Credit cards are not as widely accepted when traveling in foreign countries, so it’s inevitable that you’ll need some cash from day to day. I’m often asked how to deal with getting cash when abroad, and the fact is that the easiest and most economical way to get cash is by using the ATM, Debit or Check card issued to you by your bank.
If you look at the back of your card, you’ll probably see a logo that says Plus, Cirrus or Maestro. These are the names of the international ATM networks, Plus being Visa’s network and Cirrus and Maestro being part of MasterCard’s network. So, for example, if your card has the Plus logo, it can be used at any ATM in the world that is designated as being part of the Plus network – and you’ll generally see this same logo somewhere on the ATM (have a look next time you use one). This means that getting cash while traveling abroad is simply a matter of finding the nearest compatible ATM, which is never too difficult as many are part of both networks. If you know where you’ll be staying, you can see if there’s one nearby by either using Visa’s ATM Locator if you have a Plus card or MasterCard’s ATM Locator if you have a Cirrus or Maestro card.
Withdrawing money from ATMs as you need it is not only safer than carrying a wad of cash with you, but it’s also more economical because you’re getting your money converted into the foreign currency using the exchange rates which the banks use with each other, thus avoiding the usual commission that’s inevitably built in to any currency exchange you perform at a currency exchange booth and at many banks. (If you think your local bank isn’t making money off of currency exchanges, the next time you’re in the bank, make a note of their rates and compare them with the exchange rates listed on www.xe.com.)
There is a catch here, and depending on your bank, it may be a big one. Some banks charge fees for using a foreign ATM which, in some cases, can be pretty high. Check out the FlyerGuide Wiki chart to see what your bank charges or ask your local bank what the fees are for making an ATM withdrawal abroad. Often the bank will charge between 1% and 3% of the withdrawal amount and sometimes an additional flat transaction fee. For example, if you have a Chase or Washington Mutual debit card and you make an ATM withdrawal in Europe, you’ll be charged 3% plus a flat $3 fee. If you have a Wells Fargo card, you’ll pay 3% plus a $5 flat transaction fee. A unique case is Bank of America, as with their cards you’ll pay 1% plus a $5 transaction fee, but the $5 transaction fee is waived at their partner banks worldwide, which include Barclays (UK), BNP Paribas (France), China Construction Bank (China), Deutsche Bank (Germany), Santander Serfin (Mexico), Scotiabank (Canada and Peru) and Westpac (Australia and New Zealand).
With some of those rates being as high as they are, there really may be no economical advantage to using your ATM card over doing cash exchanges. However, if you’re willing to move your money into a new bank, some offer a clear advantage when it comes to taking money out overseas and avoiding ATM fees. At present, that list includes Bank of Internet, Capital One, Schwab and TD Bank. Not only do these banks offer the possibility of ATM withdrawals abroad with no fees of their own, but they may also reimburse you (often within limits) for any ATM fees charged by the ATM-owner, which also makes them great for withdrawing cash in the US without having to worry about which ATM to go to. See the notes on the FlyerGuide Wiki chart for the particular details of each. Note that you usually need to keep a minimum balance in order to avoid account maintenance fees. If these balances are more than you’ve got, check with your local banks and credit unions to see what their rates are when withdrawing money from ATMs abroad, as they might have a deal that’s better for you.
Does your bank offer fee-free ATM withdrawals while traveling abroad? Leave a comment below and we’ll add them to the list.