If you think banks have treated you badly in the United States, try traveling abroad. The fees imposed on foreign currency transactions — at ATMs and in credit card fees — are horrendous.
Joe Brancatelli dissects the problem neatly in his latest Portfolio column. And he mentions a tactic that I happen to have employed recently: I opened a Capital One money market account that does not charge the punishing currency exchange fees imposed on most bank accounts for foreign ATM withdrawals.
I discovered the Capital One money market account as my mother and daughter were preparing for an extended trip to Spain. My mother told me about the $5 per transaction fee that she paid her bank to use her ATM card in Canada — on top of the fees charged by the bank that owned the ATM. Determined to help avoid that in Spain, I did some research.
It turns out that Capital One, which offers credit cards with no foreign transaction fees, does the same with ATM cards. After some deliberation, I opened a Capital One money market account online, transferred money into it electronically and requested ATM cards. I had to allow a few weeks to get it set up. It took several days for the funds to clear into the account and another week to get the ATM cards.
(Of course, Capital One then filled the mailbox with a zillion fresh offers and junk mail. Whatever. I can live with that.)
The bottom line is that my daughter can withdraw her money without being taken advantage of. And I now have an account that I can transfer money into before a trip and tap into when I’m abroad.
The real bottom line is that I don’t have to feel like a chump every time I use an ATM card in another country.