International debit cards

• Get two debit cards from two financial institutions — If your main one is lost, stolen or eaten by an ATM, or if your account in one financial institutions is frozen, you’ll have a backup.
• Check PLUS, Cirrus/Maestro networks in your destination countries —  You’re usually okay, but in some countries one network or the other is barely present.
• Set up low-cost use before leaving home — Ensure that you’ve got the lowest cost-per-withdrawal arrangement with your card issuers.
• Limit the balance of the account linked to each debit card — If you have a limited balance in the account you draw on at ATMs, you lower the amount at risk if your card is stolen or compromised. Top up the balance as required from a non-linked account.

Debit cards are the best way to keep yourself in local cash during your travels. As ATMs proliferate, even in smaller towns of poor countries, the convenience is unbeatable. When you add a great retail foreign exchange rate and good security, they’re your best choice for local cash.

The differences lie how acceptable the card is in foreign ATMs and what charges apply.

You are advised to get two cards, one for each of the VISA and Mastercard supported networks. That way, you won’t get stuck if you encounter a machine that doesn’t accept one of them. You also have a back-up if one card gets eaten by an ATM or your account gets frozen due to irregularities. 

Already got your debit cards? Using your international debit card safely and cost efficiently will be addressed in a separate article.

How to choose an international debit card

See below for discussion of these Quality Factors.

Usefulness abroad

• ATM availability — Will the card be accepted by enough ATMs in your destination countries?
• Card format — Does the card have a chip and 4-digit PIN?
• Daily withdrawal limit — Does your card have an adequate daily withdrawal limit, or can it be raised to an adequate amount? While it’s unlikely that you could face cash expenditures in excess of the ATM transaction limit, you might need to make several withdrawals for a major cash purchase.

Cost of use

• Card issuer transaction fee — Does the card issuer charge you a “network” fee to make a withdrawal on a foreign ATM?
• ATM operator transaction fee — The very best cards refund fees charged by foreign banks to use their ATMs. If not, does your card issuer have any “no-ATM-fee” affiliated banks in your destination countries?
• Card issuer service packages — If one or both of these two fees is not waived as part of the card’s basic offering, does your debit card issuer have an affordable monthly service package that includes coverage of their own ATM network fees at least? (Since you hold at least one or two accounts with your card issuer, the package will have other banking services as well, some of which could be helpful.)

International debit cards are fairly secure when used properly. You can reduce risk further by keeping the balance of the linked account low. Should your card be stolen or compromised by thieves, the amount at risk will be limited to your low balance. You can go online to top up the linked account from an unlinked savings account.

Types of debit card

Debit cards are plastic cards, almost all of them chip and PIN enabled. They enable you to draw local currency from an ATM, debiting the linked account at your home bank or credit union. They are also called ATM (Automatic Teller Machine) cards, ABM (Automatic Banking Machine) cards, cashpoint cards, bank cards or check cards.

Attention American travelers. The US has been slower than almost all other countries to adopt cards with chips and PINs, although they are increasingly available. You simply must get chip-and-PIN cards. If you don’t, you will not be able to use most foreign ATMs.

There are several types of debit card:

• Combination debit and credit cards — You can use these as debit or credit cards. ATMs are usually programmed to recognize them and offer you the option of withdrawing cash from either your debit or credit account. Do not use a hybrid card to get cash advances on your credit card account, since interest will be charged immediately.
• Multi-purpose bank cards — These are issued by banks for their customers to do multiple banking functions at ATMs, such as balance enquiries and transfers between accounts. They therefore present more risk if lost or compromised because a thief may be able to access accounts not linked to the debit function.
• Single-purpose debit cards — These have one purpose only, withdrawing cash from ATMs. For that reason they’re safer than other types of card. Note that bank-issued cards without VISA or Mastercard affiliation will not be accepted by most foreign ATMs.
• Pre-paid “travel money” cards — These are not true debit cards. Rather, you deposit credit on the card, then use it as you would a debit card. Most allow online top up, with the balance recorded on the card’s chip. The primary advantage is to limit losses in the event of theft, although keeping a low balance in the account attached to on a single purpose debit card can also limit risk. The advantages of pre-paid cards are more than offset by the fees that make them more expensive than a debit card. 

Debit card usefulness abroad

ATM availability

Your debit cards should be linked to one of the major international networks: Cirrus or Maestro (both Mastercard) or PLUS (VISA). If you’re traveling in rich countries, ATMs serving both major networks are available everywhere — many ATMs take cards from both networks. That is not true in many middle and poor countries, where ATMs from one of the networks may be entirely lacking or very sparsely distributed. You could find yourself standing in front of the only ATM in some town, only to discover that it serves the other network and won’t accept your card.

