This morning I was reading the travel section in my local newspaper. A reader wrote in and asked the best way to avoid foreign transaction fees. The response was that “once you’re in Europe it will be hard to totally avoid fees because you’ll either be paying extra to withdraw money at the ATM or for the foreign transaction fee with your credit card (unless yours doesn’t have one).”
I thought this response was awful. I am not planning on paying ANY foreign transaction fees abroad. To start with there are a couple of credit card companies that don’t charge foreign transaction fees. Two of these are Capital One and Andrews Federal Credit Union. I have both of these and I used both to purchase train tickets in Europe. When my statements came in the mail neither statement had foreign transaction fees. The exchange rate listed was pretty close to the published exchange rate for the day as well. (Side note: I preferred how Andrews Credit Union displays the exchange rate on the statement). Also – the Andrews Federal Credit card is a chip-and-pin card which are more common in Europe anyways.
In regards to the ATM fees – I am pretty sure Capital One does not charge foreign exchange fees for their ATM cards…but I still need to double check that. My younger brother informed me last month that Charles Schwab is a great bank. They refund ATM fees and they also do not charge foreign transaction fees. Double win. They also appear to have great customer service. I am planning to try them out while we are abroad.
In conclusion – don’t let the big banks get free money by charging you foreign transaction fees or ATM fees. Take the time to research better options.