Foreign transaction fees and ATM withdrawals abroad can trigger extra bank charges – here’s everything you need to know.
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Foreign transaction fees abroad explained

Going on holiday should be a stress-free experience – but when it comes to using your debit card abroad and withdrawing money from an ATM, foreign transaction fees can mean you end up paying more than you bargained for. This article will help you familiarise yourself with the ins and outs of pulling out the plastic when you’re overseas.

What kind of foreign transaction fees can I expect to be charged when I use my debit card to make a payment abroad?

When using your card abroad, your bank can levy fees. While there’s often a payment fee charge on the basis of the overseas payment itself, you could also face a foreign transaction fee. This applies to payments made in a currency different from your bank’s ‘home’ currency. Additionally, banks can also charge a currency conversion fee of an average of 1.5%, applied to transactions carried out on weekends to safeguard against changes in the exchange rate.

Even if your bank doesn’t levy any additional fees, overseas payments can still cost you. This is because:

  • Using your debit card abroad, the local currency will be converted to your home currency at the rate set by Mastercard or Visa. Most debit cards are one of these.
  • Mastercard and Visa don’t always offer the same rates.
  • Mastercard’s rates tend to be preferable to Visa’s rates, by an average of 0.27%.
  • This difference can also be more, almost three cents on the Euro – that’s €3 if you’re making a payment of €100.

Then, there’s also the FX spread. This is the difference between the rate that a bank buys foreign currency and the rate that it sells it. And guess what? It’s not always in your favour. While bank A has a FX spread that’s 0.21% cheaper than the underlying Mastercard rate, major bank B has a FX spread that’s 0.27% more expensive than this underlying figure.

For N26, the FX spread is 0% – you get the real rate.

Additionally, FX mark-ups are charged by banks on top of the FX spread fee. Bank A charges a variable rate depending on whether it’s a weekday or a weekend, ranging from 0.1% to 1.5%, whereas bank B always charges a rate of 1.75%. N26 has a mark-up of 0% – nothing whatsoever.

On top of these variable fees, card providers can hit you with a fixed fee. Bear in mind that this only applies for cash withdrawals, not card payments.

What kind of foreign transaction fees will I be charged when I use my debit card to withdraw cash abroad?

If you run out of cash while you’re abroad, you might withdraw money from an ATM – and this is different from just using your debit card to make a payment in a shop. The same kind of bank fees apply as mentioned above (namely, the FX spread and FX mark-up), but there’s also a fixed fee.

For example, major bank A may hit you with a fee of €2 per withdrawal in excess of €400/month, whereas major bank B charges you €2 – that’s €5 per withdrawal, depending on the country you’re visiting. On top of this, the ATM provider can also charge a fee of around €2 to €3 for each overseas withdrawal.

Taking all these foreign transaction fees into account, what will it actually cost me to withdraw money abroad?

Say you withdraw €100 from an ATM while overseas. This is what you might pay if you have an account with global bank B:

  • An ATM provider’s fee of €3.
  • An FX mark-up of 1.75%.
  • A cash withdrawal fee of €5.

That comes to almost €10 in fees and that’s before you even start to take into account less-than-favourable exchange rates.

The situation is a bit different if you want to send money to another bank overseas, rather than simply withdrawing it. In this case, you’ll pay a wire transfer fee. Major global bank C has a fee of €15 for incoming wire transfers and €35 for outgoing ones, while major global bank D charges €15 for incoming payments and €45 for outgoing wire transfers.

What sort of foreign transaction fees do major European banks actually charge?

It’s worth noting that the payment provider in question, i.e. Mastercard or Visa, isn’t the only thing that affects the amount you ultimately pay. There are also enormous differences between the foreign transaction fees levied by banks across the EU. Here’s an outline:

  • UK debit cards from new ‘challenger banks’ don’t charge anything for making payments abroad. Others (including major high street banks) can take up to 3% for every transaction.
  • German debit cards (known as EC cards) work similarly. For example, app-based German bank A lets you make payments and take cash out abroad without charge, while German bank B only lets you withdraw €200 overseas before incurring a fee of €2 - €3 per withdrawal. Almost all the major German banks charge a fee of an average of 1.5% to 2% on top of this, however.
  • Italian bank A charges a fee of €2 every time you use an ATM to withdraw cash outside their network (including overseas).
  • French banks don’t charge any fees for making payments anywhere within the eurozone. They charge only a small fee (usually around 1%) once you have made more than three or four overseas cash withdrawals in a single month.
  • In Spain, the situation is less appealing. Major Spanish bank A charges a fee of 4.5% on the amount withdrawn overseas, with a minimum fee per withdrawal of €3.50.

Why do banks make money on foreign currency exchange rates?

There’s no such thing as a free lunch, after all. Banks incur costs of their own when sending your money overseas, such as the fees levied by the likes of Visa and Mastercard for processing payments. And, of course, they are offering you a service by enabling you to access your money overseas – some banks believe it is right for you to be charged for this.

However, in efforts to be as transparent as possible, N26 doesn’t charge extra fees for making payments in rare currencies or at the weekend (seriously, some banks do this!) On top of this, N26 uses the exchange rate in real time, so you can get the most bang for your buck.

Your money at N26

Here at N26, our mission is to cut back on fees wherever we can. This is why most of the above fees don’t apply with an N26 account – there isn’t even an international transaction fee when you pay for something with your N26 Mastercard abroad. So, if you’re concerned about foreign transaction fees, N26 is well worth a look.

If you spend €2,000 during an overseas holiday, you might be paying €35 or more in fees alone – and if you withdraw that money in cash, you could be looking at €85 in fees. At N26, we believe there are better ways to spend that money: how about a kitesurfing lesson, for example?


We want to simplify banking for everyone. We’re bringing you a series of articles that shine a light on the basics of money, finance and all things banking-related – it’s often a lot simpler than you might think.

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