avoid foreign transaction fees with the Wise Debit Card

5 Strategies You Need to Know to Avoid Foreign Transaction Fees with the Wise Debit Card

All travelers—from seasoned professionals to first time jet-setters—can easily fall victim to unnecessary foreign transaction fees. Don’t let this be you! Get the Wise Debit Card and never worry about the fees you’re paying again!
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Whether you plan to go all out on your next trip or want to get where you’re going on a budget, it makes sense that you’ll want to make your money go as far as possible! You’ve worked hard to have this experience, so it’s important to get everything you can out of it.

While there are all kinds of tips for saving money and getting the best deals on travel, one thing all travelers can (and should!) do is learn how to avoid foreign transaction fees.

As you’ll see below, these fees come in many different (and often HIDDEN) forms, but it’s easy to avoid them if you’ve done your homework and make a plan before you travel. I’ll spell out the five most common mistakes I see people making, and show you why the Wise card can save you hundreds of dollars on your next trip.

How can I avoid foreign transaction fees?

Traditional ways of spending money while traveling almost ALL cost an arm and a leg, due to predatory fees charged by banks, payment processing companies, and exchange offices. That’s a lot of people looking to profit off of your trip!

The fact is, someone, somehow, somewhere down the line will have to convert the currency you have in your regular bank account to the currency of the place you’re visiting.

It doesn’t matter if that happens when you withdraw money from your ATM, tap your contactless card on a card reader, order foreign cash from your bank before you leave etc. It’s being converted somewhere in the process.

The one secret you need to know to avoid foreign transaction fees is that you can control who does the converting.

Every time you pay for something abroad there’s a good chance that you will encounter the opportunity to exert that control.

Let’s start off with who you shouldn’t be giving the control to: Not the local currency exchange office. Not the ATM of a well known global bank. Not your hotel. And not that cute mom & pop shop’s card machine screen.

None of these businesses have any kind of loyalty to you. You’re an opportunity for them to make money. Don’t forget that.

The best way to control who converts your money and avoid foreign transaction fees is to solve the problem at the source: make sure you have the right card:

avoid foreign transaction fees with the Wise Debit Card

Enter the Wise card.

The way it works is simple:

  1. You load any currency (out of the 50+ supported) into your Wise Multi-Currency Account.
  2. You use your card to pay for food, drinks, hotels – anything!
How does the Wise Card work?

If you don’t have the local currency in your Wise account already, the app will automatically and instantly convert whatever currency you do have at the real current exchange rate.

Because it’s linked to the Multi-Currency Account, the Wise card uses a smart algorithm to pay in the cheapest way possible for whatever you’re spending on.

This is most relevant to anyone who might happen to have income in several currencies – freelancers, expats, etc. For example:

Let’s say you’re an American (with savings in USD) living in France (with an income in EUR). You recently did a gig for a British company (which paid you in GBP). Your Wise account holds $100 USD, €200 EUR, and now £100 GBP.

You travel to London and make a purchase for £75 GBP. Wise will automatically take from your £100 GBP balance first, charging you absolutely nothing to make this transaction.

That evening, you go to pay your £50 dinner bill and the magical Wise algorithm kicks in. Wise will take the £25 GBP left in your account first, and then instantly calculate whether USD or EUR will give you a better exchange rate on the rest. It will choose whichever is cheapest, charging its extremely low 0.35% conversion rate.

If you’re just traveling from your home country to somewhere new, it’s a bit more straightforward. Just top up your account with money from your regular bank account, and start spending abroad!

Wise will auto-convert your currency and you’ll never have to think about whether you need to do more to avoid foreign transaction fees. You can even add your card to Apple Pay or Google Pay to really make the whole process seamless!

Unlike banks, who charge ~3% per foreign transaction, Wise will charge just 0.35% for the most common currencies.

That is a really good deal. If you wanted to spend $1000 USD during a trip to Europe with a Bank of America, Chase, or Wells Fargo debit card, you would incur $30 worth of fees. With the Wise card, you’d pay $3.50.

The Wise card is the one to trust to avoid foreign transaction fees at ATMs, with credit card companies, and with local merchants who try to charge you in your own currency.

