It’s no secret that withdrawing money from an ATM in a foreign country will be a better value than converting dollars at the local Travelex. But what happens if you’re withdrawing money and the ATM asks you if you’d like to use the ATM conversion rate or your bank’s conversion rate?

Tread cautiously…the ATM is not your friend

ATMs often display a really nice message like … “For your convenience, this ATM can convert to your home country’s currency.”

Thanks, but no thanks.

Here’s an example of what you might see on the ATM screen…

In this case, the ATM is charging a 4% markup on the daily exchange rate to convert the money for you which is essentially the bank’s profit for spitting out your hard-earned cash.

If you select Debit in USD, this means that the conversion will be done for you and all you’ll see on your bank statement is a USD withdraw from an ATM. It also means you just took a bath on the conversion.

Selecting Debit in EUR is the correct option, as your home bank will perform the conversion for you and the result will likely be much more favorable.

What about foreign withdrawal fees?

Good question. Some banks charge a typical 1-3% on withdrawals overseas. This is why I recommend these banks, which offer no transaction fee withdrawals internationally:

Charles Schwab is your best bet here as they reimburse an unlimited amount of foreign ATM fees, allowing you to keep your money where it belongs, in your pocket.

Foreign ATMs and credit cards

To the extent you can take it, hold out from withdrawing cash at touristy ATM spots like the airport, hotel, or tourist center. These ATMs will give you a worse rate than an ATM in a quieter part of town.

If you’re going to use a credit card for your purchases, which I recommend, you can take a look at the issuer’s up-to-date exchange rates to get an idea of what you can expect:

  • Mastercard
  • Visa
  • American Express – does not publish exchange rates, but they are comparable to Mastercard and Visa.

Final word

Hopefully these tips will help you to maximize your dollars in a foreign country. To summarize the above points:

  1. Withdraw foreign currency locally in-country
  2. Withdraw foreign currency from ATMs in non-tourist spots for the best rates (e.g. Airports, train stations, historical centers)
  3. Select the option to have your bank account debited in the local country’s currency (i.e. if you’re visiting Italy, debit your bank in Euros)
  4. Use a checking account from a bank with no foreign withdrawal fees (e.g. Charles Schwab, Capital One)

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CarolynTerryDom Recent comment authors
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Your advice above on withdrawing foreign currency from an airport ATM seems ambiguous… “Foreign ATMs and credit cards” section says don’t do it at an airport. The “Final Word” section says, “Withdraw foreign currency from ATMs in non-tourist spots for the best rates (e.g. Airports…”.

I think I’ve read elsewhere that the recommendation is you *should* withdraw foreign currency at the airport as soon as you arrive.

Would you please clarify?


when making a credit card purchase in Europe you will frequently see the option on the slip as dollars or Euros always choose euros that way your credit card company will charge you a much more favorable conversion rate. If you choose dollars, frequently, the merchant will be charging you a conversion rate