11 Ways to Avoid Bank Fees While Traveling

By Nick Wharton on 8 July 2016 0 comments

The worst thing to get charged for when you're on vacation is a fee for using your own money. Even worse, there are fees you may not even know existed until you return home and check your statement. They're not all small fees, either. Some of them can be as much as $7 per transaction.

Imagine if over the course if your trip you visited the wrong ATM 10 times and ended up with $70 worth of fees. Fear not, though. I'll go over the most common fees you may run into on the road and show you how to avoid them.

ATM Fees

ATMs are probably going to be your biggest enemy when it comes to overseas bank fees. Most American banks will charge you between $5–$7 per overseas ATM withdrawal. If you travel a lot or take out money frequently while on the road, these can quickly add up.

The best way to save money on bank fees is to do a little bit of preplanning before your trip. You have a couple of options that can help you eliminate ATM fees.

1. Capital One 360

Capital One 360 Checking account holders can use any ATM without incurring usage or foreign transaction fees. This is an online only account (which is why it has no fees), but it even earns interest. Those are two big bonuses for anyone who travels internationally frequently.

2. Charles Schwab

Charles Schwab accounts have no fees and they reimburse all your ATM fees at the end of each month.

You have to open a high-yield checking account in order to qualify, but their debit card can be used in any ATM around the world and you'll never pay a cent in bank fees. There is no minimum deposit required and no monthly service fee either.

3. TD Bank

With the TD account, you are charged a flat $2.50 fee for ATM withdrawals and no foreign transaction fees.

4. Global ATM Alliance

A group of international banks have come together to form the Global ATM Alliance. Basically, any customer who holds an account with a participating bank can take out money from any associated ATMs without a fee. Note that while you won't be charged for using a member bank ATM, you may still get charged foreign transaction fees based on the amount you withdraw. Make sure you check with your bank precisely what their fees are.

The Global ATM Alliance includes the following banks:

  • Bank of America (United States)
  • Barclays (England, Wales, Spain, Portugal, Gibraltar, and certain countries in Africa)
  • BNP Paribas (France, Ukraine)
  • China Construction Bank (China; Bank of America card holders only)
  • Deutsche Bank (Germany, Poland, Czech Republic, Spain, Portugal, and Italy)
  • Banca Nazionale del Lavoro (Italy)
  • Santander Serfin (Mexico; Bank of America card holders only)
  • Scotiabank (Canada, Caribbean, Peru, Chile, and Mexico)
  • Westpac (Australia, New Zealand, Fiji, Vanuatu, Cook Islands, Samoa, Tonga, Papua New Guinea, and Solomon Islands)
  • ABSA (South Africa)
  • UkrSibbank (Ukraine)

5. Avoid Credit Card Fees

Many credit cards charge a 3%–5% fee on any purchase made overseas. Think about that for a second. If you go on a two-week family vacation and spend $6,000 out of country, you would end up paying $180 in fees. Luckily, not all credit cards charge this fee, so choosing the right credit card for travel can save you a lot of money on the road. (See also: Best Travel Rewards Credit Cards)

A Few Extra Tips

Take a few other extra steps to make sure you aren't spend a few more extra dollars every time you reach for more cash.

6. Don't Use Random ATMs

While it may be convenient to use the ATM at your hotel or at the corner store, these are typically the ones that will cost you the most in fees.

7. Don't Exchange Money on the Street

Sometimes it's tempting to exchange money with the random guy outside the bank or the people standing around at border crossings. Don't! You may think that they have better rates than the bank, but they're usually scammers. Best case scenario, you get a bad exchange rate, worst case ... you get completely ripped off.

8. Avoid Currency Exchange Booths

While not quite as bad as the hustlers on the street corner, currency exchange booths are the next worst thing and typically have horrible exchange rates, especially ones located in airports.

9. Exchange With Other Travelers

If you end up with a bunch of extra local currency at the end of your trip, consider selling it to another traveler for USD. You'll probably get a better rate and you can avoid all bank and conversion fees this way.

10. Always Pick the Local Currency

Oftentimes when you use your credit card abroad, the machine will give you an option to use your home currency. Don't do this. They will usually charge you a worse conversion rate than your credit card if you just use local currency.

11. Download the XE App

It's always best to know the exchange rate for the country you're traveling to. The XE Currency App is a handy little app will automatically update every day with the exact exchange rate.

How do you access cash when you travel — and avoid bank fees?

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TD bank charges a flat rate of 3.00 for ATM fees, not 2.50, with no foreign transaction fee. - Mark D. (Banking specialist, TD Bank)