Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

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minimalist
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Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by minimalist »

Just wanted to clarify the FX rates used when withdrawing at foreign ATMs using:

1. No FX fee credit card with a credit balance. (For example, Rogers MC)

vs.

2. Canadian Bank debit card

Ignoring the ATM handling fee, would the FX fee be expected to be the same? Or is there an additional 2.5% FX conversion fee on debit cards like most credit cards?
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by pmj »

The FX fee for the debit card will be stated by the debit card provider. Typically it's the same as the credit card fee - ie 2.5%.

In general terms, you're more likely to pay an ATM fee for a debit card withdrawal than for a CC withdrawal 'cos otherwise there's nothing in it for the ATM owner - whereas with a CC withdrawal, the ATM owner presumably gets a share of the cash advance fee. Not a guarantee! ISTR paying a fee on a CC withdrawal a few years ago, but I haven't recently.

OTOH, in the UK, there are no fees at any bank ATMs for debit card withdrawals from other banks. Presumably they've all agreed behind the scenes to scratch each others' backs? I suspect, but don't know if, that applies to white-label ATMs. Logically there's no rationale for extending that agreement to foreign debit cards - but I've never tested it.
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by minimalist »

pmj wrote:The FX fee for the debit card will be stated by the debit card provider. Typically it's the same as the credit card fee - ie 2.5%.
Thanks. Is that 2.5% also for ATM withdrawals?
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by Spudd »

minimalist wrote: Thanks. Is that 2.5% also for ATM withdrawals?
Yes normally that is the case.
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by kcowan »

We are a week into a 4 week trip in northern Europe and we carry an initial stash of Euros that we get at the FX place before we go. We use our no FX fee Visa that gives us 1% cashback wherever we can (a surprisingly large number of places) to preserve our cash. Then we finally run low of cash and I pay off the credit balance and put extra on the card. After that, we go to any ATM and withdraw a large amount of cash, nearly draining the positive balance, for a 1% fee. Then we start using the CC again.

Been doing this since the big banks started the FX fees on debit cards (and getting our Chase Visa from amazon).
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by pmj »

Have you experienced many instances where the merchant's CC terminal offered to charge you in C$ rather than € or the local currency? In our recent trip, just about every machine in € countries and Switzerland did that. And not a single one stated the hidden FX fee. OTOH, most machines provided the option to de-select C$ billing. If a CC machine doesn't provide that option, then rejecting the transaction will (should) change it to local currency.
It didn't happen in the UK, although I did get stiffed after the event on my car rental there.
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by Turkey1 »

I have started traveling using my Amazon credit card, no foreign currency conversion fee.
I have always used mostly cash from ATM's abroad, it wasn't until my last trip to Europe that I even realised my bank ALSO charges me a 2.5 % foreign currency conversion on cash withdrawals, this is on top of their $5.00 foreign transaction charge for using an ATM in another country. I am guessing I have always paid this 2.5 % but was not aware as it was imbedded in the amount I was withdrawing. I have called Amazon to see if I could dump a bunch of cash in advance on card and use that to draw on in a foreign country and they said no, as interest charges would apply.
Does anybody have a solution around this problem?
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by 2 yen »

Turkey1 wrote:I have started traveling using my Amazon credit card, no foreign currency conversion fee.
I have always used mostly cash from ATM's abroad, it wasn't until my last trip to Europe that I even realised my bank ALSO charges me a 2.5 % foreign currency conversion on cash withdrawals, this is on top of their $5.00 foreign transaction charge for using an ATM in another country. I am guessing I have always paid this 2.5 % but was not aware as it was imbedded in the amount I was withdrawing. I have called Amazon to see if I could dump a bunch of cash in advance on card and use that to draw on in a foreign country and they said no, as interest charges would apply.
Does anybody have a solution around this problem?
Thanks from Turkey--a must see destination!
I have 'preloaded' my Amazon for cash withdrawals. I don't recall ever being charged interest on those credit balance withdrawals. Are you sure they understood your question?

