If you’re lucky, and you’re able to put your entire trip on your credit card, you’ll rarely use your debit card. The only time we’ve used our debit card with any frequency is in Southern Italy, where few vendors took card. Cash was still king so we had to withdraw money to use. It won’t be the end of the world if this happens to you, but it is fairly annoying. Not only are you not earning rewards, it’s impossible to contest any charges (obviously).
Even with all the luck in the world, you might have to break out a debit card, so here are some things to keep in mind when finding one.
• ATM Fees: When you need to use a debit card, it’s important to find one with zero ATM fees, and if possible, one that reimburses you for any third-party ATM fees. ATM fees can be a huge chunk of money to spend on accessing your own money. Most foreign ATM fees are around $5, but they go up to about $12 (in part because of the conversion rate between euro and dollar, and in part because it’s just higher). That doesn’t include your banks own ATM/foreign transaction fees. For a simple transaction, you can be hit with a $10-$25 charge. Because of this, you’ll need to withdraw more money at once, the downside of this is becoming an easy target for pickpocketing. (Or simply raising your chances to misplace some of the money.) If you do need to hit up an ATM, try not to use the ‘easy’ ATMs, like the ones located inside hotels, grocery stores, or busy pedestrian corners. These tend to have the highest ATM withdrawal fees (and a greater chance that someone will have put a skimmer over the card reader, to gather card information).
• Currency Conversion: When withdrawing money to use for a purchase at a grocery store, or even online, some banks will charge you a currency conversion fee, or they will simply have bad currency conversion rates. If you can, check and see what your bank will charge to convert your money. More importantly, try to use a bank that won’t charge you.
• Foreign Transaction Fees: Not as common, but some small banks, or local banks, like credit unions, will attach a foreign transaction fee every time you use your debit card overseas. The second time I went to Europe, I brought my local bank’s debit card, and had to pay $6 on every debit card purchase, which made that trip hundreds of dollars more expensive than it should have been. (Everything from grocery store purchases, ticket purchases, and hotel rooms.)
We both decided to switch banks before leaving for our trip a year ago. We both switched to Charles Schwab, which offers a free checking account if you also sign up for their investment account. You don’t need to actually use the investment account, or even have any money in it.
When you go traveling, I would recommend giving your bank a solid look over.
• Are you paying a monthly fee? Or any other type of fee that is charged once a month unless you have a certain amount of money in your account? This is also known as: The Broke Person Fee. If you are paying a monthly fee, I’d recommend changing banks even if you aren’t traveling. There’s no reason a bank should be charging you. At all. They make their money investing your money. They don’t need the financially distressed’s $10 a month.
• Can you alert them that you’re traveling, thus keeping your cards from being deactivated while abroad?
• Is their debit card a Chip-and-Pin or Contactless?
• Do you dread going to the bank, or calling them up with any problems?
• Have they made the news in the past decade doing something morally and ethically horrible?
Nerdwallet has a pretty good rundown on different types of banks, and how well they work. At the end of the day, I’d just find a decent bank that you’re happy with, and that won’t charge you a ton of money to use.
Again, I am in no way an advocate for the company or the cards, and I receive no financial reimbursement for talking about them.