Travelling abroad may be an exciting experience but not when you check your bank balance and discover a bunch of international ATM charges on your statement that you did not expect to appear. Withdrawing money from an ATM abroad can turn out to be quite expensive and reduce your holiday budget substantially. Numerous Australians who travel to such popular destinations as Europe or Bali incur huge losses from unexpected foreign ATM fees without being aware of this.
Being familiar with the intricacies of international cash withdrawals helps you avoid additional costs. You will know the types of charges you have to pay and thus keep your travel expenses down.
Fees You Need to Expect
To be able to avoid unnecessary spending, you first have to fully realise what types of charges apply when using an overseas ATM to withdraw cash.
Banks’ Charges
Your bank from Australia might charge a one-time flat fee for every foreign ATM transaction. The amount of this additional fee is around $5, which applies for every withdrawal. It might become very costly within just two weeks of holidaying in a foreign country.
Foreign ATM Operator Fees
In addition to a fee from your Australian bank, the bank or independent operator owning the ATM might charge its own flat fee for its service. You will be notified about this charge on the ATM screen before confirming the transaction details. Private ATM operators located in popular tourist destinations are especially infamous for imposing exorbitant fees.
Currency Conversion Fees
Your bank applies a foreign transaction markup in addition to a wholesale exchange rate when exchanging funds. The foreign transaction margin is a percentage fee applied to the entire amount of foreign currency withdrawn. Typically, the fee is equal to three percent of the transaction volume.
Ways to Minimise Foreign ATM Charges
Avoiding ATM-related additional fees while travelling is possible. The following tactics might help you save money.
Obtain Fee-Free Debit Cards
Look for special accounts offered by banks in Australia that allow you to avoid international withdrawal charges completely. Some banks provide premium accounts that even reimburse third-party fees charged in a foreign country. It is definitely worth considering opening one of such accounts prior to flying abroad.
Withdraw More Cash
If the majority of fees applied while using ATMs abroad are flat fees, withdrawing smaller amounts of cash often proves very costly. To minimise foreign transaction costs, try to plan your cash withdrawal to be as substantial as possible. Remember to put any excessive cash under lock in the hotel safe.
Use In-Network ATMs
Some Australian banks cooperate with particular banking systems abroad and therefore allow clients to use in-network ATMs without any fees from the third-party operator. You should check your banking application for the global ATM location locator tool to find a free ATM near your accommodation.
Refuse Dynamic Currency Conversion
Often ATMs in foreign countries give you an opportunity to use dynamic currency conversion. However, you should refuse because the service provides poor exchange rates and merchant mark-ups. Always select the option of paying in the local currency and let your bank handle currency conversion instead.
Use Cards That Do Not Charge Overseas Fees
In addition to avoiding additional charges on foreign ATM transactions, you need to think about minimising other foreign transaction fees. Having a card from the likes of ING that does not charge any transaction fees ensures better exchange rates on other activities such as booking hotel rooms and enjoying dining and tours abroad.
Have More Fun While Travelling
Thinking ahead before leaving for holiday in advance will be beneficial to your holiday budget. Planning your financial strategy in terms of cards you have to take and knowing how foreign ATMs work will save you plenty of money. Spend some time choosing appropriate accounts and obtaining a travel card, if necessary.
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