Recently, we took a trip overseas to Germany for vacation. I was worried that we would get shafted on foreign transaction fees, currency exchange fees and ATM fees because we didn’t have the right mix of banks and credit cards.
However, after a few phone calls, I found out that we were in an excellent position for this trip because of the following:
Our “Big Bank”
I’ve been a Bank of America member for about a decade now, and while I was very close to killing my account recently from their attempt at a $5 fee for debit card transactions, I decided it wasn’t worth the bother. I’m glad I didn’t because one of the major banks in Germany, Deutsche Bank, is part of the “Global ATM Alliance“, and thus we didn’t have any ATM fees.
One thing when you’re dealing with foreign currency is to make sure you don’t withdraw too much because you might get stuck having to exchange it back to US dollars and paying another fee.
Your best bet is to use a credit card…
Our Credit Union
While we have a number of credit cards, they all had foreign transaction fees (FTF’s), which can range from 1%-3% (or more for some seedy credit companies). But while calling through our credit card companies to find out the best option, I found out that recently our Pentagon Federal Platinum Rewards Card dropped the foreign transaction fee! Not only that, but I learned that the card also offers 5% cash back on gas all the time. When I first got the card, it was 3%, but I hadn’t checked up on it until I heard a radio ad for the card and heard 5%.
So with a combination of a big bank and a credit union, we were able to avoid a chunk of fees during our stay overseas. Capital One and AmEx used to be your only choices for cards with no foreign transaction fees, but now Pentagon Federal Credit Union has joined the mix 🙂