How To Avoid Bank Fees Abroad
Bank fees, what a scam, eh? It feels almost criminal that you should have to pay money to access your own money, but that is just the way of the world and as much as every single person on the planet (except bank execs) abhors it, there is little to nothing we can do about it. When traveling, this can be even more of a drain on your finances, there is often an overseas usage fee, a currency conversion fee, and in some cases you will lose money from the conversion itself. This can put a serious dent in your travel plans as well as your wallet, but there are ways to avoid it. Let us explain with our 5 tips to avoid bank fees when traveling.
Free International Withdrawals
One of the best ways to avoid bank fees when traveling is to use a bank that does not charge for international withdrawals. There are quite a few banks which offer this as an incentive to open an account with them and are particularly popular with younger travelers who might be opening their first bank account without mom and dad’s help.
We’re not saying to close your current account and seek out one that can provide you with free withdrawals, but if you have been thinking about changing banks anyway and want to travel the world, then identifying one that allows you to withdraw any amount of money anywhere in the world without those nasty transaction fees is your best bet for avoiding fees of any kind.
Exchange Before Traveling
You should always go into a foreign country with some of their currency to get you through the first couple of days. This helps you pay for transportation from the airport, any entrance taxes you might have to pay, and will buy you dinner for the first night if you cannot be bothered or are unable to cook after a long flight.
Of course, this does not work if you are traveling for a long time. You do not want to be carrying around a massive amount of money in case something terrible happens during your trip. For this reason, exchanging before you leave is best suited to trips that are no longer than a couple of weeks. Otherwise, take out as much as you can and try to make it last as long as possible before giving in and visiting an ATM.
For the fairest conversion rate, it is best to get the money changed before you get to the airport as these exchange shops are a notorious rip off. Most post offices in your town will do this for you to set you up nicely for at least your first few days traveling. When they have done it ask them to double check it with money counting machines, not because you don’t trust them, but because you want to be 100% sure.
Does Your Bank Have a Foreign Partner?
One of the easier ways to prevent bank fees is to discover if your bank has a foreign partner. This can be done by simply asking your bank before you leave and finding out if they work with a bank in the countries where you are traveling. Doing this will allow you to know which bank you need to look for instead of trying each and every one and wasting precious time you could be exploring the world.
For example, Bank of America works with Deutsche Bank in Germany, and Scotiabank in Peru and (obviously) Canada. These partnerships are beneficial for customers from both countries and will allow you to withdraw money without a charge. Although, there might be charges for conversions in some cases. It is always best to check and double check beforehand so you know you that you definitely won’t get charged.
Other banks might even have international branches, such as HSBC. If you find your bank abroad then you are onto a winner. They might not always be easy to find and there might only be one branch in the entire country, which isn’t very useful if you are in a city hundred of miles away, but it will typically be capitals and major cities that you can find these in. Do some research, ask around and see where it gets you.
Don’t Use Your Credit Card
Credit cards are a great solution to when you don’t have enough cash on you at that moment. We have all experienced something like this before. The meal cost a little more than expected or there might be hidden charges that you were not previously aware of. Sometimes, your fellow travelers will help you out, but if you are by yourself you will need to rely on your credit card to get you out of this mess.
The problem with using credit cards abroad is that they will no doubt come with a usage fee. This fee can be anywhere between 3% – 5% which doesn’t seem like a lot, but is still not something you want to get into the habit of as these percentages add up. When going out, it is always best to take more than you expect you will need just in case you need to pay more for a meal or service or even for your dorm bed when you check out.
This is not true of all credit cards and there will be some businesses who actually encourage you to use your credit card as it comes without a charge. But the average traveler probably doesn’t have American Express or Diners Club cards, so it is best to go with cash only when wanting to pay for anything.
If you expect that you might need your credit card at some point it might be useful to check out banks that won’t request a charge for usage (like the free international withdrawal perks) or seek out banks that actually reward you for using their card abroad.
Seek Out Free ATMs
There are not many free ATMs across the world for foreign travelers, but there are enough that if you seek them out you will not have to worry about suffering bank fees. It won’t be easy and might contain a lot of trial and error, but it will be worth it once you find that sweet spot that says zero fees. There are some banks that are part of the Global ATM Network, and these will allow you to withdraw from their ATMs free of charge.