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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by pmj »

It's hard to see how Amazon could stop you. It's not as though you also have a chequing account with them that they could dump the cash back into!
This also represents no loss to Amazon, compared to, for example, paying off the cash withdrawal balance the same day, or a day or two later.
But even paying interest at the CC's regular rate would be cheaper than the 2.5% FX fee unless you leave it outstanding for more than a month.
Last edited by pmj on 14 Jul 2016 13:01, edited 1 time in total.
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by kcowan »

I pre-load my amazon Chase Visa with cash and they charge 1% for a cash withdrawal. The minimum charge is C$5 so it is best to withdraw € 350 each time depending on the exchange rate. It only needs a cash balance when the withdrawal is made so it can revert to a credit card afterwards, but it requires some timing if you are using it as a charge card as well to avoid the 2.5% vig. We take some cash then pay the balance and add some for the cash to withdraw then revert to credit again.
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by pmj »

We simplified this process by each having separate accounts. We use one as a CC, and the other for ATM withdrawals. The second one we pre-load or payback immediately. No big deal if a few small purchases go on the 2nd account.
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by Turkey1 »

Thanks for the answers.
I believe the person I spoke with understood what I was asking. My credit limit only allows me to withdraw $600.00 one time per month, (according to customer service). She also said I would begin paying interest from date of withdrawal. Maybe next time I am on a short cross border trip I will give this a try with small amount of cash.
When traveling I try to take out at least $600.00 at a time to limit the $5.00 transaction fee.
I always travel by myself, so I cannot rely on a second person with their own credit card.
I had no idea that I have always been charged this 2.5%, as this fee was always imbedded in my transaction.
It's hard to be worried about a $9.99 trading fee from TD Waterhouse, when my personal savings account has been ripping me off for years without my knowledge.
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by pmj »

Rogers also has a 0% FX fee card. $5 ATM fee outside Canada. $29 per year, waived if you use it for pre-authorized payments on Rogers or Fido bills.
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by OhGreatGuru »

pmj wrote:Have you experienced many instances where the merchant's CC terminal offered to charge you in C$ rather than € or the local currency? In our recent trip, just about every machine in € countries and Switzerland did that. ...
This option was common in Switzerland the last time I was there. But on the advice my son-in-law (who investigates these things pretty thoroughly) I always paid in the local currency. He advised me the exchange rates charged by the merchants (which may be hidden) are generally higher than the credit card rates.
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

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Turkey1 wrote:I believe the person I spoke with understood what I was asking. My credit limit only allows me to withdraw $600.00 one time per month, (according to customer service). She also said I would begin paying interest from date of withdrawal.
1. The person you spoke with did not understand your questions.

2. You can definitely withdraw your $600 (the maximum allowed as per monthly statement) more than once per billing cycle. Let the first withdrawal appear on your account online, then you can rinse and repeat. So every three business days or so you can make an ATM withdrawal, should you wish so.

3. You would pay zero interest as long as you are not owing them money, after the withdrawal (and the associated $5 or more fee).
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by Turkey1 »

So I am off to Europe for 2 1/2 months. I have called my Amazon credit card to let them know I will be using card in foreign countries, and once again they have told me that they will charge me interest from the moment I withdraw cash from the credit card. (even with having a large sum previously deposited on card) I am hoping that once again the customer service person either did not understand the question, or is unaware that this is permitted.
I will cover all bases and have my cash spread between several accounts. I have also upped my credit limit, so hoping that will also allow a larger cash withdrawal.
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by Davis »

I just checked my Sept and Oct Chase Amazon statements when I was travelling in Europe. I always made sure to have a credit balance before withdrawing cash, and I was not charged any interest.
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

