What to know about using debit cards for international travel

There’s a lot of preparation that goes into planning for an overseas trip, such as getting your tickets and ensuring your passport isn’t expired.

But have you thought about the money? Not your budget — although that’s important as well — but literally how you’re going to pay for things during the trip. Here’s where a no-fee debit card for international travel may help.

• Things to consider when making payments overseas
• Potential debit card fees when traveling outside the U.S.
• The 3 best checking accounts and debit cards for international travel

Things to consider when making payments overseas

While a traveler’s check was once a mainstay for travelers leaving the U.S., they’ve declined in popularity since the mid-’90s. Instead, many people now use a combination of cash and credit cards while abroad — similar to how they pay for purchases when at home.

Foreign merchants may take payments from Visa, Mastercard, American Express and Discover credit cards, although acceptance in some countries may be limited compared to within the U.S.

To save money, try to use a credit card that doesn’t have a foreign transaction fee. Otherwise, you may pay an extra 3% or so for purchases in another currency.

However, when the merchant doesn’t accept a credit card or you have another reason for wanting to use cash, you’ll likely need the local currency.

Airports typically have currency exchange centers where you can convert money, or you may exchange dollars at a local bank. However, walking around with a lot of cash can be risky.

Using your checking account’s debit card to withdraw money from local ATMs may be the solution that fits your needs.

Potential debit card fees when traveling outside the U.S.

Generally, you won’t have trouble using an ATM in a foreign country as long as you let your bank know where and when you’re traveling. You can do this online or by calling your bank.

However, depending on your account and the ATM’s operator, you may have to pay additional fees.

• Nonbank usage fee. Your bank could charge you a fee each time you use an ATM that isn’t operated by that bank to check a balance or make a withdrawal or transfer. This can apply within the U.S., too.
• Non-ATM withdrawals. If you withdraw money from a teller at a different bank, you might have to pay a flat fee or a percentage of the amount you withdraw.
• Foreign transaction fees. Similar to the fee on some credit cards, your bank could charge a foreign transaction or foreign exchange fee equal to a percentage of the amount you withdraw or spend if you’re using your debit card for purchases.
• ATM-operator fees. As is the case inside the U.S., ATM operators in foreign countries might charge you a fee to withdraw cash.
• ATM-conversion fees. Instead of paying your bank to convert the currency, you might pay a conversion fee to the ATM’s operator.

Check with your bank to find out which fees apply to your account and consider keeping a list with you while traveling. Better yet, if you travel frequently, consider opening and using a checking account that offers a no-fee debit card.

The 3 best checking accounts and debit cards for international travel

1. Schwab Bank High Yield Investor Checking® Account

With this account, Charles Schwab Bank doesn’t charge you to use an ATM, even ones in foreign countries. The bank refunds all ATM-operator fees at the end of each month.

To open a High Yield Investor Checking account, you’ll also need to open and link a Schwab One® brokerage account. However, the brokerage account doesn’t have a monthly fee, and you don’t need to leave money in the account if it is linked to the High Yield Investor Checking account.

The checking account doesn’t have a minimum opening deposit, minimum balance requirement or monthly service fee.

There are no foreign exchange transaction fees if you make purchases or withdraw money with the Schwab Bank Visa® Platinum debit card, which is included with your checking account. Plus, you’ll earn a little interest on the money in the account, which currently has a variable annual percentage yield of 0.13%.

Lia Saunders, a travel blogger at Practical Wanderlust, says she and her husband often travel for months at a time. They signed up for the Schwab High Yield Investor Checking® Account specifically for the debit card.

“We saved hundreds of dollars [in refunded ATM fees],” Saunders says.

2. Fidelity® Cash Management Account with Fidelity®Visa®Gold Check Card

Although this is technically a brokerage account, the cash in the account is kept in an FDIC-insured bank account with coverage up to a certain amount. The account doesn’t have minimum opening or monthly balance requirements, monthly fees or ATM fees.

Fidelity will also reimburse you for all ATM fees. However, you’ll have to pay a 1% foreign transaction fee on ATM withdrawals and purchases.

3. Capital One® 360 Checking® Account

This account doesn’t have a foreign transaction fee, minimum opening deposit, monthly balance requirement or monthly service fee.

While Capital One doesn’t charge an ATM fee if you use the 360 Checking MasterCard® Debit Card to withdraw money from an ATM, it won’t reimburse you if the ATM operator charges you a fee.

However, you can avoid operator fees by withdrawing money from Capital One Bank–branded ATM or Allpoint ATMs within the U.S., Canada, U.K., Puerto Rico, Australia or Mexico.

Bottom line

Some large banks have several types of checking accounts available, with different benefits and fees for each. If you have the funds to meet minimum daily or monthly balance requirements for one of the premium accounts, you may find that the bank will waive and refund your ATM fees.  

Using a debit card that reimburses ATM-operator fees and doesn’t charge ATM fees or foreign-exchange fees can save you money when traveling abroad.

Being able to withdraw small amounts of foreign currency without having to worry about fees can be convenient, especially if you’re hopping from one country to another. It can also help you avoid leaving the country with a lot of unused currency.