Travel Money: How to Reduce Overseas ATM Charges
For business travellers and tourists alike, overseas ATM charges are a fact of life. But there are things you can do to dramatically reduce these fees – which over a year can add up to big savings.
But it's easy to get caught out.
For instance, thanks to a technical glitch on a recent trip to Bangkok, I was forced to use a domestic UK bank card instead of my usual pre-paid credit card. The result? An additional cost of about £5. The entire transaction for £200 cost me nearly £13, as opposed to £7-8.
For those who prefer to withdraw smaller sums (perhaps over security concerns), these charges could mount up over a two week holiday.
The Fees
Banks have a number of fees for overseas transactions, which usually include:
- The ATM fee – the cost of using a particular bank's ATM. This is usually about $5 or £3.30 – although a select few banks waive this fee
- The ATM fee levied by your card provider – a fee for using your card overseas, usually percentage based with a minimum charge.
- Transaction fee – another percentage based fee based on the amount withdrawn.
Overseas Money – Top Tips
If you travel frequently, it is worth doing a little research on which card is best to use abroad. Here are some tips for cutting those fees and dealing with cash while abroad.
- Choose a card provider with low fees. Even if you only use a particular card for overseas trips, it could save you hundreds in the long term. A regularly updated page from the Telegraph details some of the best – and worst – card issuers. Among the most costly debit card providers are the Co-operative Bank Current Account, Lloyds Bank Classic Account and the TSB Classic Account. As regards credit cards, Marks & Spencers, American Express, Asda and Virgin Money are the most expensive. The best are the Halifax Clarity Card and Metro Bank (zero on all fees).
- Consider a pre-paid credit card. Caxton FX and FairFX were designed to minimise the cost of overseas transactions and offer good value; they are usually cheaper to use than most debit cards.
- Withdraw larger amounts. This will reduce the number of ATM fees you're charged. However, be sure you can keep any large sums secure – perhaps in your hotel room safe.
- The bank whose ATM you use will nearly always charge you a fee (of about $5). However, some banks waive this fee. It is worth researching if such a bank operates in your destination country.
- Consider joining a bank that is a member of the Global ATM Alliance: while overseas you can use member banks' ATMs without being charged an international ATM access fee.
- If you use a pre-paid credit card, be sure to top it up a few days before you withdraw money. These top-ups can sometimes be delayed, which might force you to use a more costly card – or find yourself without any money! Which leads to the next point...
- Never wait until you have no money left before you visit an ATM. Your card could be swallowed or there could be a technical glitch – so ensure you have an emergency cash fund tucked away somewhere.
- Take out a high quality annual holiday insurance policy so that if your money is lost or stolen, you will be repaid the money in whole or in part – depending on your policy.
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