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

Updated May 24, 2018
Banking, Banking Basics, Checking Accounts
Foreign transaction fees
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Unexpected charges and fees can put a serious damper on a vacation abroad. When it comes to using your debit card overseas, understanding the fees involved with purchases and ATM withdrawals can help you plan appropriately and minimize your costs.

Just as with credit cards, you can incur charges every time you take out local currency from an ATM or pay with a debit card in a restaurant or a store.

» Best debit cards: The best debit cards are from banks with no foreign transaction fees and other perks. Skip ahead to see our debit card recommendations

There are two types of debit card fees you may face overseas:

  • Foreign transaction fee: This fee, also called a currency conversion fee, usually ranges from 1% to 3% of the purchase amount.
  • International ATM fee: Banks or credit unions typically charge a flat fee — often $1 to $5 — for using an ATM network in another country, plus a percentage of the amount you withdraw. The fee may or may not be the same as your institution’s out-of-network ATM fee.

When you use an ATM in another country, the owner of that ATM might have its own fee in addition to what your bank or credit union charges. Usually, there’ll be a notice to alert you to the charge so you’ll have an opportunity to cancel the transaction.

Some banks have low 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:

CapitalOne_logo_140x45








Foreign transaction fees

None




Foreign ATM fee reimbursement

None





Monthly maintenance fee

$0



Foreign transaction fees

None




Foreign ATM fee reimbursement

Yes, unlimited





Monthly maintenance fee

$0



Foreign transaction fees

Up to 1%




Foreign ATM fee reimbursement

None





Monthly maintenance fee

$0



See more banks with travel-friendly checking accounts

How to keep foreign transaction fees low

Credit unions tend to have lower international transaction fees than banks, often passing on to members the currency conversion charge from Visa and MasterCard, about 1%, without adding another fee. Banks, in contrast, may tack on an extra 1% to 2% to the card company’s cost.

But some large banks have branches and ATMs in foreign countries, where travelers may be eligible for free services. Others have partnerships with foreign banks that have similar benefits. Before you travel, check if your bank has an arrangement of that type at your destination.

For customers with premium checking accounts, financial institutions may waive certain fees, including international fees. Check the terms of your account or speak to a representative to find out your perks.

Before you leave the U.S., it’s a good idea to inform your bank or credit union of your travel dates so that when you ring up purchases in Paris or Tokyo, it won’t suspect identity fraud and freeze you out of your account.

Double-check the fees with your institution to make sure you understand the most economical way to use your debit card on your trip. 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

If you want your next trip abroad to be easier, it might help to have the right debit card for it.

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

BEST FOR REWARDS
Discover

at Discover,

Member, FDIC

Discover’s Cashback Checking1

  • 1% cash back on up to $3,000 in qualifying debit card purchases
BEST FOR ATMS
Bank of Internet USA

at Bank of Internet USA,

Member, FDIC

Bank of Internet USA’s Rewards Checking

  • Unlimited ATM fee reimbursements in the U.S.
BEST FOR TRAVEL

Charles Schwab Bank’s High Yield Investor checking

  • Unlimited ATM fee reimbursements worldwide
  • No foreign transaction fees

Capital One’s 360 Checking

  • No currency conversion or foreign ATM fees
  • Ability to lock debit card from the mobile app
BEST FOR AVOIDING OVERDRAFT
Simple

at Simple,

Member, FDIC

Simple’s Fee-Free Checking Account

  • No overdraft or non-sufficient funds fees
  • Safe-to-Spend budgeting tool linked to debit card