When you get back from an unforgettable holiday overseas, the last thing you want to see is a stack of charges on your bank statement for the cash withdrawals or card transactions you made when you were abroad. So how can you avoid bank fees while traveling?
There are three areas you need to look at when it comes to bank charges when travelling abroad: fees for using an ATM machine to withdraw cash, foreign transaction charges when you use a credit or debit card and making sure you get a good exchange rate when swapping currencies. If you’re moving to another country for a certain amount of time you might want to open an international bank account , but if you’re going to be changing countries for a few months, it’s even more important to think about saving money by avoiding bank charges. Let’s learn how to avoid bank fees when traveling.
The first thing to do is to check if the high street bank you have your current account with has any partnership agreements with other banks around the world which will allow you to make free ATM withdrawals. Although the major banks typically charge the most for ATM withdrawals by non-customers abroad, by using ATM’s that belong to their international partners you can avoid these fees altogether. Major banks that have partnership agreements with each other include Bank of America, Barclays, BNP Paribas and Deutsche Bank. There are also banks like HSBC which have branches around the world whose ATM’s you can use without having to pay a fee if you are a customer. This can make for quite a saving on a long trip taking in several countries as HSBC, for example, now charges customers $2.50 per withdrawal if they use an ATM belonging to another bank abroad. Even if you are only travelling for a few weeks, ATM fees can still add up quickly. Many people withdraw money from an ATM every other or even every day. With an average fee of around $5 every time you withdraw your cash, you could easily be spending $20-30 in fees every week you’re abroad without really noticing. That’s money that you could be spending on something more enjoyable – tickets for events, meals, drinks, sightseeing – and which you can easily avoid paying out by planning ahead. When you think of how long you saved up and how hard you worked to get together the funds for your trip overseas, why should you give any of that money to the banks when you don’t have to?
Foreign Transaction Fees
When you use a credit or debit card while traveling overseas, your bank back will convert the transaction into its currency and take a commission for doing so. This means that you’ll always pay more for using a credit or debit card abroad than if you had changed your money with them before you set off on your trip overseas. There are ways though that you can minimize the amount of money you spend on credit and debit card charges while traveling abroad. For example, using a credit rather than a debit card usually works out cheaper, especially if you have a good credit record and withdraw large amounts of cash at once. Nevertheless make sure you compare credit cards before as many of them offer additional benefits such as rewards, airline miles, and more; you avoid bank fees while traveling and earn a few extra perks.
Beware of Exchange Rates
When it comes to changing money abroad, the best advice is don’t do it! Airports and foreign exchange kiosks abroad pay out some of the lowest rates for changing your cash into the local currency. It is always best to change your money before you set out even if means taking a large amount of cash with you on a long trip overseas. Most hotels offer safes either in your room or at reception where you can leave your cash and just take out what you need every day.
I could rant about this topic much longer, but by keeping these three points in mind at all times will help you avoid all if not most of all bank fees. Specific solutions depend on what country you’re in and what bank you work with- if traveling long term opening an account in a bank that has less fees and free online banking could well be worth it. Remember: learn the specific conditions of your bank, don’t withdraw money every day, and avoid exchange kiosks when possible!
Do you have any other tips and advice to share? How do you avoid bank fees, or do you simply ignore or forget about them? Share your thoughts with us in the comments section below and this post too if you think others might find it useful!