How to avoid card fees and charges traveling overseas |
How to avoid travel money fees and charges traveling overseas

How to avoid travel money fees and charges traveling overseas

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Save money on your vacation by sidestepping the fees.

To understand the hidden costs that come hand in hand with travel money, you have to read the fine print, understand your options and make the right choices. You can start saving for your next trip by being careful about what spend on and how you pay.

This guide breaks down and gives some tips on how to avoid the hidden costs and charges you’ll run into when taking travel money on vacation.

The major travel money costs and how you can avoid them

Fees for overseas purchases

  • Currency conversion fees

Currency conversion fees happen when you pay for something in a currency that is different from the default currency on your card. So, if you use your credit or debit card abroad and pay in the local currency, you’ll likely be charged a fee (around 3%). Imagine getting charged $60 on top of your $2,000 hotel stay — this fee can bleed hundreds of dollars on your vacation.

  • How to avoid them:

You can miss this fee completely by using a credit or debit card — like the Capital One 360 debit card — that waives the currency conversion fee.

Another way to avoid this fee is to use a prepaid travel card and preload the foreign currency you’re planning to spend (see what happens when your prepaid card doesn’t support the local currency).

  • Exchange rates

Exchange rates can either work for you or against you depending on currency fluctuations. Also, where you exchange your money is important too. Exchange rates at the airport exchange desks and foreign money changers will typically have less favorable rates because of an added margin for their own profit — this is either reflected in a lower exchange rate or a money exchange fee.

  • How to avoid them:

Avoid exchanging your money at airports or with random foreign money changers. You’re better of withdrawing cash from an international ATM to get a more competitive rate.

If you’re concerned about currency fluctuations, consider a travel card that’ll lock in the exchange rate when you load funds on the card. On the other hand, credit and debit cards will give you access to the daily interbank exchange rate, which is usually the most favorable rate.

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Fees for withdrawing cash overseas

  • ATM withdrawal fees

If you’re not careful, you could find yourself paying this fee twice for each overseas ATM withdrawal you make — once to your card provider and once to the ATM operator.

  • How to avoid them:

You can spare yourself this fee by getting your paws on a travel-friendly card with no overseas ATM withdrawal fees. Capital One and Discover are two of your options when looking for a debit card with no international ATM fees.

It’s also worth noting that Barclaycard and Bank of America are members of the Global ATM Alliance, which waives the fee when withdrawing from a member’s ATM. You could also minimize the fee by withdrawing a large amount of cash and limiting your ATM visits.

  • Cash advance fees

This steep fee, plus interest, is charged by credit card companies each time you make an ATM withdrawal with your credit card.

  • How to avoid them:

It’s simple, avoid this by not making cash withdrawals on your credit card. Instead, make sure to pack a prepaid travel card or debit card that you can use for overseas withdrawals.

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Fees using prepaid travel money cards

  • Account inactivity fees

If you’re not using your card, the provider might charge a monthly fee for maintaining your account following a period of inactivity, usually 12 months.

  • How to avoid them:

If you want to keep your account active, make a small transfer or purchase before 12 months on inactivity. The last thing you want is for your remaining funds to be slowly devoured by the monthly inactivity fee. Read our guide on how to claim your remaining travel card funds.

  • Account closure fees

When you close your travel money card, you may find that you’re charged an account closure fee.

  • How to avoid them:

There’s really no way to avoid this cost, unless you exhaust all of your funds on the card. Then you won’t have to worry about the fee for closing your card to get your remaining balance back.

Travelex Money Card

Why we like: Travelex Money Card

Load GBP, EUR, CAD, AUD, JPY or MXN onto this prepaid travel money card and use it at millions of locations worldwide.

  • Not linked to your bank account for safety.
  • Convert currency with a 5.50% Foreign Exchange Fee
  • Contactless payments
  • Reload, withdraw, or replace your card for free.
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    Fees for using travel credit cards

    • Annual fees

    Cards designed for overseas use can also come at a price, so make sure that the annual fee doesn’t outweigh any potential benefits.

