Traveling internationally is always expensive so anything you can do to stretch your money a little further is great. One area you can save just a bit more is how you use your debit cards when you travel overseas. Debit cards provide basic access to your bank account. But banks vary very much in how much they charge you for using your debit card internationally. Read on to see what major US banks charge for using a Debit Card while traveling internationally.
Finding great travel debit cards is very different than finding great travel credit cards. Your debit card is tied to your daily checking account. Therefore, it is a lot more difficult to change banks than getting a new credit card. Before making any decision about getting a travel debit card, you must understand understand the international transaction fees your current debit card comes with.
Understand your debit card’s fees
Before diving into how much each major bank is charging you when you use your Debit Card in Europe, let’s talk about the three main fees that your bank may charge you. These three most common Travel Debit Card fees are: Foreign ATM Machine Usage Fee, Foreign Currency Conversion Fee and Foreign Currency Purchase Fee.
The foreign ATM Machine usage and foreign currency conversion fees have to do with withdrawing cash from an ATM machine in a foreign country, while the foreign purchase fee has to do with making purchases with your ATM Card inside a store in a foreign currency.
Let’s take a look in detail at these debit card fees.
A foreign ATM Machine usage fee is a fee charged by your bank when you insert your Debit Card in a foreign ATM Machine. This fee is charged even if you only check your account balance and not withdraw any money. This fee varies from 0 to $5.
A foreign currency withdrawal fee is charged by your bank to convert from US Dollars (or whatever your home country currency is) into the local European currency (Euros or Pounds for example). This fee depends on the amount of cash you are withdrawing. This fee varies from 0 to 3% of the amount of cash withdrawn. Banks like Wells Fargo don’t charge this fee for foreign currency withdrawals.
A foreign currency purchase fee is the fee charged by your bank whenever you use your Debit Card to make a purchase inside a store. When you make purchases in Europe, your bank will only charge this one fee, since you are not using an ATM Machine. Debit Card foreign purchase fee varies from 0 to 3% of the purchase amount.
Learning how to minimize foreign transaction fees is a great way to stretch your travel money.
Major banks’ ATM/Debit Card fees
I compiled the following table from information I found on major bank’s websites. It is helpful to see all the fees together because they do vary wildly from one bank to the other. The best thing for you to do is to ask your bank and understand what fees they practice.
|Bank Name||Foreign Withdrawal Fee||Foreign ATM Usage Fee||Fees for $100 withdrawal||Fees for $1000 withdrawal||Foreign Purchase Fee|
|Capital One 360||None||None||$0||$0||None|
|Bank of America||3%||$5||$8||$35||3%|
|Navy Federal Credit Union||1%||$1||$2||$11||1%|
|Pentagon Federal Credit Union||2%||None||$2||$20||2%|
|Sun Trust Bank||3%||$5||$8||$35||3%|
What are the best Debit Cards for traveling abroad?
Personally, I have been using my Wells Fargo debit card for traveling abroad. After increasing my daily cash limit to $1000 it has become very cheap for me to get cash overseas…just $5 per withdrawal, regardless of the amount. However, if you are considering switching banks, Wells Fargo debit cards are not the best deal for international travel.
If you are looking for cheaper travel debit cards, consider Charles Schwab Bank or Capital One 360 as they reimburse any ATM fees even when using your debit card abroad. These are the cheapest travel debit cards to own.
If you are planning a trip, don’t forget about a safe and comfortable money belt for keeping your money and credit cards safe and available. It has always been a lifesaver for me.
Should you switch banks to get a better travel debit card?
While getting a great travel credit card is easy, switching banks just to get lower foreign transaction fees might not worth the hassle. It really depends on how frequently you travel abroad and how much you spend on your international trips. Why?
Before switching banks, consider that the best travel debit card can save you about $30 for every $1000 you spend in Europe. That’s it!
Most importantly, make sure you look in your own wallet and check with your current bank. Find out how much they charge you and think about how much you plan to spend abroad. Then see if it really makes sense to open another bank account just to get lower foreign transaction fees.
Article Series: How to maximize your travel budget.
- 10 simple rules for using your Debit and Credit Cards in Europe
- Best travel credit cards
- Best travel debit cards
- Get the best foreign exchange rate