Read on to understand the five most common money mistakes you need to stop making to avoid foreign transaction fees, as well as an in-depth review of the Wise card below!

Learn more about how Wise can save you money:

5 Common Mistakes That Cause Huge Fees While Traveling

If you’ve ever traveled abroad, you’ve probably made at least one of this mistakes before. We all have!

Most of the fees detailed here are hidden. They’re designed to catch you out and, often, you’ll never even see them noted on receipts or in your bank account, so it’s very difficult to know how much money you’ve lost to these fees over time.

Here’s the nice thing, though: All of them are avoidable with just a bit of pre-planning before you arrive at your destination—whether that’s a tourist hotspot like Venice or somewhere more off the beaten path like Lanzarote.

1. Paying ATM & Bank Fees

Using a big bank’s debit card at an ATM in a foreign countries is like begging to be charged excessive fees. Forget about trying to avoid foreign transaction fees… you’ll often be inviting as many as three fees per transaction.

Yep, that’s right. Stick your Bank of America or Wells Fargo card into an ATM while traveling and you’ll be hit with a triple charge:

  1. Out-of-network ATM fee (from your bank): usually $5 USD
  2. Foreign transaction fee for currency conversation (from your bank): usually 3%
  3. ATM fee (from the ATM’s bank): usually $3-5 USD

Let’s say you’re on a two week trip and end up withdrawing €500 EUR over the course of three separate withdrawals during that time, using a Bank of America debit card.

You’ll be hit with $15 USD total in BofA ATM fees, roughly $12 USD in local ATM fees, and another $15 USD in foreign transaction fees. That’s a total of $42 USD you just paid to your bank and the foreign bank in order to access your cash.

Now, there are some ways around this.

Your big bank may be part of a global network of banks for which they will waive their “out-of-network fee” and the local ATM operator fee. For Bank of America, this list includes the following:

  • Barclays United Kingdom (England, Scotland, Wales, Northern Ireland, Jersey, Guernsey and the Channel Islands)
  • BNP Paribas (France)
  • BNL D’Italia (Italy)
  • Deutsche Bank (Germany and Spain)
  • Scotiabank (Canada, Mexico, Peru, Chile, and the Caribbean countries: The Bahamas, Barbados, Cayman Islands, Dominican Republic, Jamaica, Trinidad & Tobago, and Turks & Caicos Islands)

From experience, though, I can say that trying to stick to this list is a huge pain.

It may not always be possible to locate one of these specific banks in a pinch, and I’ve often found that when you need money, you need money. You’ll usually suck it up and pay the ATM fees for convenience to avoid wandering halfway across whatever city you’re visiting just to take some cash out.

Using your usual debit card also comes with one more annoying life admin task that nobody asked for: needing to keep the bank updated with your travel plans so they don’t assume that any charges coming from abroad are fraudulent and lock your card when you go to use it. It can be a stressful situation to realize you need to find a way to get ahold of customer service when everyone is asleep in your home country and you have no other way to pay for things (I’m tragically speaking from experience here)!

The easiest way to avoid paying ATM fees is by using ATM’s that advertise “FREE CASH WITHDRAWALS”, and the best way to avoid those bank fees is by using the Wise card. It just takes all the guesswork out of it.

2. Paying Credit Card Fees

avoid foreign transaction fees

Just like with big bank debit cards, you have to be careful to avoid foreign transaction fees with many credit cards, which may unexpectedly gouge you.

It is important to note that, especially for US residents who can qualify for a travel credit card, there are several great options for credit cards with no foreign transaction fees. Many travel credit cards issued in other countries, however, do still charge these fees.

However, there are several major flaws with relying on a credit card while traveling abroad:

  1. Almost every credit card featuring fee-free foreign transactions has an annual fee, ranging from $95-695 USD per year. Unless you are very intentional with how you leverage the reward points on these cards, you won’t be saving very much at all using these cards, even if you avoid foreign transaction fees altogether.
  2. Credit cards are notoriously horrible options for taking out cash from ATMs. You will usually have to pay a 3% cash advance fee, on top of a potential 3% foreign transaction fee if your card doesn’t waive these.
  3. As with all credit cards, if you’re not careful with managing your statement, you can easily run into huge interest fees every month. That’s yet another life admin task to stay on top of while you would rather be enjoying your travels!

