How to Avoid ATM Fees When Living Abroad


“Folks don’t carry money around in their pockets. They’ve got to go to an ATM machine, and they’ve got to pay a few dollars to get their own dollars out of the machine. Who ever thought you’d pay cash to get cash? That’s where we’ve gotten to.”~Bill Janklow

banpro-1Twelve years ago, we had to go to the mainland to take money out of an ATM. The first time we took our neighbor kids to Rivas, the ATM machine impressed them the most. They were amazed at the small cool room, and it really blew them away when money came out of a hole in the machine. When they told their Papa about the miracle they saw in Rivas, he asked us if he could get a card for the money machine, too.

Today, we have at least five ATMs to choose from in Moyogalpa. However, our MasterCard debit card from our bank in the states is only accepted by one bank and one private ATM at the Mega Super grocery store. Recently, our bank sent us new debit cards with the digital chips. Now, the only bank that accepts our chipped debit card is BAC.

Unfortunately, the BAC fee is $3 for a transaction, and our US bank fee for the transaction is $5. So, every time we go to the ATM, we withdraw our limit because no matter how much money we withdraw, the fees are always $8 for each transaction.

Over a period of a year, our transaction fees add up to $384, which is four transactions a month at $8 a transaction X 48 transactions. Outrageous!!! It is our money and we have to pay fees to access our own money. That is unacceptable to me!

So, here is what I do to avoid any transaction fees. We have a Capital One Money Market account. It is like a savings account. Not only is the interest we receive higher than what  our bank in the states pays, but we can make six withdrawals per month from ATMs without paying a penny in transaction fees.

Next, we needed to find an ATM in Nicaragua that doesn’t charge a transaction fee. Our Mega Super grocery store does not charge a transaction fee because it is a private ATM.

It is simple to transfer money to our Capital One account from our bank in the states. We make the transaction through Capital One and not our stateside bank because in order to make an external transfer from our bank, we have to physically go to the bank. It cannot be done online.

We transfer money monthly to our Capital One account and make 4 withdrawals a month through our Mega Super grocery store ATM. And the best news is that we are saving $384 a year because we pay NO TRANSACTION FEES!

I am very pleased with our Capital One accounts. We have a Capital One credit card and a money market account. The service is exceptional and I can contact them online 24 hours a day if I need help.

So with the money we saved in transaction fees, we booked the TranzAlpine Scenic Train Ride in New Zealand. 

How to Avoid ATM Fees

How do you save ATM fees if you live abroad? And what do you do with the money you save? 

 

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34 thoughts on “How to Avoid ATM Fees When Living Abroad

  1. Thanks for the great tip! Wondering how you figured out which ATM didn’t charge a fee? Did you ask the business managers, or was it just trial and error? Laura

    • Laura, it was simply trial and error. Since our US bank debit card is MasterCard, we didn’t have too many choices in Moyogalpa. BAC and Guillermo’s grocery store are the only places that take MasterCard. All the other ATMs in Moyo take Visa.

      When our bank card changed from VISA to MasterCard, we were forced to go to the mainland to use an ATM. That was before BAC was in Moyo. So, we brought our money back to Ometepe and opened an account with ProCredit because we didn’t have our residency at the time. Plus, it was the only bank in Moyo. What a hassle. It was when we were building our house and we needed a steady supply of cash.
      It wasn’t until the airport opened that suddenly we had 4 new banks in town. When our new debit card with the chip stopped working at Guillermo’s grocery store, we tried our Capital One money market card, and had no problems. Plus, we can use our CO Money Market card at all the banks.

  2. We still have our account in the US, PNC , no charge on using the debit card at ATMs. Pension and SS is direct deposited there. But if you use it as a CC at a store, there is an international fee, even though Ecuador money is the US dollar. Our ATM that we use at a credit union close to us (we also have accounts there for our auto bill pay for our insurance, there is a small charge for that service, so we still pay our electric and internet in person. Only a 15 minute bus ride away. ) does not have a fee. Don’t have to be a member of the CU to use the ATM. Other bank ATMs in Portoviejo and Bahia have fees from $1.50 -$3.00. We also have Capital one credit card, but have to update our location every 60 days if we want to use it in EC so we mainly use it when traveling in the US and car rentals. Those who have closed their US bank accounts have opened one here. Not sure on the particulars but at least they have a place for their money to be deposited. I’m not 100% comfortable with that, rather take my chances with a US bank. Lots of great info in the comments, thanks all.

    • Thanks, John and Mary for your detailed information from Ecuador. One thing I am curious about. I read that many banks in Ecuador are closing the accounts of US citizens because of the IRS reporting requirements. Are you aware of any banks in your area that have closed the accounts of US citizens?

  3. You can go to any BAC bank, go to the counter with your passport or cedula and withdraw up to $1,000 per day with your debit card and you are charged nothing. I have been doing this for years and I do not have an account at BAC. I am also fortunate for my bank in Florida, Sun Trust does not charge me either.

