For those of you planning to travel internationally in the near future, I’d like to share a little more detail on the Charles Schwab VISA debit/ATM card in my wallet. I will tell you why it is the best ATM card to have and how you can start taking advantage of it in a few easy steps.
Typical Cash Withdrawal Abroad
I briefly mentioned how this card saved us money when we needed cash in Italy and South America. Many places abroad, including well-known sites, accept only cash. Most international travelers typically access cash in the following 3 ways.
- Buy foreign currency (FX) from your bank or an agency like American Express (Amex) Travel, prior to a trip abroad.
- Utilize airport FX exchange services.
- Use your US bank-issued ATM cards abroad.
Here is how you’d normally be charged for the above 3 methods.
- Even when your bank or Amex Travel tells you that there is no fee to buy FX, a 3-5% surcharge is embedded in the exchange rate used (you can get a sense of what the market exchange rate is by entering “1 Euro = ? USD” in Google).
- Similarly, the service charge and unfavorable exchange rates used by those airport services are outrageous (could be higher than 10%).
- US banks typically charge a flat fee ($3-5) + an embedded 3% FX fee for your cash withdrawal abroad. If you are a premier banking customer or if you use the bank’s international branches’ ATMs, the flat fee is usually waived but the 3% hidden fee is still charged. Additionally, most ATMs abroad will also charge you a flat access fee.
Cash Withdrawal with the Charles Schwab ATM/VISA Debit Card
Now, the Charles Schwab ATM card not only charges NO explicit or hidden FX fees for cash withdrawal anywhere in the world, it also REIMBURSES the fees charged by the ATMs/ATM owners, with no limit.
Let me share a few of my actual cash transactions.
(1) Lake Como (Varenna), February 21, 2011 – Withdrawal of 30 euros with no fee charged by the ATM – @the market rate of 1.36566.
(2) All three cash withdrawal activities in Peru and Chile incurred flat fees charged by the foreign ATMs. The fees charged represented 7.4%, 3.4%, 9.1% of the total US$ amount shown below.
On May 31, 2012, the fees of $15.82 were credited back to my Charles Schwab checking account, as shown below.
(3) Just to show you a domestic example, I withdrew some cash from a local Chase ATM, and was charged a $3 fee by Chase. The fee again was credited back to my account at the end of the month.
Anything Else Like It?
I looked into similar products offered by a few of Charles Schwab’s competitors, and couldn’t find anything identical.
E*Trade and TD Ameritrade only offer ATM fee reimbursement for US domestic cash withdrawal.
Our beloved American Express Prepaid Card waives its $2 ATM fee once per month, but does NOT waive or reimburse any fees charged by foreign ATMs. I am also not convinced that the FX rate it uses to process foreign transactions does not include an embedded charge, but will be happy to test it out by comparing it to another fee-free credit card the next time I travel abroad.
The Fidelity VISA Gold Check Card charges a 1% FX fee, and limits ATM fee reimbursement to $75 per year, as shown in the official terms & conditions below.
You Don’t Have to Change Your Primary Bank to Take Advantage of This
Even if you don’t have a Charles Schwab branch near you, you can still get your own Charles Schwab ATM Card by following the easy steps below.
- Open a single or joint account online at schwab.com (a linked fee-free brokerage account will be opened concurrently but does not require any funding).
- Return the signature page.
- Receive your free checks, free VISA ATM/Debit card.
- Fund the checking account only when you want/need to by using the Schwab app on your smartphone, sending in/dropping off a check, or linking your Schwab checking account with your primary account for easy free online transfers.
- Withdraw cash anywhere anytime you want to.
Now, you will never have to take any foreign currency with you before your international trips! (Remember to still put all your spending abroad on a credit card with no foreign transaction fees, whenever possible!)
Let me know what you think! I respond to all comments.