To make it easier for you, you can use social media and travel groups for the area or country you are in to ask other travelers if they have an idea of the best ATMs for money withdrawal. Most travelers will experience the same problems as you and like to do their best to work together in giving advice on the ATM with free withdrawals or the lowest fees.
Some ATMs will also have a limit on how much you can take out before charging. While it can be inconvenient to only take out a certain amount each time, it will be worth it when you look at your statement and see only the charge for the withdrawal and nothing else.
Other ATMs will allow you to take out larger chunks at a time. If you are unable to withdraw your money for free, it might be better to take out as much as you possibly can to reduce the amount of fees you incur. Again, check online and do your research into which ATMs allow for the largest withdrawals. There will still be a fee, but hopefully you won’t need to withdraw as often.
Why You Don’t Want Bank Fees
The obvious reason for not wanting bank fees is because why would you want to be charged to withdraw your money? These fees are sometimes not even stated on the receipt or are written in vague language with a lot of mights and mays so you can never be sure until you check your statement. This means that you can quickly lose money without even realising it.
Some fees can be as much as $5, depending where you are in the world. While this might not seem like a lot on an ordinary day, and you’ve probably given into temptation on more than one occasion and splashed out on a $5 KFC without thinking, when you are traveling it is a bit different.
Traveling the world on a shoestring means that you have to ensure you save every penny possible and that is not going to happen if you get charged for every withdrawal. They may be little increments, but these fees soon add up and you can find yourself running out of money faster than you expected. This will only end up cutting your trip short and ruining your experience, or requiring you to make that dreaded phone call home begging your parents for just a little extra cash to get you through the rest of your trip. You’ll pay them back though, promise.
What to Consider Before Traveling
Even before leaving on your travels, you need to consider a lot of things that will help you keep your expenditure to a minimum. Everyone knows how much planning goes into traveling, but in addition to thinking about all the cool sights you are going to see, all the interesting people you’re going to meet and what type of exotic beers you want to try, you need to figure out a budget and a time frame.
Giving yourself these will make moving from country to country much more manageable as you will have a general idea about what you will need to spend where, how long you will be in a certain place, and what you are planning to do. Organizing a budget for yourself will make it easier to control your spending and will give you a perspective on how much money you will need to have for each destination.
There will be days where you go over budget, but that’s okay. These overspending days can be rectified by taking it easy the day after. We know it can be tempting to do everything that everyone else does, but there is still so much of your trip to go and so many more things to see that you do not want to ruin it before it has even gotten started, especially if you are just going out for a bar crawl.
Other Things to Look Out For
As with any travel advice, we have to remind you about being cautious with your possessions when traveling in a foreign country. Ninety-nine percent of the time, it will be fine. You will pass through cities without incident, but there is always that chance that you could encounter unsavory characters if you are not careful.
There is little worse than getting mugged or robbed when traveling. It is the one time that you have everything you need with you all of the time and so if something gets stolen it can be a massive blow. You want to enjoy yourself traveling but you also need to be careful and do everything you can to avoid theft.
To do this, it is wise to consider investing in an RFID wallet or front pocket wallet to mitigate the chances of getting robbed. RFID won’t stop you getting pickpocketed, but it will prevent any card scanning happening as you innocently wander through the streets.
The front pocket wallet is easier to conceal in your pocket, which makes you less of a target compared to carrying around big bulking wallets filled with cash. Again, it doesn’t make you immune to theft, but it does a good enough job of protecting you from being mugged.
If the worst does happen and you do get robbed during your travels and are freaking out about money while your bank sends you a replacement card, you can always rely on the kindness of your fellow travelers to help you out eating and enjoying yourself. This doesn’t mean you should rely on charity, but using PayPal or similar transaction services to transfer your money to their account and then have them withdraw it will soften the blow of theft, just make sure you pay them for the withdrawal fee.
- What is a Foreign Transaction Fee – Credit Cards
- Top 10 Checking Accounts with No ATM Fees – Investopedia
- Avoiding ATM Withdrawal Fees When Traveling Abroad – The Points Guy
- How to Avoid Paying Bank Fees While Traveling – Business Insider
- 11 Ways to Avoid Bank Fees While Traveling – Wise Bread