    • Thanks, Jerry. This is great to hear. And it is an easy alternative for expats living in Nicaragua. I wonder if the same applies to other countries? For example, if I am traveling through Ecuador, can I receive money without a transaction fee by showing my passport in a local bank?
      If so, it may be best to avoid all ATMs abroad and deal directly with a local bank to get money.

  4. Very interesting discussion about money and ATM fees. I think it’s pitiful to have to pay money to get your own money out of the bank. Even here in the US, some banks charge a fee if you’re using their ATM but don’t have an account in their bank. The fee varies from bank-to-bank but is usually not over $2 a transaction. Even at that it’s best to drive across town where there’s no transaction fee. Banks do have us all coming and going.

    • I know, Sunni…pitiful. I am a penny pincher always searching for the best deal. Seeing that much money wasted to access our own money really makes me angry. And when I get angry, I search for solutions. There are so many excellent options listed by expats from all over the world. I appreciate everyone’s comments so much.

  5. We use Schwab too.They have physical locations all over and you can also bank on line, pay bills, transfer money, etc. I have never had a problem with my Schwab debit card and they reimburse fees. I did business with them for years in the US and love their service.

  6. Uh, are you sure?

    I have had a Capital One account for about 12 years and a money market account for 10. ATM fees USED to be non existant for me until…and get this…until Capital One got slammed with a $140 million lawsuit for unlawful credit collection practices. About a week after that happened they started charging me $6 for each foreign ATM withdrawl. Imagine that…I was paying the fines levied against them!

    So I switched banks as soon as I could and now do my dealings with TDAmeritrade which is truly free.

    • Casey, yes I am sure. We Have a Capital One credit card and a Capital One Money Market account. The CO Money Market acct. card has no expiration date. That is what we use to withdraw money from the ATM. It is like a savings account. It is not a debit card. We’ve been transferring money into this account from our other bank for a while now, and withdrawing from the ATM. We have no transaction fees at all. I talked with a Capital One representative yesterday to make sure that there are no transaction fees for withdrawing from a foreign ATM from our Money Market account. None at all and you can make up to 6 withdrawals a month. You must have used the Capital One 360 debit card, correct?
      Thanks for another helpful tip for using TDAmeritrade. There are so many great options for expats. If things change and I notice a transaction fee, I will be sure to tell you. Like our bank in the states, sometimes they spring things on us without any notification.

      • I don’t have a US address, so some of these things are impossible to set up (the web page wants US addresses to check for qualifying). I do have a small Nicaraguan account which I could and probably should transfer a month’s amount of money to each month since my bank back in the US (set up the account before I moved here, but it also know where I am) refunds me $10 a month for ATM charges if I make more than one or two. Having a US address would complicate the local bank situation and some tax liabilities, so I don’t. Waiting for my first chipped card and will be pissed if I have to use it at BAC, which does charge the largest fees for transactions.

        A couple of years ago, I tried to open either a money market account or a mutual fund account and was turned down as a resident of Nicaragua. Heard that some investments are barred by the Treasury Department if you’re here but not if you’re in Costa Rica (info a broker gave my brother). I got an annuity with my university instead.

        • Thanks for the info, Rebecca. Our new chipped cards don’t work in the private ATM at the grocery store, and I don’t have a clue why not. They worked in BAC, but it is the only other ATM in Moyogalpa that takes a MasterCard debit card. If your new chipped card is VISA, you will probably have an easier time using it in Nicaragua.

  7. Fidelity offers a cash management account that refunds ALL foreign ATM and transaction fees through their debit card. So far so it has worked everywhere we went.

  8. Great tips for anyone from the U.S. I am from Germany, so I don’t think I could get a Capital One or Charles Schwab account. I am lucky though… my German bank (DKB) issues a VISA Card where cash withdrawals worldwide are free of charge, as long as you have money in your VISA card account.

    Debbie, if I may ask… did you never consider opening a bank account in Nicaragua?

    • Thanks Maggie! Yes, Maggie. We have considered opening a bank account in Nicaragua. In fact, we did open one about 6 years ago with ProCredit. At the time, it was the only bank on the island and the only ATM. Our bank in the states decided to change the debit card from Visa to MasterCard. And the only ATM on the island only accepted VISA. So we had no way to withdraw money. We went to the mainland, withdrew money from the ATM, and returned to ProCredit to open a bank account so we could use their ATM to withdraw money.
      But, now we have many ATMs on Ometepe. So, we closed our account with ProCredit. Two reasons why we won’t open a bank account in Nicaragua. First, they do not insure your money in case the bank closes or goes out of business. Second, as US citizens, the IRS requires all foreign banks to notify them if a US citizen has an account. Foreign banks are getting fed up with the interference from the IRS, so they are closing many accounts of US citizens. It hasn’t happened in Nicaragua,yet. But, I have many friends in Ecuador whose bank accounts were closed because of the US requirements.
      Oh, I just thought of another reason. With our bank account in the states, when our Social Security is deposited, no one really knows that we live abroad. If I opened a bank account in Nicaragua and had our SS checks deposited, every two years, we would have to fill out a proof of life form…yes that’s the name. We have to prove that we are alive and still kicking or they will immediately stop the check sent to a foreign bank. I have had this happen to two of my friends living in Nicaragua. It was a real hassle for them to get their SS checks restarted again.
      Oh another reason….there is no privacy statement with a Nicaraguan bank. A friend of mine sold his house, deposited the money in a Nicaraguan bank and the next day, everyone in town knew exactly how much he was paid for his house. Not good at all! He had people coming out of the jungle trying to sell him things or borrow money. I have witnessed bank tellers give foreclosure lists to their family members and their family members sell the houses privately. I don’t trust Nicaraguan banks at all!

