VISA / MasterCard have the best foreign exchange rates a traveller can get, so using your VISA / MasterCard debit or credit card to withdraw cash overseas would make more sense than exchanging money at a foreign exchange bureau, correct? Well, yes and no. If you don’t use the right card or you don’t use it in the right way, bank fees can still add up.
So, how do you withdraw cash overseas? As a general rule of thumb, Use the card that incurs the lowest foreign transaction fees (C) and cash advance fees (F). If you use a credit card for cash withdrawals, ensure it is topped up or in debt to avoid being charged interest on cash advances (G).
- Ensure you can access your credit card account/s and transaction account online to check your balance and top up your card (via online transfer from your transaction account) as needed.
- Money transfers (especially between banks) may take up to three days to clear, so constantly monitor your card balance and top up a few days before withdrawal.
- If your bank sends you an SMS whenever you transfer money online, check with your mobile provider if you can receive an SMS at your overseas destination (this will depend on your mobile contract). If not (or in doubt), speak to your bank about other means to facilitate two-factor authentication. Nowadays, many banks allow you to generate a one-time PIN offline (via their mobile banking app or a physical one-time PIN generation device).
Shopping around is the only way to avoid being charged withdrawal/ATM service fees (E). If the overseas ATM provider charges the fee, the ATM will display the amount before you finalise the transaction. So, if it’s exorbitant and you are not in a hurry, press cancel and check an ATM from a different provider.
As discussed in our debit/credit card guide, withdrawal limits are also an issue (per transaction and/or day). Some ATM providers only allow a very small amount to be withdrawn, which means you would have to withdraw more often, incurring all related charges. So again, shop around.
- The withdrawal limit is hardly ever displayed. If there is a bank clerk or security guard in the vicinity of the ATM, they may know the withdrawal limit. So, ask them.
- Otherwise, it’s trial and error: Start with the amount you want to withdraw (the ATM will not give you cash if you’re above the limit) and work your way backwards. If it’s too low, cancel the withdrawal and try using a different bank’s ATM.
Any safety tips?
First and foremost, ask yourself how much you would be prepared to lose if someone stole your cash. Only withdraw that amount each time you go to an ATM.
Preferably, withdraw your cash from ATMs inside banks (during opening hours), as you have more control over who looks over your shoulder. They have security cameras, and if the ATM keeps your card, you can walk straight into the branch (fortunately, this never happened to us, but you never know). Always put the cash away before you leave the bank. Choose a time to withdraw when you know you can return to your accommodation.
Pick an ATM where it can’t easily be tampered with. Airports and shopping centres usually have security cameras everywhere (and way too many people go through for tempering attempts to go unnoticed). Always check your surroundings (including when walking from the ATM to your accommodation), hide your PIN when you enter it, and don’t put your card into an ATM that looks suspicious.
Want more tips like this to stretch your travel budget further? Follow our handy guides below.
What do we do?
We tend to withdraw no more than (the equivalent of) USD400 at any time. We are prepared to lose USD200 per person if someone steals all our cash.
As we travelled around the Americas, we found considerable differences in withdrawal / ATM service fees (from zero with Banco Pichincha in Ecuador to more than USD5 per transaction with RBC / Royal Bank of Canada in Trinidad and Tobago) and ATM withdrawal limits (from USD150 per transaction with Bank of St Lucia in St Lucia to more than USD600 with Banco Pichincha in Ecuador).
Foreign Pensions
Do you receive an overseas pension or pay tuition and living expenses for a child studying overseas? Money transfers between countries can be costly if you don’t use the right service provider.
We have bank accounts in New Zealand, Australia and Germany, and we move money between countries to pay bills or alter our investments. Over the years, we have used several different services, and our best experience has been with OFX and XE Money Transfers. Both provide comprehensive currency services for individuals and businesses, competitive FX rates, and fast and easy money transfers via their websites and mobile apps. We constantly check the rates for both and then choose the better one.
What has been your experience when using an ATM overseas?
I wrote this travel finance article based on my own experience. Like most people, if you travel overseas, withdraw cash from an ATM, and have something to add, don’t hesitate to contact me.Â
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