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Turkey1 wrote:So I am off to Europe for 2 1/2 months. I have called my Amazon credit card to let them know I will be using card in foreign countries, and once again they have told me that they will charge me interest from the moment I withdraw cash from the credit card. (even with having a large sum previously deposited on card) I am hoping that once again the customer service person either did not understand the question, or is unaware that this is permitted.
I will cover all bases and have my cash spread between several accounts. I have also upped my credit limit, so hoping that will also allow a larger cash withdrawal.
What Davis said is correct. There will be the ATM fee. ATM fees vary by bank. Also you will pay $5 or a 1% cash advance fee. There are no foreign exchange fees above the Visa Corporate rate. So it's the ATM fee + the cash advance fee (assuming a positive balance on the card). Here is the Visa Corporate exchange rate site. Enter 0% in the fee box.

https://usa.visa.com/support/consumer/t ... lator.html

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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by leoc2 »

2 yen wrote: ...
What Davis said is correct. There will be the ATM fee. ATM fees vary by bank. Also you will pay $5 or a 1% cash advance fee. There are no foreign exchange fees above the Visa Corporate rate. So it's the ATM fee + the cash advance fee (assuming a positive balance on the card). Here is the Visa Corporate exchange rate site. Enter 0% in the fee box.

https://usa.visa.com/support/consumer/t ... lator.html

2 yen
I use the Visa ATM locator to eliminate the ATM fee.
http://www.visa.com/atmlocator/index.jsp#(page:home)
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

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leoc2 wrote:
2 yen wrote: ...
What Davis said is correct. There will be the ATM fee. ATM fees vary by bank. Also you will pay $5 or a 1% cash advance fee. There are no foreign exchange fees above the Visa Corporate rate. So it's the ATM fee + the cash advance fee (assuming a positive balance on the card). Here is the Visa Corporate exchange rate site. Enter 0% in the fee box.

https://usa.visa.com/support/consumer/t ... lator.html

2 yen
I use the Visa ATM locator to eliminate the ATM fee.
http://www.visa.com/atmlocator/index.jsp#(page:home)
Do none of these machines charge a fee? For example, Wells Fargo pops up near me. Seems hard to believe they won't charge me anything for a Visa withdrawal. (?)

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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

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2 yen wrote:Do none of these machines charge a fee? For example, Wells Fargo pops up near me. Seems hard to believe they won't charge me anything for a Visa withdrawal. (?)

2 yen
My thoughts earlier in this thread: http://www.financialwisdomforum.org/for ... 40#p577978
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by leoc2 »

2 yen wrote:
Do none of these machines charge a fee? For example, Wells Fargo pops up near me. Seems hard to believe they won't charge me anything for a Visa withdrawal. (?)

2 yen
The ATM's found by the locator website won't charge you an ATM fee. You only pay the cash advance fee. I have used this card and the ATM locator site in Europe and USA. No ATM fee.
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

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leoc2 wrote:
2 yen wrote:
Do none of these machines charge a fee? For example, Wells Fargo pops up near me. Seems hard to believe they won't charge me anything for a Visa withdrawal. (?)

2 yen
The ATM's found by the locator website won't charge you an ATM fee. You only pay the cash advance fee. I have used this card and the ATM locator site in Europe and USA. No ATM fee.
Thanks for the tip! I'll try it tomorrow.

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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

Post by cardhu »

I withdrew pesos via debit card at ATM in Puerto Vallarta a couple weeks ago … checked rate when I got home & the fee was about 2.5%.
Didn’t really need a lot of pesos, so it was still cheaper than doing the preload thing with the Amazon Visa.
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Re: Foreign ATM Withdrawals-Debit vs No FX Fee Credit cards

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cardhu wrote:I withdrew pesos via debit card at ATM in Puerto Vallarta a couple weeks ago … checked rate when I got home & the fee was about 2.5%.
Didn’t really need a lot of pesos, so it was still cheaper than doing the preload thing with the Amazon Visa.
Would be interested to know how the math works with debit. Did you have a pesos account to draw from? Amazon is $5 or 1% advance fee over and above the Visa Corporate rate. Maybe your debit forex was much better than the Visa Corporate rate.

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