Note: The contents of this article are tailored to people with access to the American financial system (which you don’t have to be American to benefit from – and that’s an important point) but if that isn’t your situation, you can still use the following points to check whether the financial institutions in your country offer these types of solutions.
Accessing Cash – Debit Cards
The Problem
Usually, withdrawal limits on ATMs for foreign cards is almost maliciously low, and they gauge you on fees, so the withdrawals you end up doing would normally look like:
$200 withdrawal
~$5 fee charged by foreign bank
~$5 fee charged by your bank
That turns out to be a ~5% fee just to ACCESS your own money!
The Solution
Getting ATM fee reimbursements is is BIG for traveling, because it lets you avoid the aforementioned grifting completely. You could literally stand at an ATM all day – one in your currency anyway, other currencies are a different story we’ll get to in a moment – and withdraw the smallest denomination of bill all day long, and your bank statement would be full of pleasureful line items that say “Foreign ATM Fee Reimbursement: $5”.
I really like seeing those.
The most popular US bank for this, is Charles Schwab. They are famous amongst travelers for not only not charging their own ATM fees for withdrawals abroad, but reimbursing you for the foreign ATM fees charged by the banks that own the ATMs you’re using abroad.
The Alternatives
Now usually there are ways to reduce the impact even without , which boils down to either finding which bank lets you withdraw the most at a time (for example, last time I was in Thailand it was krungsri, in Indonesia it was BCA) and/or with the lowest fees (e.g. I can’t remember if it was in Taiwan or Japan, but the ATMs in the 7-11’s – which are actually owned by 7-11’s own “bank” – actually did not charge a withdrawal fee) – but this will be something you need to find out for each country.
Alternatively, your own (current) bank may also have affiliate banks in the places you’re going, which actually do count as in-network banks, even in different countries. Again, you’ll have to check that with your bank, and knowing that for every place you go can get annoying – plus on top of that, the affiliate banks may be smaller ones that aren’t convenient to get to.
Like What You See?
The Other Considerations – Exchange Rates, Mostly
Another relevant factor to consider is the actual exchange rate you get from your bank – because that ~5% “access fee” is just the baseline, and then on top of that, they make money on the spread.
You may be getting that fee reimbursed, but then if your bank is gauging you on the exchange rate, you’re still not doing that well.
That’s something you have to check into by comparing the exchange rate at the time of purchase (or when it gets posted to your account, this may depend on your bank what rate it captures) with the actual one you got charged.
(As an aside, even despite that, you’re almost always better off having your own bank do the conversion than the local merchant/bank, no matter where or how you’re paying – and if it’s in cash, always pay in the local currency, with the exception of you being in a country whose currency is so inflated that they actually, meaning even the locals, and not just in the touristic areas, use a foreign currency for actual transactions.)
Accessing Cash – Credit Cards
No Problems, Just Solutions
It’s both for the reason of exchange rates and convenience (plus some great rewards) that I prefer to use a credit card specifically tailored to traveling whenever possible – meaning, specifically, (a) when the merchant accepts it, but more importantly, (b) when I trust the merchant not to potentially scrape my data and/or commit fraud.
Generally, I’ve followed the rule of size, where I don’t trust small independent merchants unless the country is a highly developed one or perhaps in rare cases of exception, and that’s worked out well for me (meaning: no identity theft/fraud in almost a decade of traveling while primarily using credit cards).
You can look into Bank of America for their travel credit cards. Besides the affinity ones (which I don’t use travel points as it’s just too much mental overhead to care about, and on top of that is far outweighed even monetarily by just getting the best flight every time – “best” having multiple criteria beyond price – which often are from different alliances, given that the type of travel that the nomadic life is predisposed to is generally not taking the same routes again and again), you have the basic free blue one (which is enough), or if you want some extra perks, the Premium black one.
The great things about the cards, are that:
- You get no foreign transaction fees,
- You actually get rewards from your spend – which are multiplied rather nicely if you have enough money with them to part of their Preferred Rewards tiers, and
- You get highly competitive conversion rates (especially compared to debit card ATM withdrawals) which, sometimes, are actually better than mid-market exchange rate (which again is affected by your Preferred Rewards tier).
Credit Cards Over Cash – Not “Any Day,” but Most
I really try not to use cash when I travel – also relatedly because I don’t usually shop in places small enough to not trust, and these days spend more time in more developed countries – but when I do, it’s great to have a bank that won’t charge you egregious fees of its own, and even reimburse you for the egregious fees of other banks.
When I do use cash, getting it all from ATMs also means I haven’t had to visit an foreign currency exchange desk in a long time, except for sometimes at the airport when I’m leaving a country that I don’t intend to come back to any time soon, and have a lot of cash I want to convert – usually to USD, as that’s always available, and always valuable for paying visa fees, etc., but sometimes to the currency of the next country if it is a popular destination (which usually means they’ll have a better exchange rate due to the aggregate volume).
But whenever possible, cash just can’t beat the near-or-below mid-market rates, actual rewards, and convenience of credit cards – and for that, Bank of America is an excellent option.
Disclaimer: This article is not sponsored and we receive no compensation or incentive whatsoever from the mentioned institutions for our recommendations here.