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The smart traveler knows to seek out credit cards with no foreign transaction fees before they travel. These fees come into play when traveling outside the United States, on withdrawals made from banking machines and on purchases.
A typical foreign transaction fee comes in at roughly 3 to 5 percent of your total purchase. They might seem small on a transaction-by-transaction basis, these fees can quickly add up.
A traveler might try to avoid accruing foreign transaction fees on credit cards. But when using debit cards abroad, travelers might not know they could also be prone to these fees on their checking account transactions. While some checking accounts charge a foreign transaction fee, there are a few banks with no ATM fees on foreign transactions.
Using an ATM abroad can cost you up to about $5 per transaction and possibly even an added foreign transaction fee – up to 3 percent – depending on your checking account. That’s at least a cup of coffee, if not an entire meal. You could be saving every day if you made the switch to a checking account without foreign transaction fees.
Best Checking Accounts to Avoid Foreign Transaction Fees
Capital One 360
Capital One has locations only in a few states, but you can use its mobile and online banking apps to take advantage of the no-fee checking account. Not only are there no foreign transaction fees, but for all withdrawals made at Capital One or Allpoint ATMs, there are no additional fees, either. Plus, there are no monthly charges no matter what your balance.
First Republic Bank
Clients of the First Republic Bank have free access to over 800,000 ATMs around the world, no transaction fees, and no ATM fees from any of the non-linked machines worldwide. The catch? The ATM Rebate Checking Account has a $25 monthly fee, but clients can waive it if they maintain an average monthly balance of $3,500.
Although foreign transaction fees of 2 percent apply to some of the more basic US Bank Checking Accounts, clients with a Platinum or Premium account get all non-U.S. ATM fees waived. However, non-U.S. Bank ATM owners will charge their own fee unless they participate in the MoneyPass Network, so choose your ATM wisely. The Platinum and Premium accounts do come with hefty monthly fees, of $17.95 and $10.95, respectively.
No matter where you travel, TD Bank Premier and Relationship Checking accounts waive all ATM fees, as long as you maintain a balance of $2,500. Both checking accounts have a rather steep monthly fee of $25 unless you meet a strict $2,500 minimum daily balance or a $20,000 minimum combined deposit, respectively.
The Schwab Bank High Yield Investor Checking Account is available to people with a Schwab Brokerage Account. It has no foreign transaction fees, no monthly fees, and an annual percentage yield of 0.15 percent. This interest rate alone sets it apart from its competitors. They also reimburse unlimited foreign ATM fees for their clients.
Not all Citibank checking accounts were developed with travelers in mind, but Citigold checking account holders are guaranteed to have foreign ATM fees waived. All Citibank members also have access to fee-free ATMs in over 19 countries.
Maybe you don’t travel often, or maybe when you do travel, you rarely rely on your debit card to access your checking account. Still, finding out exactly when and what your bank could charge you if you did make a purchase or a withdrawal can make for smarter decisions while traveling.
Author: Jeff Gitlen