Winner: Bank of America
Most travelers know by now that the best way to deal with money matters while traveling is to use a charge or credit card for major purchases and a debit (ATM) card for currency. Obviously, the most desirable cards in both categories are those that cost the least to use. In getting currency from ATMs, debit cards incur up to two fees: a per-withdrawal fee and a currency exchange fee at ATMs outside the U.S. The sole criterion for our Best Travel Rewards Cards for ATM Use award is lowest total fees. We focused on major nationwide banks and included only cards on ordinary retail checking accounts.
This year's winner is Bank of America. Debit cards drawing funds from any checking account at Bank of America deliver cash, with no transaction fees whatsoever, at all Bank of America locations in the U.S. That's not unusual—all nationwide banks impose no transaction charges at their own ATMs. What sets Bank of America apart is membership in the Global ATM Alliance, a group of banks in seven important countries with reciprocal no-fee withdrawal of local currency. That means travelers with Bank of America accounts can withdraw local cash, paying just the minimum currency exchange fee of 1 percent, at almost 18,000 worldwide ATMs operated by Barclays in the UK, BNP Paribas in France, China Construction Bank in China, Deutsche Bank in Germany, Santander Serfin in Mexico, Scotiabank in Canada, and Westpac in Australia and New Zealand.
The downside to Bank of America debit cards is a $5 withdrawal fee from foreign ATMs that do not belong to the Global ATM Alliance. That's above the fees many other banks charge. Thus, the Bank of America card is not recommended for travelers heading to countries where Alliance banks do not operate.
Quite a few banks—especially smaller banks and credit unions—waive or absorb transaction fees on currency withdrawals at unaffiliated domestic and overseas banks. Some financial institutions that do not offer retail checking accounts do offer ATM cards that draw funds from investment or savings accounts. And some large banks offer no-fee cards to preferred customers with large accounts. Thus, several of these cards deserve an honorable mention here. Among those that impose either no withdrawal fees or just 1 percent exchange fees are Ally, American Bank, BankDirect, Bank of Internet USA, Busey Bank, Capital One (in five states), Coulee Bank, E-Trade, EverBank, Fidelity, First Citizens Bank, HSBC, PayPal, Presidential Online Bank, Schwab, Simmons First, State Farm, TomatoBank, Umpqua Bank, USAA, and several other credit unions. Many of these banks limit account eligibility; many limit the number of transactions on which they waive fees. But for travelers who qualify, these cards are excellent choices.
The other giant nationwide banks typically charge some combination of transaction and exchange fees—sometimes both. Typical transaction fees are up to $5; exchange fees range from 1 percent to 3 percent. The worst offenders charge both a transaction and an exchange fee: Chase, PNC Bank, U.S. Bank, and Wells Fargo—the latter charges a horrendous 3 percent plus $5. Citi, which once allowed no-fee withdrawals from ATMs at its foreign branches, now charges a 3 percent exchange fee for all ATM withdrawals outside the U.S.
Bank-issued ATM cards that are branded as MasterCard or Visa, as many are, can be used to make purchases as well as get cash. Most banks treat those foreign purchases the same way they treat purchases with their credit cards. That means most of them add the standard 3 percent surcharge.
Travelers can also use credit cards to withdraw currencies from ATMs anywhere in the world. But credit card withdrawals are more expensive than debit card withdrawals.
Even with the various fees and charges, travelers who use credit and debit cards generally lose less on foreign exchange than travelers who exchange currency or travelers checks. Whatever the brand, plastic is still the best bet for overseas cash.
Do you agree or disagree with our winner in this category? Share your thoughts by leaving a comment below!
Most Customer-Friendly Airline | Best Free Airline Perk | Best Coach-Class Experience | Best Value Airline | Best Value Destination | Best Hotel Loyalty Program | Best Rental Car Loyalty Program | Best Travel Rewards Card for Domestic Use | Best Travel Rewards Card for Overseas Use | Best Travel Rewards Card for ATM Use | Best Airline Website | Best Use of Social Media | Most Pet-Friendly Airline for Checked Pets | Most Pet-Friendly Airline for Carry-On Pets | Most Eco-Friendly Airline | Best Airport for Layovers | Best Airport for Connections