How to Get the Best Exchange Rate at Foreign ATMs

I’m going to teach you how to get the best exchange rate at foreign ATMs.

This is a very important topic because it can save you lots of money.

And lots of people spend hundreds (or even thousands) of dollars on excessive fees when using currency exchange services while traveling.

Why You Should Use Foreign ATMs

Foreign ATMs are extremely useful for several reasons:

1. They minimize the amount of cash you need to keep on you at any one time.
2. They save you time by allowing you to skip the in-person currency exchange process which involves lines and showing your passport.
3. You can get the best exchange rate available to your bank. (More on this in the next section.)

So the days of packing in the total amount of cash needed for your trip should be over.

But anytime you withdraw cash from a foreign ATM you run the risk of being charged excessive fees. These fees generally come in the form of unnecessary withdraw fees, foreign transaction fees, and/or unfavorable currency exchange rates. (This is where the ATM operators make their profit.)

Now let’s discuss how to avoid the excessive fees and make sure you get the best currency exchange rate available to you.

Getting The Best Exchange Rate at Foreign ATMs

This all comes down to two things: your bank and the options you select when using foreign ATMs.

Your Bank and Checking Account

The best checking accounts are automatically setup to give you the best foreign exchange rates available to your bank.

And many banks have already negotiated deals with the largest ATM networks that limit the types of fees you will be charged. (The fees are often charged then credited right back to you due to reimbursement agreements.)

But you need to make sure your account receives these benefits automatically without needing to be manually enrolled.

So before you travel, be sure to call your bank or visit a branch office to ask about foreign withdraws and to confirm you get access to the best FX (Foreign Exchange) rates.

If you don’t have these benefits or they are unavailable at your bank, you might need to switch banks or open a second account at a bank that does offer them.

Selecting the Correct Withdraw Option

Now for the part that trips most people up.

Most foreign ATMs are configured to give you multiple exchange rate options when you go to withdraw cash. And these options are often vague or difficult to understand.

If you select the correct option you get your bank’s best exchange rate that is available at the time of withdraw; this results in more cash to you.

But if you select the wrong option, you will get a less favorable exchange rate, and less cash.

So you need to understand exactly what to look for when withdrawing cash from a foreign ATM. Now let’s look at an example.

How to Withdraw Cash from a Foreign ATM (the right way)

Here is an example of a classic currency conversion option that most people screw up:

Most people will just hit “Accept Conversion” because math is involved and they have no idea what’s going on. This is wrong; the correct thing to do is to click “Decline Conversion”.

The “Decline Conversion” option confuses most people, because they assume declining will mean they won’t get any cash. But this incorrect. By clicking “Decline Conversion” you are declining the overpriced exchange rate (9.95% markup in above photo) so that you get your bank’s more favorable exchange rate. So you will still get your cash, and more of it!

Remember: 99% of the time you should select the “Decline Conversion” option.

Also, don’t ever hesitate to cancel a transaction if you are unsure of what you are doing. This is especially true if English is not working. Just find a different ATM.

Next Steps

Now that you know how to get the best change rate at foreign ATMs, here are several additional steps you can take.

Just be sure to complete these before you travel:

• Confirm that you are automatically eligible to receive the best exchange rate available to your bank when making foreign cash withdraws.
• You should not have to pay extra for this. If you are not already receiving this benefit, ask if they can enroll you for free.
• If you don’t qualify for the bank’s exchange rate then consider switching to a new bank or opening up a second account at a different bank that does offer this.
• Also ask about any foreign withdraw fees you will be charged for using overseas ATMs. (In many cases you should automatically have certain fees refunded to you.)
• It is still common for the foreign ATM operators to charge a nominal fee for use of the ATM, but it should be a reasonable fixed amount.

Lastly, check out The Ultimate Guide to Traveling with Cash. This is an article I wrote on cash management and protection when traveling abroad.