How to Avoid Foreign ATM Bank Fees While Traveling
Cash is still king. The more you travel the more you’ll notice that some countries accept cash only as a form of payment. A lot of the Asia countries only accept cash in their stores. Sometimes you can’t avoid having to withdraw small amounts of cash.
This is where the dreaded ATM fees come into play. All of the big name banks; Chase, Bank of America, and Wells Fargo have an ATM fee when withdrawing abroad. Not only are they going to charge you $2 – $5 per transaction they will charge an additional 3% foreign exchange fee. Fees can easily start to add up. This post by ValuePenguin gives a great detail of how much does each of the banks charge. Now how do you expect to workaround this?
You have to open up a checking account that avoids foreign ATM fees.
Best ATM card to withdraw cash
ATM machines certainly give you the best exchange rate. So having the right ATM card is essentially in avoid foreign ATM Bank Fees.
Open either a Fidelity Cash Management Account or a Charles Schwab High Yield Checking Account. Neither charge fees for ATM withdrawals. But it gets even better than that. Both accounts refund fees charged by other banks at ATM machines anywhere in the world.
I have had both the Fidelity account and Charles Schwab account. I can attest to both of their awesomeness. So far Fidelity and Charles Schwab has reimbursed me for every ATM fee I’ve ever been charged.
Having said that, I would suggest Fidelity account over the Schwab card. Charles Schwab requires a hard inquiry to open the account. Thus, having a hard pull is sometimes not worth opening the account.
While Fidelity states in their Terms & Condition that they’ll charge 1% on each foreign currency. The 1% FOREX fee is only for purchases made on the card, but ATM cash withdrawals are not charged the additional 1%. So as long as you don’t use the card for purchases the you won’t be hit with the FOREX fee.
With that in mind, here are two checking accounts with more information that I highly recommend getting since they will allow you to avoid ATM fees when withdrawing money internationally.
- Charles Schwab High Yield Investor Checking Account
- Unlimited ATM fee rebates apply to cash withdrawals using your debit card wherever it is accepted. ATM fee rebates do not apply to any fees other than those assessed for using an ATM to withdraw cash from your Schwab Bank account. Schwab Bank makes its best effort to identify those ATM fees eligible for rebate, based on information it receives from Visa and ATM operators. In the event that you have not received a rebate for a fee that you believe is eligible, please call a Schwab Bank Client Service Specialist for assistance at 888-403-9000. Schwab Bank reserves the right to modify or discontinue the ATM fee rebate at any time.
- The Schwab Bank High Yield Investor Checking Account®, with a minimum balance of $0.01, offers a 0.06% annual percentage yield (APY) as of 04/07/2015. This rate is variable and may change without notice.
As mentioned above, you as a cardholder will receive full reimbursements at the end of every month for any ATM fees incurred. On top of that your balance in the checking account will earn a 0.06% APY.
- Fidelity Cash Management Account
- All Fidelity ATM withdrawal fees will be waived for your Fidelity® Cash Management Account. In addition, your account will automatically be reimbursed for all ATM fees charged by other institutions while using a Fidelity® Visa® Gold Check Card linked to your 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, there is a foreign transaction fee of one percent that is not waived, which will be included in the amount charged to your account. The Fidelity® Visa® Gold Check Card is issued by PNC Bank, N.A. and the check card program is administered by BNY Mellon Investment Servicing Trust Company. Those entities are not affiliated with each other or with Fidelity Investments. Visa is a registered trademark of Visa International Service Association, and is used by PNC Bank pursuant to license from Visa U.S.A. Inc.
- The Cash Balance in the Fidelity Cash Management Account is swept to an FDIC-insured account at one or more Program Banks where it earns a variable rate of interest.
Be sure you select withdrawal and checking account from the ATM. Several readers have noted being charged a processing fees of 1-3% by Visa. Due to the withdrawal being processed as cash advance.
What are other ways you avoid foreign currency fees while traveling?