    • How to avoid them:

    To get by this, just look for a credit card with zero annual fees or a promotional period that allows you to use the card at no charge.

    • Interest fees

    When you use your credit card, not only will you have to repay the purchase amount, you may also have to pay interest. Be sure to make on time payments or you could roll yourself into a ball of a debt.

    • How to avoid them:

    You could get a travel-friendly 0% interest credit card or you could take advantage of the interest-free days when you pay your balance on time.

    • Merchant fees

    Sometimes you might find that the overseas merchant adds a surcharge to your transaction just because you’re using a foreign credit card.

    Also, if you agree to pay in dollars while overseas, you’re agreeing to the currency conversion rate which incorporates a fee to the merchant, a poor exchange rate and the currency conversion fee which your card company may also charge.

    • How to avoid them:

    Always stay alert at the counter and be vigilant about checking your bill before paying. Ask when in doubt about any item, and always say “no” when offered to pay in your home currency.

    Rates last updated June 19th, 2018
    Name Product Foreign Currency Conversion Fee Overseas ATM Withdrawal Fee Overseas Cash Advance Fee Annual fee Product Description
    Luxury Card Mastercard® Titanium Card™
    0% of transaction value
    Enjoy unique excursions, privileged access to exclusive events and insider opportunities.
    Luxury Card Mastercard® Black Card™
    0% of transaction value
    Mastercard Black Card members receive an annual $100 air travel credit toward flight-related purchases including airline tickets, baggage fees, upgrades and more.
    Luxury Card Mastercard® Gold Card™
    0% of transaction value
    Earn points every time you spend. Luxury Card enhances your purchasing power by providing you with one (1) point for every one dollar ($1) you spend. Every purchase gets you closer to the rewards you want.
    Bank of America® Travel Rewards Credit Card
    0% of transaction value
    20,000 online bonus points offer. Ditch the restrictions of typical airline rewards cards. Any airline, any hotel, anytime. No blackout dates.
    Chase Sapphire Preferred® credit card
    0% of transaction value
    $0 annual fee for the first year ($95 thereafter)
    Earn 50000 points when you spend $4,000 on purchases within the first 3 months of your account opening, and an additional 30,000 points when you spend a total of $30,000 on purchases within the first year of your account opening.
    Venture® from Capital One®
    0% of transaction value
    $0 annual fee for the first year ($95 thereafter)
    Earn 50000 bonus miles once after spending $3,000 on purchases within the first 3 months from account opening.
    HSBC Cash Rewards Mastercard® credit card
    $0 per transaction
    Earn unlimited 1.5% cash rewards on purchases.
    Bank of America® Premium Rewards® Credit Card
    $0 per transaction
    Earn unlimited 2 points for every $1 spent on travel and dining purchases and 1.5 points for every $1 spent on all other purchases.
    Uber Visa Card
    0% of transaction value
    Get 4% points back on dining, 3% on travel, 2% on Uber rides and online shopping and 1% on other purchases, and redeem points for Uber credits, gift cards or cash back.
    Chase Sapphire Reserve®
    0% of transaction value
    Earn 50000 BONUS POINTS after spending $4,000 on purchases in the first 3 months from account opening* — that's $750 toward travel when you redeem through Chase Ultimate Rewards®.
    The Platinum Card® from American Express
    0% of transaction value
    Get 5X Membership Rewards® points on flights booked directly with airlines or with American Express Travel and 5X points on eligible hotels booked on
    United℠ Explorer Card
    0% of transaction value
    $0 annual fee for the first year ($95 thereafter)
    40,000 bonus miles after you spend $2,000 on purchases in the first 3 months from account opening.* Plus a $100 statement credit after your first purchase.

    Compare up to 4 providers

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    Kyle Morgan

    Kyle Morgan is a writer and editor for who has worked for the USA Today network and Relix magazine, among other publications. He can be found writing about everything from the latest car loan stats to tips on saving money when traveling overseas. He lives in Asbury Park, where he loves exploring new places and sipping on hoppy beer. Oh, and he doesn't discriminate against buffalo wings — grilled or fried are just fine.

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