Let’s Talk About ATM and Credit Card FEES

Understanding the various fees that you might pay with credit card and debit card when using overseas

When using an ATM or CREDIT CARD outside of the United States, you may be charged one or all of the following fees, if your card does not expressly exempt you from these charges.  This is why choosing the right cards is critical.

1.  FOREIGN ATM FEE:  This is typically a flat fee for using the ATM and is PER TRANSACTION.  In Thailand, this fee is 180-baht ($5.63USD) and in the Philippines, we are charged 200-peso ($4.65USD).  The average is somewhere between $2-5.  This is the fee that is charged by the ATM that you used (not your bank).

Although the primary focus is the use of “international” ATM’s, “Foreign” means that it is NOT the ATM of your bank — it should be noted that if you use an ATM in the USA that is not branded with your bank name, you will also be charged a fee.  CapitalOne charges non-CapitalOne users $2.00 to use their ATM’s.

It is usually NOT possible to “see” the fee on your bank statement, as it is included in your withdrawal.  For example, if you withdraw 10,000-baht from a Thailand ATM, you will actually be charged 10,180-baht.  You will be required to say “Yes” or “Accept” this charge otherwise the withdrawal will fail.
2.  OUT OF NETWORK ATM FEE:  In addition to paying a fee for using an ATM in a foreign country, YOUR BANK may also charge you a fee for accessing your account from “an out-of-network” ATM machine.

There are fees to use your card in another ATM.

In this example, I use a NON CapitalOne ATM at the San Francisco Airport.  The ATM charged me $1.50 (I wanted $300).  BUT, CapitalOne charged me $2.00 additionally because I accessed my account and made a withdrawal from an ATM that was not a CapitalOne ATM.
3.  FOREIGN TRANSACTION FEE:  This is the fee (usually 1-3%) to convert your transaction to USD, and the “privilege” of giving money to you in the local currency of the ATM.  This fee might also be called the “Currency Conversion Fee” or “Overseas Transaction Charge”.  Australians will most likely see the “Overseas Transaction Charge”.  If you use your card often on a foreign vacation, this charge can add up to a substantial fee that could have been avoided.
4.  DYNAMIC CURRENCY CONVERSION (DCC):  Visa refers to this as “Cardholder Preferred Currency (CPC)”.  One of the sites I follow called this the “Robbery by Choice” fee or the Dynamic Currency Conversion Ripoff.  When you attempt to use your card in a foreign country, the staff will look at the card and determine what country it is from.  Then they will press a related button on their credit card terminal which will “charge you in your local currency”.

The staff will tell you it is best for you and shows you EXACTLY what you will pay so that you don’t have to worry about exchanges rates and fees.  What they don’t tell you (because they were never taught) is that you are now paying almost TWICE as much in fees by choosing to “pay in your own currency”.

The same is true for ATM machines.  When you attempt to make a withdrawal, some machines will ask you if you want to continue the transaction in your “local currency”.  If you do, you will be charged a much higher fee.  We devote an entire section of our website to proving that DCC is a ripoff!

The fee (or money ripped-off from you) is split three ways between the card issuer (the bank), the merchant (who bills you for their goods or services) and the DCC provider (a middleman who tees up the arrangement).

If you do not want to use DCC when making a purchase, then you have the right to refuse the offer and have your transaction billed in the merchant’s local currency, which will then use Visa’s conversion rate. If you did not agree to DCC, but see it on your bill, then you should ask your issuing bank to contest the charge.

If you have been ripped off by a DCC transaction, you can fight it.  How to Fight DCC Transactions.
5.  ANNUAL CARD FEE:  Some cards have no annual fees, some have small annual fees, and some cards have huge annual fees.  You are the one who makes the final decision of which card you obtain and what fees you agree to pay.

Some of my cards (CapitalOne) have NO annual fees; however, I have other cards with $395 fees (United Presidential Plus) and $450 (Delta Reserve).  You decide if the benefits provided by the cards justify the annual fee — or whether NO ANNUAL FEE is the way to go.
6.  CASH ADVANCE FEE FROM YOUR CREDIT CARD:  Bad idea!  Never take cash advances from y0ur credit card unless you are desperate!

Taking a cash advance from your credit card is costly:
1.  Your credit card provider usually charges a HIGHER interest rate for the transaction.  Take a look below at a capture from my CapitalOne credit card statement.  My regular interest rate is 15.90%.  If I take a cash advance, that rate increases to 24.90%.

capitalone charges huge interest for cash advance

2.  NO interest-free days or grace period.  When you take a cash advance, you start owing interest on that money immediately.  By the time you get back from your trip, and receive your credit card bill, you might owe for 30-40 days of interest.  A wasted expense.

3.  You may also receive a CASH ADVANCE FEE.  You might be charged a 1-3% cash advance fee for taking cash advances from your credit card.


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