Vacations are one of those moments we wait for all year. We plan the destinations, the schedules, and even the places where we're going to eat. However, very few people think about what's essential: how to withdraw money from an ATM without losing money.
Withdrawing cash abroad can become a headache. The operation seems simple, but the result in your bank account usually brings surprises. What should be a quick transaction turns into unexpected fees and abusive currency exchange rates.
The trap behind the button
What seems like help from the ATM is actually a maneuver against your wallet. It's called Dynamic Currency Conversion (DCC) and it consists of showing the amount in your own currency. The problem is that this supposed benefit hides inflated exchange rates and extra fees.
Accepting this option means paying more without realizing it, travel experts insist: never accept the ATM's conversion. The recommendation is clear, always choose the local currency, whether it's pesos, euros, or dollars. Your bank will apply a fairer exchange rate and you'll avoid the ATM operator's hidden fees.
Hadleigh Diamond, a specialist in services for travelers, warns that the fine print is the real enemy. ATMs that offer DCC apply margins much higher than those of a bank. The best way to protect yourself is to always reject the conversion.
What to do to avoid losing money
Letting your bank do the conversion is almost always the best option. Although we may distrust them, they usually have more favorable international agreements. This way, the exchange rate will be more competitive and the fee lower than what the ATM would apply.
Another important point is the choice of ATM; those located in airports or tourist areas are usually the most expensive. They're often managed by private operators who impose abusive conditions. On the other hand, withdrawing money from ATMs of well-known banks is safer and more economical.
A quick search on Google Maps with the phrase "Bank ATM" can make a difference. Finding an HSBC, Santander, or ING on side streets helps you pay less. If you also use an ATM from your own bank, you may only pay the currency conversion and nothing else.
The timing of withdrawing money also matters. Experts recommend withdrawing cash on the first day of your trip and doing it in a single transaction. This way, you reduce fees, which are usually higher when you make several small withdrawals.
Consider a simple example: if you need $600 and make six withdrawals of $100, you'll pay six fees. With a fixed fee of $5 per transaction, you'd lose $30. On the other hand, withdrawing everything at once means you only pay one fee and the savings are clear.
Another alternative is to travel with cash from home. But don't forget that each country has cash limits that can be brought in. Checking before you travel prevents problems at customs and possible penalties.