What fees will I be charged when I use my credit card for an overseas ATM withdrawal?
Cash advance fee. When you use your credit card to get cash or any type of cash advance transaction, your card provider will charge a fee usually between 3% and 5% of the total transaction cost.
Cash advance APR. Whenever you get cash out of an ATM with your card, you start to accrue the cash advance APR from the day you make the transaction. This interest rate is typically higher than the standard purchase rate and is usually up to 28%.
Foreign transaction fee. Some credit cards charge a fee between 1% and 3% for transactions made in an international currency. You can avoid this with a no-foreign-transaction-fee credit card.
Foreign ATM company charges. Some ATM companies and providers also apply a fee for processing your withdrawal.
Note that this fee could be charged in a foreign currency and you will be notified of this cost before you go ahead with your transaction.
Case study: The cost of using a credit card for overseas ATM withdrawals
Ruby is traveling through the UK and needs some cash for a visit to a village that does not accept cards. She decides to use her card, which charges a foreign transaction fee of 3% and a cash advance fee of 3%. It also has a cash advance interest rate of 26% variable. Ruby uses her credit card to withdraw the equivalent of $1,000 from an ATM in a local currency, and is charged the following:
Foreign currency fee: $30
Cash advance fee: $30
Foreign ATM fee applied by the UK ATM provider: £2 or approximately $2.50
Total fees: $62.50
Ruby is also charged the 26% cash advance APR for her total transaction cost of $1,062.50. If she carries this balance for 30 days, she will also be charged around $23 in interest. This brings the total cost of her $1,000 overseas ATM withdrawal to $85.50.
How can I avoid paying foreign ATM fees?
Not many cards offer the complete no-fee package. Most travel cards come with no foreign transaction fees, but you still have to pay cash advance fee and a high cash advance APR.
Travel credit cards issued by credit unions often come with no foreign transaction fees and no cash advance fee. The cash advance APR with these cards is also lower up to 18%.
Compare credit cards with no cash advance fees and no foreign transaction fees
Other factors to consider
As well as the range of fees that can apply when you use a credit card at an overseas ATM, it’s important to keep the following factors in mind:
Credit limit. Your credit card limit gives you access to a specific amount of funds. You won’t be able to go over this amount, so it’s important to regularly check your balance. Some card issuers may also put a lower limit on cash advances than for actual credit.
Daily withdrawal limits. Some credit cards put a limit on the amount of money you can withdraw with your card each day. Call your provider for information on this.
Global ATM alliance networks. Bank of America has access to ATM alliance networks that extend around the world and allow you to get cash out overseas without paying an ATM withdrawal fee.
The Global ATM Alliance network, includes Westpac, Barclays, BNP Paribas and Deutsche Bank.
Rewards. If you use a rewards credit card to get cash out at an overseas ATM, you won’t earn points because cash advance transactions are not considered eligible purchases that offer rewards.
Exchange rates. Remember that exchange rates will apply whenever you use your credit card for a transaction in another currency. This rate can fluctuate daily and impact your account balance and the total cost of any fees applied.
Other alternatives to avoid foreign ATM fees
Aside from getting a credit union-issued card, you have several other options:
Travel cards. Travel cards are prepaid cards that allow you to load and spend money in a range of foreign currencies. They help you avoid foreign transaction fees, cash advance fees and APR.
There are some travel cards with no overseas ATM withdrawal fees, but it’s important to check the charges that apply. Also, note that other fees – such a card reload fees – may apply.
Debit cards. Your everyday debit card also allows you to withdraw cash from a foreign ATM without any cash advance fees or charges. Similar to credit cards, there are some debit cards with no overseas ATM withdrawal fees.
Note that you may still have to pay a foreign transaction or currency conversion fee for your debit card ATM withdrawals.
Foreign currency. Avoid card fees by getting cash in the local currency. Cash can be exchanged at an authorized foreign currency outlet in the US or overseas. Many banks, allow you to buy foreign currency, as do agencies such as Travelex.
It’s usually recommended that you take some foreign cash with you to pay for purchases or services that don’t accept debit or credit cards.
Traveler’s cheques. Travelers’ cheques can be used as an alternative to cards or cash in some overseas locations. It allows you to get a specific amount of money in local currency, and it can easily be replaced if lost or stolen. But travelers’ cheques are only accepted by certain merchants overseas.
While there are credit cards that offer no foreign ATM withdrawal fees, this is just one of the charges that could apply when you get cash out using a credit card. You can choose a convenient and affordable way to make payments when you’re traveling abroad if you first understand the range of different fees and options available to you.
If these travel money options don’t seem like a fit for you, compare other travel credit cards.
Frequently asked questions
Yes. Letting your credit card provider know about upcoming travel plans will help them keep your account secure. Also, you will avoid unpleasant situations where your card gets rejected by the merchant.
Each credit card company has its own set of fees and charges, as well as its own way of applying them. For detailed information, you need to read the terms and conditions associated with your individual credit card.
Most credit card providers are part of one or more card alliances. These alliances allow cardholders to withdraw money from millions of ATM machines around the world. It is important to check which network your credit card belongs to. The most popular networks include Mastercard, Visa, Cirrus, Maestro and the Global ATM Alliance.
Kliment Dukovski is a credit cards and investments writer. He's written over 600 articles to help readers find and compare the best credit cards. Kliment has also written on money transfers, home loans and more. Previously, he ghostwrote guides and articles on foreign exchange, stock market trading and cryptocurrencies.
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