Traveling abroad is costly enough. But unexpected debit card fees can make matters worse, eating up good money that’s better spent elsewhere on a trip.
When it comes to using your debit card overseas, knowing the costs involved can help you minimize expenses. It also helps to shop around for the best card for your situation.
Foreign ATM and transaction fees
Just like using a credit card in a foreign country, you can incur charges every time you take out local currency from an overseas ATM or pay with a debit card in a restaurant or a store. There are two types of debit card fees you may face abroad:
Foreign transaction fee: Sometimes called a currency conversion fee, this applies for foreign transactions made with a debit card. It usually ranges from 1% to 3% of the purchase amount. Foreign transaction fees for credit cards work similarly.
International ATM fee: Banks and credit unions typically charge a flat fee — often up to $5 — for using an ATM network in another country, plus a percentage of the amount you withdraw. This fee may be a different amount from your institution’s domestic out-of-network ATM fee.
The machine owner may also have its own ATM fee in addition to what your bank or credit union charges, generally a similar amount.
Don’t want to pay? ATMs typically provide a notice of the charge so you’ll have an opportunity to cancel the transaction.
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How to keep foreign transaction fees low
Look for banks with no- and low-fee options. Some banks and online institutions have accounts that are friendly to travelers. They may have no foreign transaction fees or traveler-friendly ATM fee reimbursem*nts on international ATMs.
Find banks with international networks. Some institutions have partnerships with banks in other countries so travelers can use their ATMs and not pay out-of-network fees. Before you travel, you can check to see if your bank has an arrangement of that type.
Consider upgrading your bank account. Banks may waive foreign transaction fees for customers who have premium checking and savings accounts. They may also waive ATM fees worldwide. However, these types of accounts tend to have high monthly fees — as much as $35 — with a minimum balance requirement of several thousand dollars to waive the fee. Try to find a non-premium account that waives ATM fees worldwide without huge monthly fees.
Avoid freezes. Before you leave the U.S., it’s a good idea to inform your bank or credit union of your travel dates. That way, when you ring up purchases in Paris or Tokyo, your bank won’t suspect identity fraud and freeze you out of your account. It won’t do much good to have a debit card with low fees if you have to use another form of payment because your account is frozen.
Before leaving for a trip, check with your institution to make sure you understand the most economical way to use your debit card. If the foreign transaction fees seem too high, especially if you’re going to travel frequently, consider opening an account at a more travel-friendly bank.
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FAQs
Visit your My NerdWallet Settings page to see all the writers you're following. Foreign transaction fees can add up fast when using your debit card abroad. The fees are often 1% to 3% of the amount of a purchase, and many banks also apply the fee to ATM withdrawals.
Do you pay foreign transaction fees on debit card? ›
Foreign transaction fees are charges that credit card issuers, banks and other financial institutions impose when you use an electronic payment card to make a purchase in a foreign country or to buy goods and services in another currency. You can incur these fees whether you're using a debit card or a credit card.
Do debit cards charge extra for international transactions? ›
Foreign transaction charges: Every time a debit card is used at an ATM or POS terminal, foreign transaction charges range between 2.50% to 3.50%. A markup fee of 3.50% will also be charged on debit card usage.
How to avoid international transaction fees on debit card? ›
The best way to avoid foreign transaction fees is to acquire a no-foreign-transaction-fees credit card, if you qualify for one. Next in line are checking accounts or debit cards with no foreign transaction fee. It is also possible to avoid the fee by paying in the local currency for purchases.
Do I get charged for using my debit card abroad? ›
Visa exchange rate
This might not be the same day when the transaction took place. A 2.99% fee charged by us for using your debit card abroad when making purchases, withdrawing cash or for refunds.
Who pays debit card transaction fees? ›
Both debit and credit cards require sellers to pay a range of fees every time a transaction occurs because a lot of entities are involved whenever a card is used—and all of these entities want something in return for their services.
Is it better to use a debit card or credit card abroad? ›
Credit cards also tend to be safer to use abroad. If your debit card is hacked or stolen while away, then the money in your account is at risk. This is not the case with a credit card as only the money up to your credit limit is at risk. There is also something called Section 75 of the Consumer Credit Act.
What is the international fee for Visa debit card? ›
Visa and Mastercard both charge a fee of 1%. Regardless of the type of credit card, this fee is applied to all transactions. Issuing bank fee: Depending on the credit card you use — such as Citibank, Chase or Barclays — some issuers add a charge on top of the network fee, usually around 2%.
How do I pay internationally with a debit card? ›
All you need to do is inform your bank about certain specifics, i.e. the currency, daily usage limit, time period etc. Once you have informed your bank, subject to sufficient funds available in your account, your bank will activate international usage on your card.
Is a 3% foreign transaction fee high? ›
While 3% might not seem like much, the charges can add up. For example, if you jet off to Europe for a month and charge $5,000 on a card that carries a 3% foreign transaction fee, you'll have to pay an extra $150 when the bill comes due.
Top Debit Cards for International Usage in April 2024
| Card Name | Annual Fee |
|---|
| SBI Platinum International Debit Card | Rs. 250 |
| InterMiles HDFC Bank Signature Credit Card | Rs. 500 |
| Axis Bank Burgundy Debit Card | Nil/Rs. 1500 for Non-burgundy account holders |
| ICICI Bank Sapphiro International Debit Card | Rs. 1499 |
2 more rowsApr 1, 2024
Discover it® Cash Back: Best feature: Cash back on everyday purchases. Discover it® Miles: Best feature: Travel rewards. United Gateway℠ Card: Best feature: United Airlines rewards. IHG One Rewards Traveler Credit Card: Best feature only: Bonus points at IHG hotels.
What debit card doesn t charge foreign transaction fees? ›
Discover® Bank
Discover doesn't charge foreign ATM network or foreign transaction fees. But Discover card acceptance can be limited outside of the U.S., Canada, Mexico and some Caribbean nations. With an HSBC Premier Checking account, customers pay no foreign transaction fees. HSBC also has a worldwide network of ATMs.
Which cards don t charge foreign transaction fees? ›
Best Credit Cards With No Foreign Transaction Fee of April 2024
- Discover it® Balance Transfer: Best feature: 0% Introductory APR.
- Discover it® Cash Back: Best feature: Cash back on everyday purchases.
- Discover it® Miles: Best feature: Travel rewards.
- United Gateway℠ Card: Best feature: United Airlines rewards.
