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How to use an ATM abroad and NOT pay any fees

Updated: Feb 24, 2022

Guest post written by Olivia from La Casa De Las Lenguas Magazine.

Unfortunately, using ATMs abroad can come with a few more complexities than it does when it comes to using them in your home country. However, there are a few things that you need to know to avoid being caught out and ending up paying much more than what you intend to.

First of all, it is important to understand how ATMs work when you are using a credit or debit card abroad. There is a lot of financial jargon (which I will dissect), but first of all, let's break down the maths that takes place when you withdraw from an ATM using a foreign credit card!

The equation normally looks like this:

Amount of money being withdrawn + withdrawal fees (charged by ATM) + dynamic currency conversion (charged by ATM) + foreign transaction fee (charged by bank)

In reality, it can work like this:

€200 (being withdrawn) + between €1.95-€4.99 (withdrawal fee)* + €26 (dynamic currency conversion - can be up to 13% of the total money that you are withdrawing)* + €5.50 (foreign transaction fee charged by bank)**

*These numbers are taken from the fees charged by Euronet ATMs which are commonly found in tourist attractions all over Europe.

**Using the Non-Sterling transaction fee charged by most UK banks (2.75%). If using a card belonging to a non-UK bank, change to your relevant foreign transaction fee).

This is the equation that would be used when withdrawing from an ATM abroad using a card that is foreign to the country you are visiting. There are a few things you can do to eliminate some of these fees, but first, let's have a look at how much it would cost in total to take out €200:

€200 + €1.95/€4.99 + €26 + €5.50 = €233.45/€236.49


you would be paying €33.45/€36.49 to simply withdraw €200!

The avoidable parts of this equation are a) the dynamic currency conversion, and b) the foreign transaction fee charged by your bank.

  1. Dynamic Currency Conversion (DCC)

What is Dynamic Currency Conversion?

DCC gives you the option of either paying in the local currency (which in the case of the example is Euros) or paying in your home currency. If you were to select to pay in your home currency, then the ATM that you are using will use its own conversion rate rather than that of the bank that your card belongs to. To put it simply, DCC is just another type of currency conversion fee that you may pay the ATM.

NOTE: You may also see this being called CPC (Cardholder Preferred Currency - which may make a lot more sense!)

Why DCC is NOT a good idea

When you select to pay in your home currency, DCC becomes part of the equation. While paying in your home currency may feel more comfortable (often as you are more aware of how much you are spending), the exchange rates that these ATMs carry out are normally extremely poor and, not only will you end up paying more fees, but you will also get a lot less for your money.

This is for two reasons:

  • The exchange rate has a markup to the merchant/service provider

  • All of the other fees you may have to pay on top of DCC


  • DCC rates are often much higher than the fees that your home bank charges you

  • On top of DCC, you could also have other fees to pay (this depends on the type of card you have)

  • You can choose to decline DCC and allow your bank to do the currency conversion itself

How do you decline DCC?

ATMs often make allowing them to do the conversion themselves seem the most attractive option. You could even say that they make it look as though choosing to pay in the local currency is a bad idea. In the video below, you will see that the 'Without Conversion option' is made to seem like a bad idea by putting the writing in red and emphasising that the exchange rate isn't fixed. But DON'T PANIC - this is simply another money-making ploy! All it means is that the exchange rate changes whereas that of the ATM doesn't. This does not mean that accepting the ATMs conversion rate is a good idea or that it is any better than your bank’s - the opposite!

Using the example from the video, the ATM gives the option of 'Withdrawal without conversion' and 'Withdrawal with conversion'. Without knowing what either of these mean, many people simply go for the latter. This is how lots of ATMs make their money!

In this case, to avoid paying DCC fees, simply click 'accept' on the 'Withdrawal without conversion' side. On other ATMs, you may simply be given the option to 'accept' or 'decline', with 'accepting' referring to excepting the exchange rate of the ATM (which would mean that DCC rates are included) and 'declining' would be allowing your bank to do the conversion - always the best option!

Click here to watch the video:

2. The foreign transaction fee charged by your bank

This fee, which you may also see as being referred to as an FX fee, is a surcharge that takes place whenever you purchase something in a foreign currency or make a purchase that is processed by a foreign bank. Therefore, this fee isn't only applicable when using ATMs, but when you use your card whenever foreign currencies are involved. This fee often ranges from 1%-3%. For UK banks, this rate is normally 2.75% of the total amount spent.

There are some cards, however, that don't have any foreign transaction fees at all.

HOWEVER... even though your card may not have any transaction fees, most banks do add on this fee when you are withdrawing from an ATM abroad.

To avoid this and to further cut down on your spending, there are some travel cards that remove all foreign transaction fees.

HOWEVER... Although these banks may not charge any fees, they cannot stop the ATM itself from charging you a withdrawal fee. Luckily, many countries in Europe don't charge ATM fees and this is becoming a much more common occurrence.

To summarise, when withdrawing money from an ATM abroad you should:

  • ALWAYS decline the ATMs conversion rate and pay in the local currency.

  • Be aware that ATMs abroad will know that you have inserted a foreign card and so when you select to withdraw money they are very likely to only offer you high amounts in the foreign currency. They do this as they know you are unlikely to know what this converts to in your home currency. Remember to look up what you would like to withdraw in the foreign currency and to select the option that allows you to enter this exact amount rather than opting for the choices the ATM gives you.

  • If you have a card that charges fees when using an ATM, take larger amounts of money out at a time to avoid paying fees every time you need to withdraw.

  • Try to find an ATM that doesn’t charge withdrawal fees.

  • If you can, try to avoid ATMs at airports and instead use those in banks.

  • If you travel regularly or often buy products in a foreign currency, consider getting one of the cards without foreign transaction fees.

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