What are the best debit cards for ATM withdrawals overseas?
Dear Cashing In,
I appreciate your remarks on transaction fees charged when a traveler is out of the country. I escaped by getting a Chase Sapphire card. Still, I have to withdraw cash from an ATM when I am abroad. Do you have a past column that outlines some suggestions? Thank you. -- Robert
You're smart to use that Sapphire card for purchases overseas, since it charges no foreign transaction fee and gives you 2 points for every dollar spent on airfare, hotels, transportation and dining. But you're right: You need the right debit card for those ATMs.
Using debit cards to get cash overseas can be a bit tricky because ATM fees can arise from unexpected sources, and it's not always clear when you sign up for a card. Fees may come from the bank issuing the card, from the ATM itself or from card networks such as Visa and MasterCard. A few debit cards rise to the top when it comes to keeping these fees in check. Chase's are not among them at this point.
With a few exceptions, you're going to pay a fee to use an ATM not affiliated with your bank or credit union -- whether it's in the U.S. or abroad. Those fees can be pretty stiff, but there are ways to minimize additional fees that are often tacked on.
Banks and credit unions usually charge a flat fee for every international ATM withdrawal, ranging from $1.50 to $5. On top of that, many charge a foreign transaction fee based on a percentage of the amount withdrawn -- anywhere from 1 percent to 3 percent. Chase, for example, charges $5 per withdrawal plus 3 percent of the amount withdrawn. Bank of America charges $5 per withdrawal plus 1 percent on top of that -- unless you can find an ATM that's in the Global ATM Alliance, in which case they waive the $5 transaction fee. Wells Fargo charges a flat fee of $5 but no percentage.
How does that pan out? Let's say you make six $100 withdrawals from ATMs during a trip to Paris. With a Chase card, you'll spend $48 in fees to get that $600 in cash ($30 in flat fees plus $18 in conversion fees). The same $600 in withdrawals will cost you $36 with a Bank of America card ($30 in flat fees plus $6 in conversion fees) or $30 with a Wells Fargo card (flat fees only).
If you don't mind carrying around a wad of cash -- not something I'd recommend in most places -- a one-time withdrawal of $600 costs $5 on a Wells Fargo card. If you don't withdraw cash too often, a card that charges only a flat transaction fee trumps.
Capital One offers some of the best deals for overseas travelers. Not only does it charge no foreign transaction fees for any purchases made with its credit or debit cards, it also waives foreign transaction fees on ATM withdrawals. The Capital One 360 website does warn, however, that there may be a 1 percent fee from MasterCard. (Visa and MasterCard charge 1 percent for purchases in a foreign currency.)
Charges can also come from the ATM owner, depending on where you are. Usually this fee is noted on the machine before you make your withdrawal. Some online banking services will reimburse that, however.
Charles Schwab and E-Trade will reimburse owner-operated ATM fees if you meet certain criteria. Schwab's High Yield Investor account promises unlimited ATM fee reimbursements wherever its Visa Platinum debit card is accepted.
E-Trade will reimburse ATM fees for Max-Rate checking account holders if you have at least $5,000 left in your account after a transaction, or you have at least $50,000 in cash or securities in E-Trade accounts, or you make at least 30 trades per quarter in your E-Trade securities account.
Meet CreditCards.com's reader Q&A expertsDoes a personal finance problem have you worried? Monday through Saturday, CreditCards.com's Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.
Published: June 18, 2013
- You splurged for the Chase Sapphire Reserve card. Now what? – Use the card's points and perks before that $450 annual fee kicks in again ...
- Making the most of flexible airline rewards programs – Several programs allow transfers to airlines and hotels, and there may be more possibilities than you realize ...
- Save money on gas, at Costco and elsewhere – Using the new Citi Costco card can make sense at the pump, but there are other ways to save on gas ...