      • Thanks Debbie for your detailed explanation. Especially the part about the “proof of life” form was interesting… or should I rather say outrageous?!

        I also opened a bank account with Pro Credit when I first moved here in 2010 (they did not require residency to open the account). I still have it and so far have had no problems with it, privacy or otherwise. I specifically checked if the money is insured, and it is, but only up to $10,000.

      • My Social Security is deposited in a bank in the US and I have had to fill out forms once in a while for SS, which does know where I live in Nicaragua (I have gotten street rather than PO delivery for SS mail). So my checks go to a US bank, which knows where I live here, as does SS and my credit card company. I followed the advice of an American retiree living in Mexico who said she kept her US bank account. Don’t know if she’d done the rest of the things I’ve done.

        Recent new stories suggest that trusting all US banks is foolish, too.

        • Haha! How could I forget the Wells Fargo fiasco, Rebecca? I should rephrase that to say, I don’t trust any banks anywhere. But, what can I do? Stuff money under my mattress? Bury it under the banana plant? They have us no matter what we try to do.

  9. Whoo Hoo! You’re going to New Zealand AND taking an epic train trip – both are winners in my book! We have a Capital One credit card which doesn’t charge foreign transaction fees and now, thanks to you, I’ll check our their debit card. Our go-to card has been Charles Schwab for our debit card and last year added the new Bank of America travel rewards card as our backup. The BOA card came in really handy when the chip on my husband’s Schwab got a scratch and wouldn’t work and, two weeks later, my card wouldn’t work as well. But hey, in Portugal, the mail does work, and we had new cards in a few weeks! Anita

    • That is awesome to hear, Anita. You are so lucky you mail system works in Portugal. We have to either get our debit cards at our house in the states when we go back to visit, or have someone bring them to us.
      I am so tired of our bank in the states, but we have our pensions, SS, and other things direct deposited into it and we’ve used our bank for many years. It seems like such a hassle to change banks. But, we may investigate Charles Schwab. Thanks for the info.

  10. A Charles Schwab checking account with an ATM/debit card is free, charges no fee for using any ATM in the world, AND reimburses you for fees charged by the bank that owns the ATM you’re using.

    • This is true. We use Schwab and always get reimbursed. We never worry about fees. Another great feature about Schwab is that they don’t care if you live overseas (some financial companies won’t do business if they know you live off shore from the US).

    • Wonderful information Mark and Rich. Our bank use to reimburse us for ATM transactions, but one day I noticed they stopped doing it. I called them, and they said, oh we don’t have that program anymore. I never received any notification and we opened a special account specifically for that reason. Sigh. Is Charles Schwab an online bank like Capital One? Or do they have physical locations?

  11. what about the exchange rates from the different ATMs ??? or do you get US dollars
    not much free in this world–here in Bangkok bank fee is over 7 $ and Canadian bank $5

    • Good question, Dave. We always get US dollars and exchange them at our local fish store where the exchange rate is the highest. In Granada, the bicycle store is the go to place to exchange money. I have to laugh at the places we find with the best exchange rate.
      Canadians are having a rough time with the change rate, now. Their cost of living is higher than ours because their money doesn’t stretch as far as ours.

  12. Sounds like a great way to save money. I got tired of paying the fees, the only bank in my one horse town that I live in in Guatemala charged about $5.40 per transaction and I was getting tired of it. So, I opened an account in the equivalent of a credit union that we have here and and sent a wire transfer down for about $40 when I was in the states, was given a debit card. Should have enough money to last the whole year until I go back to the states and do it all over again. Only members of the credit union can use the ATM, so it never runs out of money like the bank does at times here.

    • I remember walking past your credit union, Steve. That is a good point to remember. Our Nicaraguan banks often run out of money in the ATMs. Plus, here is a weird story. Once we took money out of the BAC ATM and went into the bank to exchange it for cordobas. The bank refused to exchange two of the 20 dollar bills that came from their machine because they had ink spots on them. No matter how Much I argued that they came from their ATM, they refused to exchange those bills. Crazy, huh?

      • Its possibly because red ink “splotches” are associated with cash that was inside a dye pack.
        Blue and green smears are associated with counterfeit money. They don’t have the technology available to test US bills, and those counterfeit pens are worthless on modern counterfeit bills. (The counterfeiters simply spray them with Scotchguard and the pen shows “real”.)

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