As you can see, although there may be good travel credit cards out there that don’t charge foreign transaction fees, none of them is really appropriate for the casual traveler simply looking to avoid foreign transaction fees.

3. Bringing Cash/Prepaid Cards with You

While this particular method of money management has faded in popularity in the digital age, it’s still quite common for less experienced travelers to purchase cash in a foreign currency from their home bank before leaving for their trip.

There is simply no need to do this anymore!

In addition to the safety concern of traveling to your destination with potentially hundreds of dollars worth of cash on your person, the exchange rate you get when buying foreign currency at home will never be the best one.

For example, at the time of writing, purchasing £500 GBP from Bank of America would cost $630 + a $7.50 delivery fee (even if you collect it from your local bank branch). That’s $637.50.

For reference, £500 GBP converted from US dollars with Wise would cost $594 + Wise’s $2 fee. That’s a savings for $41.50.

The same is true for prepaid currency cards, which basically act exactly the same as purchasing foreign currency in cash, except in debit card form.

4. Getting Cash at the Airport

Do your best to avoid the need for getting cash at the airport if you’re looking to avoid foreign transaction fees. These days, it has become easier and easier to either call an Uber, pay for a taxi or buy a train ticket into the city with your card – so luckily this shouldn’t be the biggest inconvenience ever.

But why is it so important to avoid foreign transaction fees at the airport?

Because, if you do need cash, the exchange companies know they’re holding you captive.

Exchange offices at the airport offer pretty much the worst possible exchange rates you can imagine. Again, their job is to make a profit on your needs – and they know you’ll pay what it takes to get the cash they have on hand if you really do need it.

When it comes to ATMs in the airport, it’s a similar story to avoid foreign transaction fees. Since the early 2010s, “big bank” ATMs have been largely missing from airport arrival halls, replaced by Travelex or other foreign exchange company-branded ATMs.

These ATMs loudly advertise FREE WITHDRAWALS, but the exchange rates they offer will more than outweigh the lack of flat-rate ATM fee.

5. Choosing Your Own Currency if Paying by Card

This one is a classic, and probably the most frequent mistake I’ve seen my friends make while traveling.

No matter where you are traveling, it is extremely common to tap your card for payment at a restaurant, bar, souvenir shop, gas station—ok, so really anywhere!—and have the card machine handed back to you with a confused look by the waiter or attendant.

On the screen, you see a prompt:

100 GBP
119.20 USD

PAY IN USD?
ENTER = YES CANCEL = NO

As the impatient waiter watches you read this message in confusion, you feel your ears get hot as you hover between the two options completely unsure which to choose.

But does it really make a difference?

If you’re looking to avoid foreign transaction fees the answer is simple: Yes, always choose the local currency.

Seeing your own currency may seem far more convenient to you, as you’re better able understand the cost of what you’re paying for – especially in places where the local currency can be quite difficult to interpret, like Hungary where 100 USD is 40,795 HUF.

This is a service you are paying for though. In fact, the payment processing companies (who provide the card reader to the merchant) make a lot of their money on fees like the ones they charge for currency conversion. In 2019, it was reported that these fees can add an average of 7.74% to your transaction.

On a $100 restaurant bill, this could easily add the price of an extra drink or two! On a several-night hotel room charge, it could easily add the price of room service meal or spa treatment!

You might also fall victim to thinking that the fee your home bank charges on foreign transactions might not apply if you choose to pay in your bank’s currency. Think again.

A foreign transaction is any transaction processed by a foreign business, and has nothing to do with the currency it is processed in. Sometimes that impatient waiter will also assume you want your own currency and select it for you, so try to catch them before this happens!

It’s also worth noting that the same tip applies at foreign ATMs as well. Say it with me now – always choose the local currency if you’re presented with an option.

Avoid Foreign Transaction Fees with the Wise Debit Card

Now that we understand the mistakes you need to watch out for while trying to avoid foreign transaction fees, it’s time to revisit the Wise card – by FAR the best option for making sure you don’t fall victim to any of the hidden fees described above and that you become an expert at how to avoid foreign transaction fees altogether.

avoid foreign transaction fees with the Wise Debit Card

Refresh: What is the Wise Card?

