM fees worldwide. However, these types of accounts tend to have high monthly fees — as much as $35 — with a minimum balance requirement of several thousand dollars to waive the fee. Try to find a non-premium account that waives ATM fees worldwide without huge monthly fees.
Avoid freezes. Before you leave the U.S., it’s a good idea to inform your bank or credit union of your travel dates. That way, when you ring up purchases in Paris or Tokyo, your bank won’t suspect identity fraud and freeze you out of your account. It won’t do much good to have a debit card with low fees if you have to use another form of payment because your account is frozen.
Before leaving for a trip, check with your institution to make sure you understand the most economical way to use your debit card. If the foreign transaction fees seem too high, especially if you’re going to travel frequently, consider opening an account at a more travel-friendly bank.
Visit your My NerdWallet Settings page to see all the writers you're following. Foreign transaction fees can add up fast when using your debit card abroad. The fees are often 1% to 3% of the amount of a purchase, and many banks also apply the fee to ATM withdrawals.
Foreign transaction fees are charges that credit card issuers, banks and other financial institutions impose when you use an electronic payment card to make a purchase in a foreign country or to buy goods and services in another currency. You can incur these fees whether you're using a debit card or a credit card.
A foreign transaction fee is typically calculated by adding the predetermined fee percentage charged by your credit card issuer to a purchase made with a foreign merchant to the cost of the original purchase.
The best way to avoid foreign transaction fees is to acquire a no-foreign-transaction-fees credit card, if you qualify for one. Next in line are checking accounts or debit cards with no foreign transaction fee. It is also possible to avoid the fee by paying in the local currency for purchases.
This is the exchange rate used by Visa to convert the transaction into sterling on the day Visa processes the transaction. This might not be the same day when the transaction took place. A 2.99% fee charged by us for using your debit card abroad when making purchases, withdrawing cash or for refunds.
As long as you have a credit card with no foreign transaction fees, notify your credit card company of your travel plans, and only pay for purchases expressed in terms of the local currency, you should be able to avoid post-trip credit statement surprises.
Best Credit Cards With No Foreign Transaction Fee of June 2024. Discover it® Cash Back: Best feature: Cash back on everyday purchases. Discover it® Miles: Best feature: Travel rewards. IHG One Rewards Traveler Credit Card: Best feature only: Bonus points at IHG hotels.
You can link these cards with your existing bank account to ensure hassle-free transactions abroad. These cards can come in handy not only in foreign transactions but also when it comes to buying something from an international website, pay for an app, signing up for Netflix, etc.
Foreign transaction fee: Sometimes called a currency conversion fee, this applies for foreign transactions made with a debit card. It usually ranges from 1% to 3% of the purchase amount. Foreign transaction fees for credit cards work similarly.
Whether you should use a debit card for travel depends on your own circ*mstances. For instance, you should avoid using a debit card in another country if you'll be hit with high foreign transaction fees and ATM fees.
3.5% + applicable taxes on foreign currency transaction carried out on Debit Cards. The exchange rate used will be the VISA/MasterCard wholesale exchange rate prevailing at the time of transaction/merchant settlement.
Not all credit cards charge a foreign transaction fee, but many do. To find out if your card does, check the “fees” section of the terms and conditions for your card.
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