Exchange rate fees are the fees you pay to the bank or currency exchange for the privilege of having your money exchanged from one currency to another.
Cost of Exchange Rate Fees
Exchange rate fees comprise of several fees lumped together that are paid depending on where you exchange your money unless you have a bank or credit card company that offers credit or debit cards with no foreign transaction fees.
Foreign transaction fee: Range from 1 to 3% of the amount of your transaction.
Bank, foreign bank, or currency exchange location fees: Cost depends on how much money you withdraw. Can range from a few dollars to hundreds of dollars depending on the amount of the transaction.
ATM fees: Usually costs a few dollars, ranging around $3 to $8 per transaction. If you are using an out-of-network ATM, you may be charged two fees: one for your bank, one of the foreign bank.
ATM owner fees: If using an ATM owned by someone other than a bank, you will likely be charged the ATM owner fee plus your bank's fee and possibly even the foreign bank's fee. Fees often range from $5 to $10 per transaction.
All these fees quickly add up as shown in a chart created by WalletHub.Com. Click through to see how a simple $300 withdrawal can end up costing you anywhere from $0 to over $50.
How to Avoid Paying Exchange Rate Fees
1. Use a Bank or Credit Card Company that Doesn't Change Exchange Rate or ATM Fees.
Look for banks, credit unions or credit cards that specialize in accounts for people that travel and use a global ATM network.
Possible drawbacks: You travel to a location with no ATMs or does not have an ATM in your network. Some of these types of cards require annual fees or a high balance in your bank account to use.
2. Exchange your money at your local bank before you leave home.
If you don't have a bank or credit card company that has no foreign transaction fee credit or debit card, this is the most affordable option for exchanging your money.
Possible drawbacks: You have to carry all your expected travel money in cash. You have a chance of losing your money to theft, loss, or accident. Try not to exchange more than you will spend or you will either have to exchange it back (another fee), save it for your next trip, or donate it.
3. Already Abroad: Use Your Bank's ATM, International Branch, or Banking Partner
Foreign exchange transaction fees range from 0 to 3% for most banks when you use your bank's ATM, international branch or banking partner. You can often also save on ATM fees as well.
Possible Drawback: Not being able to find your bank's ATM, international branch or banking partner and having to use an out-of-network ATM.
4. Most Expensive: Travel Center ATMs, Kiosks, Currency Exchange Stores, and Websites
Airport, train, and bus stations often have very conveniently placed currency exchange ATMs, kiosks, and stores for you to exchange your money right at entry into the country. You can also use online websites that will deliver the money directly to your door.
Possible Drawbacks: Most expensive option for exchanging your money. We highly recommend using these options as last resort or you will pay the highest amount of exchange rate fees that you can pay. Scamming operations also target the ATMs in these locations more often, so take care to examine the machine carefully before using.
6. Ask your bank to raise your withdrawal limit and take larger transactions at one time.
Because you can take more money at once, you can limit the number of transactions, thus saving money on transaction fees.
Possible Drawbacks: You have a higher limit on your card if it gets stolen and you're carrying higher amounts of cash. If you use out-of-network ATMs, you'll pay extra fees and possible surcharges from your bank.
5. Don't allow sellers and vendors to charge your credit card in your currency.
Instead, have the amount charged in the local currency. Most of the sellers and vendors that offer this option are charging you a convenience fee for doing this and it's completely unnecessary. It does not help you avoid transaction fees from your credit or debit card company.
- 1 Cost of Exchange Rate Fees
- 1.1 How to Avoid Paying Exchange Rate Fees
- 126.96.36.199 1. Use a Bank or Credit Card Company that Doesn't Change Exchange Rate or ATM Fees.
- 188.8.131.52 2. Exchange your money at your local bank before you leave home.
- 184.108.40.206 3. Already Abroad: Use Your Bank's ATM, International Branch, or Banking Partner
- 220.127.116.11 4. Most Expensive: Travel Center ATMs, Kiosks, Currency Exchange Stores, and Websites
- 18.104.22.168 6. Ask your bank to raise your withdrawal limit and take larger transactions at one time.
- 22.214.171.124 5. Don't allow sellers and vendors to charge your credit card in your currency.
- 1.1 How to Avoid Paying Exchange Rate Fees