Certain items simply cannot be purchased with plastic. This is particularly valid when visiting other countries where credit cards aren’t as often accepted. This problem fortunately has a simple fix: several banks and fintech firms now provide debit cards that cover ATM and foreign exchange costs when withdrawing cash from ATMs worldwide. Additionally, when you convert U.S. dollars to the local currency you’re withdrawing, this will guarantee that you’re getting a fair exchange rate.
Although it may seem convenient to exchange money as soon as you land at your destination, currency exchange kiosks, which are a familiar sight in most international airports, should only be used as a last resort. Their lack of value offsets any convenience they may provide. You will receive significantly less of your preferred currency than if you took it out of an ATM because of exchange rates that are substantially worse than the genuine market conversion and extra service fees.
It may not always be easy to choose the finest debit card for your travel needs, so we’ve compiled a list of the top three options to make the decision easier. We are not paid to promote the products listed below. Simply said, we believe they’re all excellent choices for accessing your money without any fees when visiting other countries.
How Do Debit Cards Work?
Even though it may seem simple, I believe it’s crucial to define what exactly a debit card is. Although this isn’t a novel idea—given that the majority of people most likely already own one of these in their wallet—you might not give it much thought.
We talk a lot about cards on this site and how they may help you travel more for less, but when we talk about cards most people mean credit cards, where you are using the card to make a purchase on credit or to borrow money from the issuing bank with the assurance that you will pay it back. As a means of rewarding you for using the card, you are frequently given points, miles, or cash back.
When you make purchases with a debit card, you are spending your funds. Debit cards are connected to checking accounts; however, you pay using your debit card rather than a paper check when making a purchase. By doing this, you are electronically transferring money from your bank account to the account of the retailer from which you bought the item.
Crucially, cash withdrawals from your linked checking account are also possible with debit cards. They are an essential travel accessory for anyone going overseas because of this feature. However, you really shouldn’t use your debit card to make purchases overseas outside of that. You will be responsible for any lost funds in your checking account if your card is hacked until the bank has had a chance to look into the matter and issue a reimbursement, which may take several weeks.
In the case that your credit card is compromised, you won’t be held responsible. Simply ensure that your card does not charge foreign transaction fees.
Charles Schwab Investor Checking
The Charles Schwab debit card continues to be the greatest option for foreign travel, as we have said for years. It’s hard to top the Schwab debit card’s absence of fees, account minimums, and general user experience, while there are competitors that might be more suitable for some passengers.
With the Schwab debit card, you can withdraw cash from any ATM worldwide and receive a 100% refund of any ATM fees you pay. It’s a tried-and-true method of obtaining the greatest conversion rate on foreign cash and avoiding foreign ATM fees.
You must open a Charles Schwab Investor checking account and a brokerage account that is connected to receive the debit card. Brokerage accounts are normally used for financial investments. Don’t worry, there is no minimum deposit required and no fees associated with this brokerage account, which is started immediately when you open a Schwab checking account. It’s not even required that you use it.
What you should know about the Schwab debit card is as follows:
- Unlimited charge refunds from any ATM in the globe
- No monthly fees and no minimum balance
- Debit card purchases and ATM withdrawals are free of international transaction fees.
- Visa debit cards and standard checks are free.
- With the Charles Schwab mobile app, you may use your phone to deposit checks.
For our overseas trips, nearly every member of the Thrifty Traveler crew swears by the Charles Schwab debit card. We haven’t experienced any problems in years. Many of us just deposit some cash in advance of every overseas trip so that it may be withdrawn while we are away from home using our Schwab bank accounts as dedicated travel accounts.
Checking for improvement
Betterment, a relatively young player in the financial services sector, provides services for digital investing, retirement planning, and managing cash, including a checking account that is mobile-first and comes with a Visa debit card.
Betterment is a great option for travelers as, like the Charles Schwab Investor checking account, it doesn’t charge fees for foreign currency translation and reimburses an unlimited amount of ATM fees. It’s also an excellent choice for a specialized travel account because there’s no minimum balance requirement. To be ready to withdraw when you arrive at your destination, just deposit monies before your journey!
What you should know about the Betterment debit card is as follows:
- Unlimited charge refunds from any ATM in the globe
- No monthly fees and no minimum balance
- Debit card purchases and ATM withdrawals are free of international transaction fees.
- Absence of overdraft charges
However, you are not required to have a linked brokerage account with Betterment, in contrast to the Charles Schwab checking account. Betterment checking accounts might be a better choice for people who invest elsewhere or don’t intend to use their Schwab brokerage account.
The sole significant drawback of Betterment is its youth in comparison to its rivals, making it difficult to predict if it will be able to maintain these features and advantages for many years to come. To be clear, this is not an affiliate link; learn more about the Betterment checking account.
Fidelity Cash Management
Another well-known financial company is Fidelity, which offers a range of financial services products, including life insurance and cryptocurrency trading. A cash management account with a Visa debit card that goes with it is one of their offerings.
In contrast to Schwab Investor and Betterment checking accounts, the Fidelity Cash Management account is exclusively a brokerage account. You will therefore need to open a brokerage account to obtain a Fidelity Visa debit card, even though you won’t receive two separate accounts as you would with Schwab.
Traveling abroad? Fidelity is an excellent alternative because it reimburses you for all ATM fees, no matter where you are in the world. Furthermore, Fidelity will pay you back the same day the ATM fee is deducted, however, Charles Schwab will repay you after your statement period. It is worthwhile to consider opening a Fidelity Cash Management account if receiving your money back as quickly as possible is your top goal.
What you should know about the Fidelity debit card is as follows:
- Unlimited charge refunds from any ATM in the globe
- Account fees and minimum balance requirements are absent.
- Competitive APR (Annual Percentage Yield) for cash amounts
- Debit card transactions and certain cash withdrawals are subject to a 1% foreign exchange fee.
- Comparable to Betterment or Charles Schwab accounts, Fidelity offers something in the middle. Compared to the others, Fidelity is at a disadvantage because it does not waive the cash conversion fees for ATM withdrawals or purchases. However, for many travelers, this can be a terrific alternative if they already have investment accounts with Fidelity or just want to use a financial firm with decades of experience.