When it comes to withdrawing money from an ATM or using your card abroad, foreign transaction fees could mean you’ll end up spending more than you anticipated.
Banking Basics

Foreign Transaction Fees When Traveling Abroad

Going on vacation should be a relaxing experience — but when it comes to withdrawing money from an ATM or using your card abroad, foreign transaction fees could mean you’ll end up spending more than you anticipated. Thankfully, there are ways to familiarize yourself with the ins and outs of paying and getting cash while you’re travelling outside of the U.S.

What are foreign transaction fees?

In a nutshell, foreign transaction fees are charges you may incur while using your card internationally. These often apply to transactions made in currencies different from your own. Additionally, banks can also charge a currency conversion fee of an average of 1.5% to safeguard against changes in the exchange rate.

Even if your bank doesn’t charge any additional fees, overseas payments can still cost you. When you use your debit card abroad, the local currency will be converted to your home currency at a rate set by Visa or Mastercard, and these two tend to differ.

There’s also the difference between the rate that a bank buys foreign currency, and the rate that it sells it. For instance, one bank may have a foreign exchange spread that’s cheaper than the underlying Visa rate, while another could have a spread that’s more expensive than this underlying figure.

On top of that, there might be additional foreign exchange mark-ups added. Some banks may even charge a variable rate depending on whether it’s a weekday or a weekend.

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

Who you bank with, and not only payment provider in question (i.e. Mastercard or Visa), will greatly affect the amount of fees you end up paying abroad. There are huge discrepancies and philosophies between foreign transaction fees levied by banks in the U.S.

Here are a few likely scenarios:

  • Debit cards from certain banks will not charge you for making payments abroad. Others can take up to 3% for every transaction.
  • Banks may charge a fee every time you use an ATM to withdraw cash outside their network (including overseas).
  • Banks may charge a percentage of the amount withdrawn, with a minimum withdrawal fee.

Why do banks make money on foreign currency exchange rates?

There’s no such thing as a free lunch. Banks incur costs of their own when sending your money overseas, such as the fees levied by entities like 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 there should be a cost associated with this.

What foreign transaction fees could I be charged for withdrawing cash abroad?

Needing cash while you’re traveling is often an unavoidable reality, and chances are you’ll have to withdraw money from an ATM at some point of your trip. Many of the same foreign exchanges mentioned above apply to cash withdrawals, but there’s usually also a fixed fee to factor.

For example, a bank may have a fee of $2 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, which adds up.

Here’s a breakdown:

Say you withdraw $100 from an ATM while overseas — here's a sample breakdown of what you might pay end up paying:

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

That comes to almost $10 in fees, and that’s before accounting for exchange rates.

The situation is also different if you want to send money to another bank abroad, rather than simply withdrawing it. In that case, you’ll have to pay a wire transfer fee. These fees vary by bank and could be in the range of $15-25 for incoming wire transfers and $35-35 for outgoing ones.

Traveling this year? Here are three things you should keep in mind before packing your bags.

If you’re looking forward to an international getaway at some point this year, there are some things you’ll want to keep in mind ahead of time to avoid nasty surprises.

Check the currency exchange: Checking currency exchange rates before your trip has several advantages, most importantly perhaps that you don’t end up over-withdrawing local currency. There are a number of reliable sources online like XE and Travelex that will help you have an accurate idea of how much you should pay.

Consider your withdrawal options ahead of time: Don’t be fooled by those shiny airport currency exchange kiosks as they often come with less than favorable exchanges, and may charge fees. While ATMs abroad will likely give you the best possible exchange rate, there are often out-of-network fees to consider. Check your bank’s existing network of fee-free international ATMs, or buy currency ahead of time from a service like Travelex.

Open a checking account without foreign fees: If your bank charges foreign transaction fees, you might consider opening a checking account that allows you to pay abroad without extra transaction or exchange fees. While some fees might be harder to avoid than others while travelling, getting an account with strong travel features will pay off in the long-run.


We believe it’s important to be transparent, with no sneaky hidden fees – no minimum account balance, no maintenance charges, no insufficient fund fees. Open an N26 account and experience mobile banking with no foreign transaction fees when you pay with your N26 debit card abroad. You’ll also enjoy practical travel tools like the ability to enable foreign payments right from the app, and get instant notifications on all transactions.

The N26 account is offered by Axos Bank®, Member FDIC. N26 Inc. is a service provider of Axos Bank. All deposit accounts of the same ownership and/or vesting held at Axos Bank are combined and insured under the same FDIC Certificate 35546. All deposit accounts through Axos Bank brands are not separately insured by the FDIC from other deposit accounts held with the same ownership and/or vesting at Axos Bank. The N26 Visa® Debit Card is issued by Axos Bank pursuant to a license by Visa U.S.A. Inc. The N26 Visa Debit Card may be used everywhere Visa debit cards are accepted.

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