The Right Way to Use ATMs, Debit, and Credit Cards Overseas

Pile of credit cards on table, closeup

MIAMI, Florida – Not all ATMs, debit cards, and credit cards are alike, and the wrong ones can cost travelers a lot in extra fees and poor exchange rates. But, according to a new “Savvy Retiree” report from International Living, when used with a smart strategy in place, these banking tools can help make an overseas trip smooth and good value.


“Not all ATM systems and debit and credit cards are created equal,” says Dan Prescher, senior editor with International Living. “Get a debit or credit card from any-old bank, and you may pay much higher fees than you need to. Choose the wrong ATM when you’re on the road and you could pay sky-high foreign-exchange rates. But armed with a few key guidelines, it’s easy to ensure you’re keeping your banking costs to a minimum—so you can spend your money on more entertaining things.”

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A recent “Savvy Retiree” report from International Living outlines the ways travelers can make smart use of their debit and credit cards and choose the right ATMs. Here are three cost-saving tips:

  1. Seek out bank ATMs.

First, not all ATMs are alike. One example is Euronet, whose machines are ubiquitous across Europe. They pop up in hotels, airports, souvenir shops, convenience stores, and on any street where tourists are commonplace. But they can be more costly than other ATMs in several ways.

First, when a debit card is used from any country other than where the machine is, these ATMs are programmed to initially offer uncommonly large withdrawal amounts.

In Prague, for example, these machines offer withdrawal amounts between 10,000 and 20,000 Czechia crowns. In dollar terms, that’s the equivalent of $440 and $880. The reason these ATMs are programmed this way is that Euronet offers very high exchange rates compared to the official daily rate that banks use. The more dollars — and the higher the spread between the official exchange rate and the Euronet rate, the better for Euronet, and the worse for the cardholder.

The better strategy: find ATMs belonging to local banks. Exchange rates will be the same or much closer to official daily rates.

If the only ATM around is a Euronet or other non-bank ATM, select “Different Amount” if the quantities offered on-screen are excessively high. Withdraw as little as possible to get by until a real bank ATM is located.

  1. Don’t convert funds at an ATM.

Even with bank ATMs, there’s a strategy to prevent extra charges: Reject the currency conversion option often shown on the screen.

The option to convert currency typically uses a higher exchange rate. The option to “accept without conversion” will yield an exchange rate closer to the actual daily rate.

  1. Always pay in the local currency.

With credit cards, the strategy is to always choose the local currency option when given a choice.

For instance, in a Czechia restaurant or supermarket, the card-reader typically displays a message: <CAN> CZK or <ENT> EUR. This machine is offering the choice to select the “cancel” button to pay in Czechia crowns or the “enter” button to pay in euros. Choosing “cancel” selects the local currency, the credit or debit card company handles the currency conversion at or near the official exchange rate. Select the option for euros or dollars, and the merchant does the currency conversion…again, usually at a higher rate.

  1. Choose a credit card with no foreign transaction fees.

Finally, get a credit card that changes no foreign transaction fees.

Credit cards that charge foreign-transaction fees typically add an extra 3% upcharge to each transaction.

With the average cost of a four-day, international vacation around $3,500 per person,  consider what this might amount to if charged on a card that adds 3% worth of hidden charges on every purchase. With that example, you’d pay more than $100 per person extra in fees!

Lots of cards today are available without foreign-transaction fees. Make sure you read the fine print to ensure yours is one of them.