Using an ATM Abroad: Fees, Exchange Rates and the “Charge in Dollars?” Trap
The screen asks a simple question: “Would you like to be charged in USD?” It sounds helpful, and you’re tired after a long flight, so you tap yes. That one tap can cost more than every other fee on the withdrawal put together.
Getting cash from an ATM abroad is usually still the cheapest way to get local money, much better than an airport exchange counter. You just have to know where the fees hide and which button to press.
The fees you can run into
A single withdrawal overseas can carry up to four separate costs. Not every bank charges all of them, but it helps to know what to look for:
- Your bank’s out-of-network or international ATM fee. A flat charge per withdrawal, often a few dollars.
- A foreign transaction fee. A percentage of the amount, commonly around 1% to 3%, added because the money changed currencies.
- The local ATM owner’s fee. Some countries rarely charge one; in others, machines in tourist areas add a noticeable charge. The screen should show it before you confirm.
- A poor exchange rate, if you accept the machine’s offer to convert to dollars. More on that below.
Some debit cards waive the first two, and a few banks refund foreign ATM fees. Others don’t. It’s worth a look at your account’s fee schedule before you go, and our guide to ATM fees explained covers how these charges work at home, too.
The “charge in dollars?” trap
That offer has a name: dynamic currency conversion. The ATM, or really the bank running it, offers to convert your withdrawal into dollars on the spot, so you see exactly what you’ll pay. The catch is that it sets the exchange rate itself, and that rate is usually much worse than the one your own bank or card network would use.
When you decline, your card network converts the amount at its own rate, which is normally close to the mid-market rate you’d see in a currency app. Your bank may add its foreign transaction fee on top, but the total still tends to come out lower than the machine’s “convenient” offer.
Always choose to be charged in the local currency. If the screen says “without conversion,” “local currency” or shows euros, pounds or pesos, that’s the one you want. Same rule for card terminals in shops and restaurants.
The wording varies, and some machines make the bad choice look like the default, with the “accept” button big and green. Read the screen slowly. If you’re unsure, cancel and start over. A cancelled withdrawal costs nothing.
Before you leave
A little prep at home saves most of the hassle overseas:
- Check your card works abroad. Many banks no longer need a travel notice, but some still flag foreign withdrawals as suspicious. Turning on app alerts helps you spot a block quickly.
- Know your PIN as digits. Many keypads abroad show only numbers, so a PIN you remember as letters won’t help. Most of the world uses four-digit PINs; a longer one may not work everywhere, so ask your bank if yours is longer.
- Know your daily limit. Your bank caps how much you can take out per day, and a local machine may cap a single withdrawal lower still. Our post on ATM withdrawal limits explains how those caps work.
- Bring a second card from a different account, kept somewhere other than your wallet. If one card gets swallowed by a machine, you’re not stuck.
- Save your bank’s international phone number. The number on the back of the card is often toll-free only inside the US.
At the machine
Pick ATMs attached to real bank branches when you can, ideally inside the lobby or in a well-lit spot. Standalone machines in tourist zones and convenience stores are more likely to be run by independent operators with higher fees and the dollar-conversion pitch. Bank machines are also less likely to be tampered with. Our guide on how to spot an ATM skimmer works just as well abroad as it does at home.
Since many of the fees are per withdrawal, taking out fewer, larger amounts usually works out cheaper than lots of small ones. Balance that against how much cash you’re comfortable carrying.
In the UK, for example, it’s easy to find a high-street bank machine. You can look up branches of Barclays or the Bank of Scotland before your trip. Most UK cash machines don’t charge a fee to use them, though some standalone ones in shops and bars do and say so on screen.
If something goes wrong
If the machine keeps your card, call your bank right away and lock or cancel it in the app; don’t wait for the branch to open. If cash didn’t come out but your account was charged, note the ATM location and time, and dispute it with your bank. If the screen shows a fee you didn’t expect, you can almost always cancel before confirming.
The short version to remember
Use bank-owned ATMs, take out larger amounts less often, and always decline being charged in dollars. Do those three things and an ATM abroad is one of the cheapest, simplest ways to pay your way through a trip. Then, back home, finding cash is easy again with our ATM finder.