• Check ATM network availability in destination countries — When you know what countries you will visit, check ATM availability.
  • Mastercard (Cirrus and Maestro) ATM finder
  • VISA (PLUS) ATM finder
  • The map should give you a quick idea of how many and how spread network ATMs are in the country. If you’re going to a more remote place, away from the cities, check for accessible ATMs or plan on stocking up on cash before heading out to where there are no ATMs. Don’t count on a single ATM in some far flung location working when you need it to.
• If ATM distribution for your network is okay — All you have to do is get a second card for your home account. This will handle any eventuality, unless your bank freezes the entire account for some reason. It’s easier to manage periodic replenishments to the account from your savings at the same bank. It’s also cheaper, if you have a services package from hust one bank.
• If ATM distribution is poor or non-existent — Get one international debit card from the VISA system and another from the Mastercard system. One card will be your main one, with the other used only when the main one cannot be used. The main one could be rejected by an ATM, taken by an ATM and not returned, damaged, lost, stolen or password compromised. You’ll have a smaller balance in the second account, although replenishing it online from your other bank isn’t much hassle. You may have a service package for your main ATM account, paying per-use fees for the rare times you use the second card.
• Traveling couples — If you’re traveling as a couple, you could have one ATM card each.

Debit card features

• Chip and 4-digit PIN — Most countries require your international debit card to have a chip and 4-digit PIN. At time of writing, many US banks were still in the process of transition to chips. Others have PINs with more than 4 digits or PINs that use letters instead of numbers. If your card does not have a 4-digit PIN, see if you can change it. If you can’t, get a card from another issuer.
• Single linked account — Most ATM cards will link to only one account, normally your current (checking/chequing) account. This is a good thing, since full-featured “bank cards” that access multiple accounts increase the vulnerability of your money if your card is compromised. You don’t need the extra banking functions of a bank card, since you can do those functions via your online account access.
  

  

• Maximum daily withdrawal limit — Unless you’re a high-style traveler going to middle or poor countries (where your daily cash requirement might be considerable), you probably don’t need to increase your daily withdrawal limit. But do check! If it’s less than the cash you’ll need for several days, get the maximum raised before you go. Keep in mind that you might be heading outside major towns to where there are no ATMs for a week or two. In a poor country, you might also have to pay for a costly service (trekking guides, scuba expedition, hot air balloon, safari…) entirely in cash. Take a look at your budget and decide whether a higher daily limit (within reason) is worth the small risk that your card might be used by thieves to draw on your account.
• Can you replace a card on the road? — Before you leave home, you should know whether or not your card issuer will courier you a replacement card. Some won’t send a card abroad. In that case, you could have the replacement sent to a Trusted Agent who would then courier the card on to you. Your last option could be to make ATM withdrawals with a credit card, although it’s more expensive. 

Costs of debit card use

You will use ATMs many times, so it makes sense to minimize the costs. That starts with getting the correct international debit card. There are three potential charges you face when using a debit card:

• Foreign exchange conversion spread — If you sell one currency to buy another, there’s a difference (the “spread”) between the interbank rate and the retail rate you can get.
• Card issuer’s network fee — Your home bank or credit union could charge a flat fee of $1 – $5 (or your home currency equivalent) on every ATM transaction, making for a poor net exchange rate. If you have the right card or service plan, this amount can range from zero to not much per transaction.
• ATM operator fee — The foreign owner of the ATM will charge as much as $5 for each transaction. With some local knowledge you may find out that one bank charges less than another. Better yet, your debit card issuer may refund this charge. 

There are only a few international debit cards that optimize transaction costs. If you have one in your country, consider opening an account at the financial institution that offers the card — you’ll save hundreds of dollars (or equivalent in your home currency) during a longer trip.

Foreign exchange conversion spread

The attractive exchange rate that debit cards get, usually the Interbank rate +0.5-2%, is one of the main reasons to use them. You can’t get a better rate with any other foreign exchange conversion method. (Credit cards generally a bit more.)

Your card issuer’s fee

Most debit card issuers will charge $2 – $5 “network fee” for every ATM withdrawal abroad. Does yours? If so, see if your financial institution has a better card. If not, consider moving to another bank or credit union.

• No charge on ATM transactions — A few financial institutions offer a debit card that does not charge a network fee, no matter where the card is used. If you are planning a longer trip, you might consider opening a new account, just for this benefit.
• Service package with no network fee — Many financial institutions offer a monthly fee service package that includes no network fee on withdrawals from ATMs anywhere. The average cost per withdrawal will be significantly less than with a card that charges for every withdrawal. If your financial institution offers such a package, check whether no network fees and the other services would be worth the monthly fee. Packages may or may not include a premium credit card. Check whether the credit card is appropriate for travel and ask for it to be included in the package. You can also try to negotiate the fee. If your financial institution doesn’t have an attractive service package at a reasonable cost, consider switching to a bank or credit union that does.

