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I have a Sterling-based card that allows me to make foreign currency withdrawals at no charge:

We don't charge fees when you spend abroad.

  • We don’t charge you a fee to withdraw cash outside the UK.

  • The ATM provider may charge you a fee for taking cash out.

  • Whatever you spend abroad will be converted to Sterling at a rate set by MasterCard®.

That second point is rather vague. Is it typical to be charged? By how much, and on what basis? Do the charges tend to vary by country, for example in the Eurozone, or elsewhere? How does one find out?

I've used another card (in the Netherlands) that also offers no-charge withdrawals. The statement slip for a transaction says:

02/07/18
Withdrawal: EURO 500
Transaction amount: GBP 457.37
Exchange rate: EUR 1 = GBP 0.914745
Markup = 3.24%

Well, 500 * 0.914745 is 457.37, so what is that "markup"? Is that the ATM's charge; i.e. the ATM charged an additional 3.24% of the € 500?

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    In your example, the 'markup' is hidden in the exchange rate. The EUR/GBP exchange rate quoted by the ECB on July 2nd was 0.8865, meaning that 500€ were worth GBP 443.25, meaning that you paid a fee of about £14 for the withdrawal. – Tor-Einar Jarnbjo Aug 5 '18 at 9:43
  • Where are you travelling to? Fees vary by country en.wikipedia.org/wiki/ATM_usage_fees – Traveller Aug 5 '18 at 12:16
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    In some countries, the ATM tells you the fee during withdrawals. In some countries, there is a sign at the ATM listing the fees. In either case, it is almost always a very bad idea to have the ATM convert this to GBP instead of your bank, since the exchange rate if far worse. – npl Aug 5 '18 at 12:31
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I don't know if this mandated by some international standard or agreements between financial institutions but in my experience any charge by the ATM provider will be displayed on the screen before going through with the transaction. I have seen this in very different countries everywhere in the world.

So if you haven't noticed anything, chances are there wasn't any fee from the ATM provider (and many ATM in mainland Europe apparently charge no fee). Note that if there was a charge, it could appear as a separate transaction in your credit card statements.

The markup on the other hand is a fee your bank applies to foreign currency transactions on top of the actual exchange rate on that day. It is not related to any fee from the ATM provider and really depends on your bank and card.

The exchange rate you see on the statement is not the best rate available on the market or through the credit card network. If you look at the currency converters provided by Visa or Mastercard, €500 should be a little over GBP 446.

I assume there might still be banks that do charge fees on cash withdrawal abroad but promising “no fee“ is really common and virtually meaningless. The markup or conversion fee is what makes a difference. Where I live, many cards have around 3%, 1-2% is not uncommon. Cards with even lower fees (e.g. from Revolut or N26), with some caveats.

  • I thought that withdrawing case with my card would use the Mastercard conversion rate (it's what I understand from reading around) unless I managed inadvertently to agree to using the ATM's rate. If not, and cash withdrawals are at the mercy of whatever the ATM operator decides, "no fee" is meaningless as you say, because the ATM's rate can make a huge difference. However, at least as far as cards issued by UK banks are concerned, many if not most do charge fees if you withdraw cash abroad. – Daniele Procida Aug 5 '18 at 14:55
  • @DanieleProcida Sorry if I wasn't clear, this markup would be imposed by the card issuer (e.g. your bank), this is not the ATM's rate or anything the ATM operator decides. My point was very often card issuers write “no fee” in the sense that you don't have a fixed lump sum fee for withdrawals but they still charge conversion fees in the form of a slightly less favorable rate. That's so common that you will see that both the Mastercard and Visa calculators let you simulate that. You would have to check the fine print to know if that's really the case for your card. – Relaxed Aug 5 '18 at 21:09
  • @DanieleProcida What's the name of the other card you used for this transaction so I can check the terms and conditions? – Relaxed Aug 5 '18 at 21:16
  • @DanieleProcida The ATM only determines the conversion fee if you agree to your withdrawal being billed to your credit card in GBP rather than the withdrawn currency - something which is getting more common in some places as it is a way for ATM operators to make money. In any case, you should be asked this, and you should typcially always choose the local currency. – npl Aug 6 '18 at 10:03
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In the US, the ATM surcharge will be displayed on the screen, and you will have to press a button to consent or refuse the transaction. There is no fixed charge; banks are free to set the surcharge to pretty much anything they wish. It is typically around $3, but may be much higher in some areas (like large city airports!). But the ATM may be part of a surcharge-free network where cooperating banks may offer free withdrawals to holders of some other banks' cards. If you are using a foreign credit card, it's unlikely to be part of such a network.

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