Using an ATM overseas isn’t like withdrawing from a cash machine in the United States. If you rush to agree to terms without paying close attention, you could wind up losing hundreds of dollars on unnecessary conversion fees.
I wish I had warned my brother about this when he visited me in Athens, Greece, this summer. As we were exploring the historic Plaka district one hot afternoon, he excused himself to withdraw money from an automatic teller. A few minutes later, he returned with 1,000 euros ($987.37). The cost: $1,219.
That couldn’t be right, I told him. But his receipt from a company called Euronet showed the breakdown: a transaction fee of 3.95 euros, an exchange rate of 0.82 euros to the dollar and a 13% markup from the going exchange rate.
I asked him whether the ATM had disclosed these expenses during the transaction.
“I saw the 3.95 euro fee,” he said. “But I didn’t notice the exchange rate and the markup.”
Many customers also fail to notice unfavorable exchange rates that allow some companies to cash in.
“That’s one of the hidden ATM costs,” said Arun Tharmarajah, head of European banking and expansion at Wise, a financial tech company that specializes in online money transfers. “Customers don’t know about them.”
So why am I kicking myself about these high ATM expenses? Because I knew about them, and I should have said something.
I routinely hear from readers who report fees and surcharges that almost make the exchange rate from the ATM in Greece look like a bargain. And back in 2020, when I was living in Lisbon, Portugal, I encountered a pricey ATM operated by Euronet.
I had spent the last of my euros on a loaf of fresh pão de centeio at a cash-only local bakery. Just across the street, I spotted an ATM. I was relieved when it accepted my card, but that feeling quickly gave way to dismay. The exchange rate looked off. Instead of my U.S. dollar being worth 0.90 euros, it only gave me 0.80.
Then I checked the numbers: The machine charged a $4 fee, plus a 12% markup — displayed on the screen in small print — for exchanging my dollars.
Euronet Worldwide operates a network of more than 50,000 ATMs in 63 countries, according to the company.
Stephanie Taylor, a spokesperson for Euronet Worldwide, said all of its charges are “clear, transparent and prominently displayed” before every transaction. “The customer may opt out of the transaction at any time at no cost,” she said in an email.
She said that Euronet is committed to offering convenient cash to people around the world, but that there is a cost involved with providing this service, “which we believe is fair and reasonable.”
Commissions on the rise
Simone Semprini, who lives in Lisbon and is the CEO of TourScanner, a comparison site for tours and activities, says high ATM fees are a big concern for his customers.
“In the last few years, we have seen the rise of ATMs that charge huge commissions,” he said.
The ATMs endear themselves to locals in two ways. First, they handsomely compensate the shopkeepers who host them. (Merchants have told Semprini that they receive up to $1,000 a month to keep a cash machine at their location.) And they also allow customers with a bank account in the ATM’s home country to withdraw with lower fees.
Greg Grobmyer, a dentist from Tennessee, says he was stunned when he returned from a trip to Poland and found $100 in commissions and fees on his credit card bill. He had found a cash machine in Kraków after needing to settle a hotel bill. Although the exchange rate didn’t look great, he didn’t run the numbers before accepting his withdrawal.
“It is unnerving to see those not-so-tiny commissions mounting up to hundreds of dollars,” he said in an email. “Especially if you can avoid them.”
How to avoid high ATM charges
So how do you avoid high ATM charges? Preparation is key.
Call your bank before you leave the country to find out what kind of out-of-network ATM fees it charges for overseas transactions. Some banks waive the fees or will credit you after you return to the United States.
Michael Foguth, founder of Foguth Financial Group in Brighton, Michigan, recommends calling your bank before your trip to order some currency of the country where you’re traveling. He says it may be less expensive, but not free. It requires an in-person visit, and your bank may also offer a less favorable exchange rate when you buy foreign currency.
There are workarounds once you’re on the ground. Mine was to head to a bank ATM, which may give you a better exchange rate. However, it’s not a perfect solution: Halfway through the transaction, the machine asked whether I wanted to conduct the transaction in dollars or euros. As with credit cards, it’s best to conduct transactions in the local currency and let your bank do the conversion.
Another fix: using a multicurrency debit card to reduce your exchange costs. The financial services app Revolut, for example, converts your money at the more favorable interbank rate. (That’s the rate banks charge each other to exchange money.)
For transactions at out-of-network ATMs, Revolut doesn’t charge a fee for withdrawals of up to $1,200 (or the local currency equivalent) per month. After that, it charges a 2% fee of the value of an ATM withdrawal.
Wise, another popular app, also uses the real rate and charges for exchanges on a sliding scale. It’ll cost about $4 to convert $1,000 to euros. For ATMs, there’s no charge for the first $250 in a month, and you pay a 2% fee for anything above that.
Andy Abramson, who runs a communications consultancy in Las Vegas, has used both services and says he prefers them to traditional bank transactions.
“I load them up with money and then use them when traveling,” Abramson said. “I can add money when needed in seconds and be spending locally in local currency without any fees.”