Should you get a bank service package with “free” ATM use?

• What destination countries? — In rich countries, you may be able to use your credit cards for many purchases, but as you move into middle and poor countries, credit cards are accepted at fewer and fewer businesses. You’ll be using local cash for most purchases. That means you’ll be relying on your debit card for most of your expenses.
• What travel budget? — The higher your style, the more you’ll spend. Use of cash in poorer countries may be offset by your staying in lodges that accept credit cards, but you’ll still be using cash for restaurants, local transport, activities and much else. If you’ve already created a budget, you can estimate the amount of local cash you might need.
• What’s the ATM withdrawal limit? — All ATMs have maximum withdrawal limits and these vary not just between countries, but between banks. The banks in some countries have relatively low withdrawal limits, which means you’ll have to make more withdrawals. Search: “[country name] ATM maximum withdrawal”. Results will be from a wide array of sources, but be sure your information is recent.
• Estimate number of withdrawals per month — Divide your budget cash estimate for the month by the maximum withdrawal limit.
• Bank service package — What will your bank charge for an ATM withdrawal at a non-affiliated (foreign) ATM? What is the lowest cost monthly service package that includes non-affiliated ATM withdrawals at no extra cost? (The service package may contain other services that you need.)
• Example — You determine that your daily cash requirement is $25. The monthly total is then 30 X $25 = $750. Perhaps the maximum withdrawal is local currency equivalent to $100. That means you’ll have to make at least 8 ATM withdrawals during the month. If your bank charges $5 per ATM withdrawal, the total fee will be $40. However, if they have a service package costing $25 that includes any ATM withdrawals, then you’ll save $15 per month by subscribing to the package.

Local ATM operator’s fee

The local operator that owns the ATM (the “bank”) will also charge a fee. There’s no standard fee — some are percentages and some are flat fees. It may be stated up-front on the ATM screen, but banks in your destination country may be permitted to hide the fee. You won’t know what it is until you see your bank statement from home and can calculate the net exchange rate, including the fee. Here’s a hypothetical example:

• Basic exchange rate — You want to withdraw the maximum-per-transition of 1000 pesos. The Interbank rate is 10 pesos per dollar, so 1000 pesos = $100.
• ATM exchange rate — The rate you actually get with an ATM withdrawal might have a 2% spread above the Interbank rate, so your 1000 pesos now costs $102.
• Local bank fee — A flat $5 fee would bring the total to $107.

Who wants to be the victim of arbitrary fees you don’t see until it’s too late? Do your homework.

• Get a debit card that refunds foreign ATM fees — There are precious few of these, but markets are changing all the time.
• Find out what other travelers are saying — Search “atm fees [country]” to see what’s discussed on the internet. It’s too much to search for the list of banks and dig to find out their ATM fees.

Flat fees per transaction are one reason to seek ATMs with higher maximum withdrawals. Quite often, international banks (usually found in the business district of major cities) have higher limits than domestic banks.

Global ATM Alliance

Ask your debit card issuer what (if any) reciprocal agreements it has with foreign banks and whether that includes no-fee ATMs for each other’s account holders. Such agreements are rarely advertised or stated on bank websites.

• Bank of America (USA)
• Scotiabank (Canada)
• BNP Paribas (France)
• Gruppo BNP Paribas (Italy)
• Barclays (UK)
• Deutsche Bank (Germany)
• Westpac (Australia)

They allow cardholders of member banks to withdraw from ATMs without local bank fees. Most of these banks have branches outside their home countries, but the list of countries where they maintain ATMs is not extensive. Deutsche Bank, for example, has 16 branches in all of India. (The photo shows Barclays ATMs in Rome.)

Where the Global ATM Alliance is really useful is for travelers going from one Alliance country to another. So, American travelers in the UK, France, Germany and Italy or Australians in North America can save plenty using Alliance ATMs.

Caution: Global ATM Alliance members may charge heavily for non-Alliance ATMs. Make sure to investigate the cost if you cannot use Alliance ATMs.

Notify your card issuer about your travel

This is essential. If you don’t do it, you might arrive in a far country, stick your debit card in the airport ATM and find it refused by the card issuer’s fraud detection software.

Contact your card issuer by e-mail (don’t rely on a telephone conversation). Lay out your approximate itinerary, including countries and dates. Approximate is good enough — once they know you’re traveling, they won’t be bothered if you add a country or extend your trip.