Foreign Transaction Fees: What It Costs to Use a Debit Card Abroad

Foreign Transaction Fees: What It Costs to Use a Debit Card Abroad

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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.

» Skip ahead to see our recommended best all-around debit cards.

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.

  • 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.

The machine owner may also have its own ATM fee in addition to what your bank or credit union charges, generally a similar amount.

Don’t want to pay? ATMs typically provide a notice of the charge so you’ll have an opportunity to cancel the transaction.

Some banks have low foreign transaction fees or none at all, or will even reimburse you for fees charged by other banks when you use foreign ATMs. Here are some examples:

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How to keep foreign transaction fees low

Look for banks with no- and low-fee options. Some banks and online institutions, like the ones shown above, have accounts that are friendly to travelers. They may have no foreign transaction fees or traveler-friendly ATM fee reimbursements 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 $25 — with a minimum balance requirement of several thousand dollars to waive the fee.

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.

» RELATED:

Best debit cards

Here’s a look at several checking options with debit cards that earn rewards or help you avoid fees.

Discover Bank Discover Bank Cashback Debit
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Best for rewards: Discover's Cashback Checking

  • 1% cash back on up to $3,000 in qualifying debit card purchases.

Cashback Debit details from Discover: "ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, peer-to-peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as Venmo® and PayPal™, which also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries."

Axos Bank® Axos Bank® Rewards Checking
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at Axos Bank®, Member FDIC

Best for ATMs: Axos Bank's Rewards Checking

  • Unlimited ATM fee reimbursements in the U.S.

Schwab Bank Schwab Bank High Yield Investor Checking®
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Best for travel: Charles Schwab Bank's High Yield Investor Checking

  • Unlimited ATM fee reimbursements worldwide.

  • No foreign transaction fees.

Capital One Capital One 360 Checking®
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Best for travel: Capital One's 360 Checking

  • No currency conversion or foreign ATM fees.

  • Checking account has no monthly fees and earns a small amount of interest.

Simple Simple Account
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Best for avoiding overdrafts: Simple’s Fee-Free Checking Account

  • No overdraft or non-sufficient funds fees.

  • Safe-to-Spend budgeting tool linked to debit card.

Do you know where your money is going?

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