This topic is found on travel forums repeatedly and always generates responses that vary from correct to somewhat correct to totally incorrect. As the person asking the initial question, it can be frustrating trying to find any consensus in the responses.
The reason for the variance is simply because most people don't know what they are talking about. They THINK they know something but in fact they have got it wrong. Take 'my bank refunds foreign ATM fees' for example.
What does that really mean. Well, it means if a bank in X charges you $3.00 to make a withdrawal from their ATM, your bank will refund you the $3.00. That's fine but it has NOTHING to do with whether your bank adds a percentage onto the exchange rate or not. Yet they will advertise, 'No Foreign ATM Fees' and people will THINK it means they aren't adding any exchange loading. Legally, they are in the clear. Sengsational has got it absolutely right, you shouldn't believe everything you THINK your bank said to you.
There is also the issue of terminology which differs from country to country. So when I say 'foreign transaction fee', I am referring to a say $3 fee your bank charges everytime you make a withdrawal with your debit card from an ATM. But someone else uses the exact same term to refer to what percentage they load onto the Interbank Exchange Rate. Two totally different things that can make a big difference in just how much that 100 Euro withdrawal actually cost you. You don't know until you get home and see your statement.
There is only ONE way to know what it will cost you to use your Debit Card (ATM withdrawals) or Credit Card (purchases/payments) when travelling. That is to either search the fine print which can be quite difficult (some banks do a real good job of hiding the information) or talk to your bank and ask. If you talk to your bank though you have to talk to the right person and it is rarely your bank teller and sometimes not even your local bank branch manager. They simply DON'T KNOW any better than you do and will often say, 'no foreign transaction fees' when in fact it only refers to that $3 per transaction fee and NOT to what exchange rate they use.
So you need to get to someone who actually knows about what is added when you use your cards overseas. Here is the question to ask. What exchange rate is used relative to the Interbank Rate when I use my card? If they do not know what the Interbank Rate is or what rate is used relative to it, they are the wrong person to talk to.
If they say, 'no we don't add on to the Interbank Rate, that is what we mean by 'no foreign transaction fees', ask them to direct you to where you can see that in writing. They may be right, they may not.
You would think that all banks could agree on using the same terms to mean the same thing but they do not. 'Transaction' is an ambiguous word since it can refer to several different things. Putting your debit card in an ATM and withdrawing some cash is a 'transaction' that they could have a fee for. Exchanging money for you when paying a bill submitted from another country is also a 'transaction' that the bank participates in for you and they could have a fee for that (usually a percentage of the total amount). So 'no transaction fee' doesn't tell you enough unless they DEFINE what it actually means.
This UK site is great at showing travellers from the UK exactly what their card will charge them. If you scroll down the page you will see they use the terms 'transaction fee' to refer to exchange loading cost and 'ATM or Withdrawal fee' to refer to the cost for using an ATM machine.
Debit & credit card charges abroad: full breakdown - MSE
First, it's important to see they separate the two so you can see clearly what will be added or not. Second, if you spend a minute or two looking at their list, you can see clearly how big a difference it can make depending on which card you use.
Unfortunately, I do not know of a similar list for a country other than the UK but there is no doubt, the same kind of thing applies to banks everywhere. So looking at examples from this list we do have access you, you can see things like:
Take 100 from an ATM using a credit card and it could cost you as much as 108 using an Amazon credit card.
Take 100 from an ATM using a debit card and it could cost you as much as 106.50 using a Clydesdale debit card.
Or it could cost you 100 using a Metrobank Europe debit card, a Norwich & Peterborough Gold debit card or a Santander Zero debit card. But even more amazingly, there are 3 CREDIT cards available that will not charge a cash withdrawal charge if used at an ATM and will not add any exchange loading as well. Those are Creation Everyday, Halifax Clarity, MBNA Everyday Plus and there are 2 more which do the same but are no longer available to new customers. Those are Santander Zero and Sainsbury's Gold.
It sure would be nice there was the equivalent lists available for other countries but I haven't found any so far. The Moneysavingexpert site by the way is also kept very up to date, so for any UK readers here, that should be your 'go to' site for up to date info.
and wow, they are considerably cheaper than when we were there four years ago (not that exchange rate is a factor in bringing them home or not). Back then, $1.40ish; today, $1.09.
