Nobody likes paying unnecessary fees, especially while traveling. Hidden bank charges can eat into your travel budget fast. If you’re not careful, you might pay more in fees than on experiences. Knowing how to avoid paying bank fees while traveling can save you hundreds of dollars. The best part? It’s easier than you think.
I once traveled to Europe and withdrew cash from an ATM without checking the fees. Later, I saw a $7 charge for a single withdrawal. It was frustrating! Since then, I’ve learned ways to cut costs and avoid unnecessary charges.
What is an ATM Foreign Transaction Fee?
Banks charge foreign transaction fees when you use an ATM or card abroad. These fees vary by bank and country. Some banks charge a flat rate, while others take a percentage of your withdrawal. These small charges add up quickly and can become a significant expense.
Credit cards also come with foreign transaction fees. If your card isn’t travel-friendly, you might pay an extra 3% on every purchase. That’s a lot of money lost on simple expenses like food, shopping, and entertainment.
8 Ways to Avoid Sneaky Bank Charges When You’re Overseas
If you want to travel smart, you must reduce these fees. Here are eight proven strategies to keep more money in your pocket.
Eliminate ATM Fees
ATMs are the easiest way to access cash while traveling. But they can be expensive if you’re not careful. Some banks charge up to $5 per withdrawal, plus additional conversion fees.
Some banks refund foreign ATM fees. Check if your bank offers this perk. If not, consider switching to one that does. Charles Schwab and Revolut both waive international ATM fees.
Another tip: Withdraw more significant amounts at once. Making multiple small withdrawals means paying fees every time. One large withdrawal keeps costs low. It also reduces the number of times you need to visit an ATM, making you less vulnerable to card-skimming scams.
Avoid Credit Card Fees
Many credit cards charge foreign transaction fees. This extra cost makes every purchase more expensive. The solution? Use a travel-friendly card.
Look for credit cards with no foreign transaction fees. Capital One and Chase Sapphire Preferred are great options. They let you spend abroad without extra charges. These cards also offer travel rewards, cash back, and other perks.
Another tip: Always notify your bank before traveling. If you don’t, your transactions might get flagged for fraud, and your card could be temporarily blocked. That’s the last thing you want while traveling.
Minimize the Exchange Rate “Penalty”
Currency exchange services take a cut when you convert money. They offer worse rates than banks. That’s why you should avoid airport exchange booths and hotel currency desks.
Instead, use an ATM from a reputable bank. Banks offer better exchange rates than money changers. You’ll get more local currency for your dollars. Another trick is to use a multi-currency debit card, which I’ll discuss later.
If you must exchange cash, compare rates at multiple places. Some exchange offices offer better deals than others. Always ask about hidden fees before exchanging money.
Don’t Change Money at Airports
Airports are convenient, but their exchange rates are terrible. I once exchanged $100 at an airport and lost almost $15 in fees.
The rates are always inflated, and service fees add up quickly. Avoid these kiosks at all costs. Use an ATM or a local bank instead.
If you arrive at a destination without local currency, withdraw a small amount from an airport ATM and find a better exchange option later. Never exchange large amounts of money at airports.
Always Pick the Local Currency
When using your credit card abroad, you’ll have the option to pay in your home currency or the local one. Always choose the local currency. Why? Banks and merchants charge extra when converting for you. This is called dynamic currency conversion, and it’s a rip-off. The real exchange rate is better. Stick with local currency to avoid hidden markups.
This trick applies to both credit cards and ATMs. When withdrawing cash, decline any currency conversion offered by the ATM. Your bank will process the transaction at a better rate.
Get a Multi-Currency Debit Card
Traditional banks charge fees for international transactions. A multi-currency debit card helps you avoid those fees. Wise and Revolut offer cards that allow you to hold multiple currencies. You can convert money at the best exchange rate before you travel. Then, you can spend without extra fees.
These cards also offer additional benefits. They allow you to lock in exchange rates, protect against currency fluctuations, and withdraw money from ATMs with low fees.
This method saves money and makes spending abroad seamless. It’s one of the best ways to cut travel costs.
Join Airline Clubs
Some airline loyalty programs offer free access to airport lounges. Many lounges provide free Wi-Fi, food, and even ATMs with lower fees.
If you travel often, consider joining an airline club. American Express and Priority Pass offer programs that include lounge access. These perks help cut costs and make traveling more comfortable.
Some premium credit cards also offer lounge access. If you have a travel credit card, check if it includes this benefit.
Always Make Payments in the Local Currency
Many travelers don’t realize this trick. You may be asked if you want to pay in your home currency when paying by card. Never do this.
Local currency payments offer better exchange rates. Merchants and banks add unnecessary conversion fees if you choose your home currency. Always select the local option to save money.
Another tip: Choosing the local currency is still essential if you use a digital payment service like Apple Pay or Google Pay. The same hidden fees apply.
Conclusion
Hidden bank fees can ruin your travel budget. But you don’t have to accept them. By planning, you can keep more money for experiences, not fees. Use no-fee credit cards, withdraw money wisely, and avoid alarming exchange rates. Travel smarter and spend your money where it matters most. If you’ve ever been hit with surprise travel fees, share your experience in the comments!
Also Read: Best Places for Black Digital Nomads 2024
FAQs
Check with your current bank first. If they charge fees, consider switching to Charles Schwab or Revolut.
Yes! A travel credit card saves money by eliminating foreign transaction fees. Many also offer rewards and travel perks.
It’s not necessary. ATMs usually offer better exchange rates than money changers. Just use a no-fee card.
Use a credit card with no foreign transaction fees. If you need cash, withdraw from an ATM that refunds fees.
Yes, but use ATMs in banks or well-lit areas. Avoid standalone machines in tourist hotspots to prevent fraud.
