So how do you use a foreign ATM without getting hit with a lot of fees?
Well in this video I am going to break down how you can avoid most
or all these fees when traveling in a foreign country.
So let's get to it!
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So the first fee you might get hit with when using a foreign ATM
is called a Home Bank fee
So your bank is probably going to charge you a fee each time you use a foreign ATM
Unless you are using a branch of your bank
Now you may be able to avoid this fee
by switching to a higher end account with your bank
that allows for unlimited foreign ATM fee withdrawals
But typically you will need to maintain a certain balance to avoid the monthly charge.
But it may be worthwhile to you if you plan on taking a lot of international trips
The next fee you might get hit with is called a foreign ATM fee
Most foreign ATM's charge an additional commission just to use their machine.
And in most cases the ATM will state the fee before you confirm your withdrawal
And you stand the best chance of avoiding these fees by using major bank-affiliated ATM's
The next type of fee is a currency conversion fee
Whenever you change over money from one currency to another
you are going to incur conversion fees
which are almost always hidden, and in fact some foreign ATM's try to trick you
into paying more conversion fees than you have to
For example
and I have seen this mostly in Europe ATM's
Is that the ATM will try and trick you into withdrawing as much money as possible
When you first put your card, it will appear as though
the only options to withdrawal money are the ones listed
and most of the time the amounts listed are way more than you need
But you might not know that if the currency listed is in the country's currency
and not in US dollars
So you want to know the currency conversion before you withdrawal
and know for sure how much cash you are actually withdrawing
In most cases you are going to want to select the "other amount"
and choose a lesser amount to withdrawal
The other trick to watch out for is once you have selected the amount to withdrawal
it will display 2 options "With or Without Conversion"
It will ask you to either accept or decline
Now the "with conversion" option , it will look like that is the option you should choose
because it will have your home country's flag on it and it will say accept conversion
And you will think you will need to hit accept so that you will get your money out
It seems like a logical thing to do
But no, if you were to hit the accept button, you will immediately loose money
That's because the ATM includes a markup for doing the conversion for you
It's really asking you should the ATM do the conversion for you or your local bank?
And the markup can be as high as 12 or 13 percent
So lets say you want to take out $500 from the ATM
At a 12 percent markup, that is a lose of $60
and on top of that
the ATM will probably charge you a transaction fee just to get your money out
So it could be as high as 15 percent that you are losing out on
So you can see why the ATM is trying to get you to withdrawal as much money as possible from the start
in order to get you to pay more in fees
So you always want to decline the conversion option
or some ATM's it might say confirm withdrawal in local currency
That's the one you want to select
Now you may still have to pay the ATM fee but you will
but you will end up saving 12 or 13 percent just by declining the conversion option
You want to to also avoid using private ATM's located in convenience stores
or on street corners because they tend to charge extra commissions
and service fees so avoid them if you can
So the next type of fee is withdrawal fees
so depending on your bank and the type of account you have with them
They may or may not charge an additional fee when making purchases with your debit card while abroad
This means you might be able to ask the vendor you are purchasing from for additional cash back
And not have to pay the ATM withdrawal fees
Just make sure you ask the vendor if they charge an additional fee for doing this though
And the last type of fee is credit card fees
If you are going to be using your credit card to make purchases during your trip
Just note that depending on where you are going
credit cards are not always accepted
The currency conversion rates are also going to vary by card
so you want to make sure what those are
And use a credit card that has a reasonable conversion rate to save money
Cash advances should be avoided whenever possible
since interest is charged on your entire balance from the day you withdrawal your money
As opposed to regular charges which afford you a grace period
When making purchases with your card some stores may even charge you an extra fee
even as much as 10 percent
And they may also offer to charge you in your home currency
but its not usually a good idea
A lot of times they are using higher conversion rates
And sometimes your bank will still charge you a foreign transaction fee as well
So before I end the video I am just going to leave you with some final tips
about using foreign ATM's
The first tip is to check your ATM network logos on your card
On the back of your card is likely a series of logos
including at least one of Plus, Interlink, Maestro, or Cirrus
which are the most common networks around the world
You will only be able to use the ATM's abroad that display one of these logos that matches your card
The other thing you want to know before you leave on your trip
is your withdrawal limits
if you have set daily or weekly withdrawal limits
then you might want to adjust those with your bank
Or at least come up with a plan to work around them
And the next tip I have for you is
when using a foreign ATM
normally you would see options to see your account balance
transfer money from one account to another
and other account tasks
Well, when using a foreign ATM
these options aren't usually possible
At best you can see your account balance, although not always
and make withdrawals
You should also know which account numbers are linked to your checking and savings accounts
As sometimes you may not be able to see the labels on those accounts
Or you may not understand the language
so its best to know which account numbers are which
Access to online banking can help you avoid some of these issues
by being able to transfer money between accounts
See your account balance, create travel alerts
and monitor transactions
Its also a security measure so you can keep an eye on your accounts
to ensure there is no fraudulent activity
And my last tip here is to make sure you have a chip card
Otherwise you may not be able to use some ATM's abroad at all
Also, most ATM's only accept 4 digit pin numbers
So if you have a 5 digit pin number
make sure you get that switched before you depart
Well, that will do it for this video
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Thank you so much for watching and I hope to see you in a future video