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May 27, 2010. Like a good Cheapo, you’re planning to avoid currency exchange counters and head for the ATM upon arrival in Europe. But if you’re American, we have a couple of questions for you.
How much does your American bank charge to withdraw money from a foreign ATM? Do they take a percentage? What’s the foreign transaction fee applied by your credit card? How about your other credit card?
I know, just about anything would be more fun than an hour spent on the phone with your bank and credit card companies before leaving on a trip. But ignorance is not bliss, dear readers! Before heading to Europe there are a number of questions about foreign transaction charges and ATM fees that American travelers should absolutely ask their banking institutions.
This information is quite dynamic, as US banks have recently been changing their fee structures in an attempt to recover lost profits following a couple of rocky years. Thus, even if you called before your last trip, call again. Things may have changed.
Ready to call? Here’s our “cheat sheet” for what to discuss with your bank:
Tell your bank about your trip.
First, the basics: Call your bank and credit card companies to tell them that you’ll be traveling abroad. This is important for them to know, as foreign charges and ATM withdrawals may signal an internal “red-flag” and could result in your account being frozen. That’s really not something you want to deal with from, say, the cobblestone streets of Florence.
Your bank will probably ask for the duration of the trip and may ask which countries you’ll be visiting. It’s a good idea to ask them for a phone number to call from abroad, should any banking concerns arise (many cards have this information printed on their back).
That’s the easy part. Now let’s get into the fees.
Q: Does your bank charge a foreign ATM withdrawal fee? Do they charge a percentage of the withdrawal? Both?
This will vary widely among banks, however many charge between $1.50-$5 per withdrawal AND add a foreign transaction fee of 1-3%. However, some banks will only charge a flat fee and others may only charge a percentage. To illustrate how widely these charges differ between banks, we hunted down the ATM withdrawal charges yesterday at some of the country’s most popular banks. Here’s what we found:
Bank of America: $5 fee per ATM withdrawal plus 1% currency conversion fee (or no ATM fee plus 1% for withdrawals from Global ATM Alliance). Read more on Bank of America’s Web site.
Citibank: 3% currency conversion fee per withdrawal. For more information, see Citibank’s Web site.
Chase: $3 ATM charge plus 3% currency conversion fee per withdrawal (or no ATM charge plus 3% fee for premium accounts). For basic account charges, read the small print on Chase’s Web site.
HSBC: $1.50 ATM charge per withdrawal. No currency conversion fee (and no fees at all for premium accounts). For more information, try to digest this PDF from HSBC’s Web site — or call and speak to a representative.
Wells Fargo: $5 ATM fee per withdrawal. No currency conversion fee. More information on Wells Fargo Web site.
These rates were found on May 26, 2010 and could change at any time. Please check with your bank to find current fees and charges.
Q: Does your bank charge a foreign transaction fee for debit card charges?
Just as ATM fees vary widely, debit card charges are all over the place. For the most part, however, the bank will assess a foreign transaction fee and most hover around 3%. In some cases, it’s slightly less. We’ve also heard of banks charging both a foreign transaction percentage AND a flat-fee for debit charges.
After talking to your bank, call and ask your credit card company the same questions.
Q: Does your credit card charge a foreign transaction fee?
For most credit cards, the answer will be yes. It’s often around 3%, but, like everything else, it varies from card to card.
Notably, the Capital One credit card does not charge any foreign transaction fees for purchases abroad, which has made it quite popular with travelers. (For more information, see Capital One’s Web site.)
Q: What does your credit card charge for cash advances?
Most cards will charge a percentage of the cash advance, plus any other fees that your card would normally charge for an advance. Some banks also set a minimum cash advance fee.
Some more points to keep in mind
* Many US banks have now started charging foreign exchange fees for purchases made with foreign companies even if you’re still in the US. For example, if you purchase a Ryanair (based in Dublin) flight online from your office in Detroit, you may still pay a 3% foreign exchange fee, even though you hadn’t left the country.
* Many foreign ATMs have only numbers on their keypads. If your PIN (security code) also uses letters, figure out the numerical equivalent before you head over.
* Foreign ATMs may only permit you to withdraw cash from your checking account, and may not allow access to savings or other accounts. It’s wise to beef up the checking account before heading over — and know how to log in to your account online, in case you need to transfer more cash into your checking account.
These calls are a bit tedious, but, as many of us travel with multiple credit or debit cards, it’s vital that you know the terms for each card.
You’ll probably find that your cards have different fee structures that you can work to your advantage. For example, if an ATM card charges a flat-fee without a percentage for each withdrawal, make fewer withdrawals and take out more euros each time. If one of your credit cards has a lower foreign transaction fee, it’s an obvious choice to use on the road.
The bottom line is this: Call your bank and credit card companies before heading over. When you get your statements later, there won’t be any surprises. (Well, at least from the fees… Impulse purchases are another story.)
Your questions and money advice
What other questions do you ask your bank before leaving? What have you learned from your ATM and banking experiences abroad? Tell us about it in the comments section below!