Eliminate those nasty ATM fees
ATM fees can really add up, especially when you’re on the road. Think about this for a second. When you’re travelling, how often do you withdraw money? Say twice a week? Well with international ATM fees, which are the same all over the world, you’re going to pay about $5 per withdraw. Now do the math. That’s $10 a week. $40 a month. $520 a year!! Ok, so you decide that’s too much, and only make one withdraw per week – but that’s still $260 per year!
So the question is – why give these banks your money? In most cases, you worked hard to save it and it’s yours! It’s silly to give it to the banks like this.
Here are a few ways to rid of those nasty fees:
1. Choose a bank in the Global ATM Network. This is a network of large banks that have come together and waived fees to allow for free ATM withdrawals. While they have the highest fees ($5 per withdrawal) for banks outside their network, by using partner ATMs you can avoid the ATM charges all together.
Here is a list of some of the banks in this alliance:
Bank of America (US)
BNP Paribas (France, Ukraine)
China Construction Bank (China)
Deutsche Bank (Germany, Spain, Italy, Portugal, Poland, Czech Republic)
Banca Nazionale del Lavoro (Italy)
Santander Serfin (Mexico)
Scotiabank (Canada, Caribbean, Mexico, Chile, Peru)
Westpac (Australia, New Zealand, Fiji, Vanuatu, Cook Islands, Samoa, Tonga, Papua New Guinea, Solomon Islands)
ABSA (South Africa)
Make sure you check with your local bank on their coverage areas. There are some exceptions around where you can use your card, etc, etc., so better to be safe than sorry.
2. If you’re from the US, the best bank to use is Charles Schwab because they have no fees and they even reimburse all of your ATM fees at the end of each month! Keep in mind that you need to open a high yield checking account in order to qualify, but there’s no minimum deposit required and no monthly service fee. A Charles Schwab ATM card can be used in any bank machine around the world and you’ll never pay a fee for these withdraws. Using this bank can save you hundreds of dollars every year!
3. Find a card that has a low fee. HSBC charges only $2.50 per ATM transaction when you use a non-HSBC ATM. Paying nothing is better of course, but it’s half of what most of the other banks are charging. Also, Capital One doesn’t charge any withdraw fees either, but you still have to pay the fees charged by the local bank.
4. Check with your local bank or credit union – not charging ATM fees has become more popular over the last few years so make sure to ask.
Avoid paying credit card fees
So now let’s take a look at credit card fees. Most cards charge a 3% fee on purchases made overseas. This can really add up fast since many of us use our credit card for purchases all day long when travelling.
Here are a few cards that have no overseas transaction fees:
Chase Sapphire Preferred Chase Ink
Some credit cards allow you to collect points, which can come in handy down the road for everything from movie tickets to free flights and hotels. So, if you’re going to use a credit card, it might as well be one that earns you points on purchases.
Minimize the exchange rate penalty
Yes, that’s right – more charges coming your way! Did you know that every time you use your card abroad, your bank coverts the transaction into local currency for billing purposes and then adds a little to the top for themselves! So, the official rate that you see online is not what you’re actually getting. That’s the ‘interbank’ rate and only major banks get that rate!
Check out these tips on how you can get more out of your money conversion:
1. Use a credit card. Credit card companies get the best exchange rates around.
2. ATMs offer the second best exchange rate. They aren’t as good as credit cards as they are taking some off the top, but it’s much better than exchanging cash. Money exchange offices offer some of worst rates going as they can’t get the best rate and they are charging a commission on top as well.
3. Stay clear of those ATMs you find in strange places like outside of hotels or 7-11 stores. These machines are always going to charge some of the highest fees and have really bad exchange rates. So unless you really want to pay for convenience, stay away from these ones.
4. Don’t exchange your money at the airport as they offer the worst exchange rates going. Same goes for the ATMs at theses booths too.
5. When you use and ATM abroad, you’re going to have the option to be charged in your home currency or local currency. Always opt for the local currency as the conversion rate they will give you is going to be really low.
Other helpful tips
- Always carry cash – never assume you can pay with all your transactions with credit card because it isn’t possible everywhere, even at train stations and places of the such.
- Track your expenses and set a budget. Be aware of where your money goes. Writing it down may help you to point out where you are wasting some – both abroad and at home.
- Set up internet banking – this will help you manage your bank account while travelling and is a great way to keep track of your spending.
- Before you leave home get an extra ATM and credit card. Cards can get stolen, lost or eaten by machines. Having a back-up is a really good idea and you’ll be glad you did it if the time ever comes that you need it.
- Look into the ATMs where you are. For example, in Thailand almost all banks charge their own withdraw fees. All except Aeon – it may be a bit harder to find one of these machines, but if there’s one in your area, it’s going to save you the minimum $5 fee. Definitely worth it.
- Always notify your bank and credit card company that you are traveling abroad. If you don’t, they will often put a freeze on your account due to suspicious activity (ie overseas withdraws). This could put you in a sticky situation, as then you need to contact them by phone and get it sorted out. Much better off to make the quick phone call before you leave home.
So, as you can see, there’s a lot to consider when trying to play it safe with your money. But all it takes is a bit of time to get the right bank account and credit card, and then you could be on your way to living free of those ATM and credit card fees that drive us all crazy! Less to the banks and more towards your on the road adventure!