The Wise card is actually an add-on to the Wise Multi-Currency Account.

This account—which is free to set up, by the way—allows you hold 50+ currencies all at once. You can easily transfer money from your regular bank account quickly, securely, and within the easy-to-use Wise app.

You’re able to use your Wise card for purchases in over 200 countries and for withdrawals at 2.3 million ATMs worldwide.

Pros & Cons of the Wise Card

  • Low currency conversion fee of 0.35% for most major currencies (vs. 3% charged by most big banks)
  • Receive true, current exchange rate because Wise converts your currency at the moment you spend
  • Never be charged in your home currency – Wise card acts like a local card, always
  • Up to 2 free ATM withdrawals to the value of $100 USD / £200 GBP / €200 EUR per month, with very low fees after that
  • Apple Pay and Google Pay compatible
  • Simply & easily top up your account via Wise app
  • No risk of interest charges because it’s not a credit card!
  • Secure app & your money is safeguarded according to local authorities wherever Wise operates
  • ATM fees of $1.50 USD / £0.50 GBP / €0.50 after 2 withdrawals + 2% (US) / 1.75% (UK/EU) fee for withdrawals over free monthly limit
  • One time fee of $9 USD / £5 GBP / €7 EUR for card
  • Cannot top up with cash or check
  • Not a credit card, so no chance to earn points or pay later

Learn more about how Wise can save you money:

Wise Card vs. Traditional Bank Debit Card

How exactly does the Wise card differ from your regular bank’s debit card that you use at home?

The most important benefit of the Wise card is that you will easily avoid foreign transaction fees because Wise charges a much lower fee for currency conversion than almost any traditional bank.

It also uses the fairest exchange rate at the moment you charge your card, rather than a pre-determined rate that may or may not be in your favor.

Finally, you get two free ATM withdrawals per month with the Wise card, and any withdrawals after that cost just a fraction of what your regular bank would charge for any ATM transaction abroad.

Who should use the Wise Card?

The Wise card is an excellent option for anyone who ever needs to spend in a currency different from their own, home currency! This includes:

  • Anyone traveling internationally for vacation or business who wants to seamlessly avoid foreign transaction fees on card payments
  • People who need to withdraw money from international ATMs without the triple fees usually associated with this
  • Online shoppers looking to buy from international retailers without incurring extra fees

Learn more about how Wise can save you money:

Go forth and avoid foreign transaction fees!

You will never fall victim to predatory fees while traveling again, now that you’re comfortable with the Golden Rule to Avoid Foreign Transaction Fees. To recap:

The one secret you need to know to avoid foreign transaction fees is that you can control who does the converting.

If you’re looking for a great option to avoid foreign transaction fees forever, the Wise card might be the perfect choice for you. Not only will you pay the lowest fees around to have your currency converted, but you will also avoid foreign transaction fees caused by ATMs, credit card companies, exchange offices, and foreign payment processing companies!

It’s time to start enjoying your trips without the added stress (and unnecessary drain on your bank account) that foreign transaction fees pose. Enjoy all that extra cash in your pocket! 🙂

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  1. Hi Rachel, thanks for the info above on Wise! If there is a local fee to withdraw money from an ATM, is it waived using the Wise card or reimbursed? Or are you still stuck paying the local fee when using the Wise card? Also wondering how you get your money onto the wise card and if you can add more online…since it’s hard to know how much you’ll need! Thanks in advance!

    1. Hi Rebecca! Thanks for reaching out! Let me try to answer your questions.

      If a local ATM charges their own fee, unfortunately you’ll still have to pay that yourself. Not ideal, but usually these don’t amount to too much!

      When it comes to loading money into your Wise account, this is a piece of cake! There’s a big “Add” button in the account which then prompts you through a series of steps: choosing how much currency you want to load into the account and then choosing a source (ACH transfer from your bank or debit/credit card). It’s also worth noting that it’s super easy to send the money back to your bank account after your trip if you had loaded too much in the first place.

      Hope all that is helpful, but please feel free to let me know if you have any other questions!!

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