One of the biggest hidden expenses of both long and short term travel is your bank card. You expect to pay a certain amount for accommodation, food, and activities, but you never really think about how much money you might be spending just trying to gain access to your money.
If you’re traveling to Europe, North America and Australia, using a credit card won’t be a problem (but that also has fees tied into the exchange rate). In most of Southeast Asia and Central or South America your stuck using cash. To access that cash, you must go to a bank or use an Automated Teller Machine.
I added up the amount of ATM fees I incurred while in Asia for six months and it came out to a hefty 19. Multiply that the five dollars my bank charged me and a usual five dollars the ATM charged me, and I was paying upwards of ten dollars just to take out $100 in cash and $200 dollars just in fees. That amount of money could go a long way when traveling in cheaper countries.
Why would I be taking out as little as one hundred dollars at a time you might ask? That doesn’t sound very cost effective. Sometimes ATM’s limit how much money you can take out. You also don’t want to be carrying thousands of dollars on your person in case you get robbed. I try to take out as much money as I feel safe to carry with me, which is usually 500-750 dollars at a time so I generally need to use an ATM three times a month to pay for all my travel costs.
There are some banks that have international deals with local banks around the world (HSBC is a good example) or even happen to have branches in many different countries (Scotiabank) but chances are the bank you deal with at home will not have ATMs or branches in the countries you might be traveling to and foreign ATMs can be incredibly expensive. So what can you do? Here are four ways to avoid ATM and bank fees while traveling.
1. Check your bank’s rules on foreign ATM fees
With my current Canadian bank (Royal Bank of Canada), I can pay 15$ a month for a bank account that allows me three non-RBC ATM transactions per month. This account will automatically save me $15 if I use my card a few times a month on non-RBC ATMs, which would pay for the cost of the account. However, this is only relevant if I am in Canada or the United States. Outside those two countries I was being charged $5.00 a transaction plus ATM fees. Since my bank doesn’t have a decent option for banking abroad, I needed to do some research on a bank that would make getting my money out a little cheaper.
2. Find a bank you can travel with
There are banks that don’t charge fees anywhere in the world, but they are far and few between. I’ve heard of Charles Schwabb in the United States that does not charge ATM fees or pays them back. Search out all the banks in your country and see what kind of fees each charges and pick the one that offers the best deal. It is a lot of work but most have all the information needed on their websites.
3. Search out ATMs that do not charge a fee
Not all ATMs charge a usage fee and it does take time to test each one to see its charge. You might not always be able to find one but there are often multiple ATMs near each other. It is worth it to save a few dollars, because hey, in some countries, $5.00 will get you a hostel bed for the night.
4. Get a local bank card if staying long term
And finally, if you happen to be staying long term, open up a local bank account and get a debit card that allows you access to your money for free.
It might take a little time and effort, but it’s worth it in the end to know you aren’t wasting your hard earned money on ridiculous banking fees. Then you can spend it on more exciting things, like that bucket of beer as you watch the sunset on some white sand beach or that bungy jump you were hoping to do.