Traveling abroad can be an exciting experience, but it’s essential to be prepared for the various financial challenges you might face. One of the most common issues travelers face is figuring out how to get money from ATMs in foreign countries without falling victim to hidden fees and unfavorable currency conversions. In this article, we will provide you with valuable insights and tips to avoid these pitfalls and make your travels more enjoyable and cost-effective.
The Importance of Local Currency
When visiting a foreign country, it’s crucial to have access to the local currency, as many places may not accept your home currency or credit card. For example, the Czech Republic uses Czech crowns instead of euros, and while many businesses accept credit cards, you may need cash for certain transactions. In such situations, you’ll need to withdraw money from an ATM.
Navigating ATMs in Touristy Destinations
Touristy destinations across Europe, such as Prague, are filled with ATMs that are designed to take advantage of unsuspecting tourists. These ATMs often employ two tricks to maximize the amount of money they can extract from your foreign card:
- Encouraging large withdrawals: ATMs may suggest you withdraw large sums of money, ranging from 400 to 800 euros or more. This is unnecessary, as most travelers do not need such large amounts of cash on hand. Instead, opt for a smaller withdrawal, such as 120 euros.
- Currency conversion deception: When withdrawing money, you may be asked whether you want the transaction “with or without conversion.” This question is referring to Dynamic Currency Conversion (DCC), a service that allows the ATM or your bank to perform the currency conversion. While it may seem logical to accept the conversion, doing so can result in a significant markup on the exchange rate (up to 12.86% or more) and additional fees from the ATM.
To avoid these costly mistakes, always choose “without conversion” or “decline conversion” when withdrawing money from an ATM. This will ensure that your bank, rather than the ATM, handles the currency conversion, which usually results in a more favorable exchange rate and lower fees.
Bank vs. Non-Bank ATMs
When selecting an ATM to withdraw money from, it’s essential to understand the difference between bank and non-bank ATMs. Bank ATMs are usually more reliable and trustworthy, offering better exchange rates and lower fees. When using a bank ATM, look for options to “withdraw in local currency” or “pay in local currency” to ensure that your bank handles the conversion process.
Non-bank ATMs, on the other hand, are notorious for their deceptive practices and high fees. These machines are prevalent in touristy destinations and often have hidden fees for withdrawals, especially if you choose to accept their conversion rates. To avoid these traps, always decline conversion or pay in the local currency when using a non-bank ATM.
Paying with Your Card Whenever Possible
One of the easiest ways to avoid ATM fees and unfavorable conversion rates is simply to use your credit or debit card for most transactions. Many businesses, restaurants, and shops in tourist destinations accept cards, making it easy to pay for goods and services without the need for cash.
However, it’s essential to be aware that some card terminals at shops, restaurants, or other establishments may also ask whether you want to pay in your home currency or the local currency. As with ATMs, always choose the local currency option to ensure the best exchange rate and avoid hidden fees.
By following these tips and staying vigilant, you can save a significant amount of money on ATM fees and currency conversion costs while traveling abroad. Remember to always decline conversion, pay in the local currency, and use your card whenever possible to minimize expenses. As tourist season approaches and more people venture to foreign destinations, being prepared and knowledgeable about these potential pitfalls will help you make the most of your travels.
Extra tip: Avoid currency exchange counters. Most places will have them in the airport and scattered near stations. The exchange rates are worse than your bank 99% of the time. Best to just use an ATM and avoid the exchanges.
I stumbled upon these tricks accidentally. I didn’t bring much money to Europe, so I go to one of these ATM (forgot the brand) in Vienna Airport. The conversion rate was horrible, so naturally I press Decline, but surprised that money still comes out. I was afraid that I got scammed, but after checking my mobile banking apparently I’m charged normally according to Visa rate. That’s how I learned to always press Decline. I’m surprised it’s the case in Czech Republic and many other places too though.
In Stockholm, I only found one Euronet* ATM. It was in the Westfield MOS building. There are at least 10 Swedish bank owned ATMs in the area that follows EU law yet tourist flock that one stupid ATM.
When I was in Prague last year a kind person had placed a large sticker on an ATM in Rumunska which said in English, German and Russian “WARNING – This ATM will rob you!”
Thanks so much for this! I saved myself $18 USD on my 1st withdraw because I was on the lookout for this. Even Amazon tries to get in on the game and defaults to me paying in USD instead of local currency. Switching to pay in the local currency saves money in that case too.
Also in general I find that is best to avoid private ATMs,. IF you use banks ATMs you are less likely to be screwed to crazy levels.