Each semester, thousands of college students take to the skies to study in a foreign country.
The experience can be the highlight of a college career, but minor financial details can cause major headaches while you’re abroad.
1. Understand the fees.
Watch out for these two kinds of fees when you use a debit card in a foreign country:
Foreign transaction fee
- A percentage of the total transaction amount for purchases or withdrawals
- Typically 1% to 3%
International ATM fee
- A flat fee charged by your bank for each third-party ATM transaction
- Typically $2 to $5 — in addition to any third-party fees
Note that you can find some credit cards with no foreign transaction fees to avoid the extra cost.
2. Know your exchange rate.
When you spend money abroad, the exchange rate on local currency tells you how much your purchases will cost you in U.S. dollars, not including any fees.
Sites like X-Rates offer a currency converter that you can use to make quick comparisons between U.S. dollars and other currencies.
Keep in mind that rates fluctuate, so you may not be able to anticipate exactly how much a future purchase made in a foreign currency will cost you.
Also, some sites list separate “buy” and “sell” rates based on which currency you have (foreign or domestic) and which one you want.
3. Stick to your bank’s ATMs — or its shared ATM network.
To avoid some fees, use your bank’s own ATMs, if it has any where you’re going.
One of the largest U.S. banks, Citibank, is popular among travelers because it has 45,000 ATMs in more than 30 countries, including popular study-abroad destinations such as the U.K., Italy and Spain.
Some banks also belong to large international “ATM-sharing” networks. Through the Global ATM Alliance, for example, Bank of America customers can use ATMs at many popular international banks without getting charged BofA’s International ATM fee — or the other bank’s usual ATM fees for non-customers.
Even with networks like Bank of America’s, you may still be charged a foreign transaction fee for converting dollars into local currency.
4. Get a better bank.
Online banks can be good options for travelers. You don’t have to visit physical branches, and they typically have lower fees, too. Use our checking account tool to find one that’s a good fit.
If you expect a longer stay in a foreign country, you can also open an account at a bank there. You’ll have even better access to ATMs, and be able to make purchases more easily and with fewer fees.
(See our chart below for the names of the largest banks in several countries.)
There can be drawbacks to opening up a foreign account, however. You’ll probably be unfamiliar with how the accounts work and what you might be charged for, and it could be harder for your parents to make a wire transfer into your foreign account, depending on the country you’re in. This can be a major concern in case of an emergency.
5. Find out if you need a new debit card.
Many American debit cards may not work in Europe, Asia and Latin America, especially those that don’t have an EMV chip that help prevent fraud. Or some cards may work at one ATM, but not another.
If you don’t have an EMV card yet, check with your bank to see if you can get one.
>> MORE: How to choose a travel credit card
6. Protect yourself from fraud and identity theft.
You can become a victim of identity crime no matter where you are. To help avoid it while you’re traveling:
- Tell your bank you’ll be abroad. Include exact countries and dates, if you can, to help avoid having your card erroneously flagged for fraudulent activity.
- Bring a backup bank card, whether credit or debit, in case your primary card is put on hold or replaced.
- Keep your passport separate from your bank cards in case you need identification to open a new bank account.
- Leave a photocopy of your passport with a friend back home and keep another with you (but separate, just in case your actual passport is lost or stolen).
- Don’t carry a whole lot of cash with you on a daily basis. If you take out a large amount from an ATM to keep your ATM fees down, keep most of it in a secure location where you’re staying and only carry as much as you need for that day or night.
- Be careful at the ATM. Stick with machines in well-lit places, and leave if you notice anything suspicious.
It can also be a good idea to stick to trusted banking institutions when you need to get cash.
Here’s a list of well-known banks and currencies in common destinations for U.S. travelers:
Updated Aug. 7, 2015.