penelope

I've been using my JP Morgan Chase Bank ATM card recently to withdraw cash in Mexico. I'd always understood that using an ATM card was the lowest cost method of getting cash overseas and my bank statements have previously always shown a $3.00 special service fee for overseas ATM withdrawals, which I guess is fair enough.

But I was horrified to see an additional 3.5% service fee has been levied on these recent withdrawals. Over a couple of weeks this has added up to nearly a hundred dollars in charges to withdraw cash from my own checking account, even though I've been careful to only use ATM machines that are part of the Cirrus network.

I've queried these charges with Chase and received the following response:

'A fee of $3.00 will be charged for each CIRRUS ATM
transaction occurring outside the United States.
Additionally, a conversion assessment of 3.5% will be
added to the currency conversion rate in effect between
MasterCard and Chase to convert international Chase Check
Card withdrawals and transactions to U.S. dollars. We
apologize for any inconvenience these fees may cause.'

As these withdrawals were not against a 'credit' line but direct from funds sitting in my own checking account, I fail to see the logic in Mastercard taking a chunk.

Anyone else come across this recently? I'm wondering if this kind of fee gouging is now common practice with US banks or just peculiar to Chase.

Mountain Trader

I've found Chase has high fees, high minimum balances and low interest-paid rates.

BrianBSL

I believe Cirrus is Mastercard's debit/atm card network, so that explains the MasterCard reference.

My local bank (Sovereign) charges a $5 fee per international ATM transaction, which I think is outrageous, considering they charge no fee for ATM withdrawals in the US. Its one of the reason's I'm trialing Bank of America right now, who is part of a global ATM alliance with no fee in several countries (although they too charge a $5 fee for international ATM's, and $2 inside the US which aren't theirs or an alliance partner's). Otherwise, I use a paypal debit card, which is only a $1 fee no matter where I withdrawal money from. They might add 1% fee to that too - it isn't too clear, but I've never compared the rates they reference to the rates I got charged.

Citibank (I have an account there as well, simply because they require you to have a checking account to open a CD and e-savings accounts) charges 1% on foreign transactions, but no set fee per transaction (that may vary depending on what type of checking account you have).

bluewatersail

Penelope, I think it is. I just feel most of the people who say ATM is best overseas don't really realize what they're paying in the end.

Standby4321

There are several considerations to this. One is that all cards are not created equal when it comes to add-on fees. Although most are tacking something on these days, they are not all at the same level. Second is that in order to conclude that using and ATM is NOT the best means of obtaining foreign currency, you have to have a lower-cost alternative. It's not travelers checks and it's not trading cash, so what is it? Finally, with flat fees per transaction, it makes a lot of sense to limit the number of ATM transactions by making larger transactions less often or simply charging things to escape that particular fee as much as possible.

jpdx

Opening a bank account and wiring huge amounts? I have a bank in Germany that will transfer anything up to $10,000 for a fee of €25. Hard to beat if you transfer the maximum.

Seriously, though, Standby4321, I agree with you; ATM cards are much better than the alternatives. Just do some research before departure and make sure to pick the right card.

tjl

I use a bank that charges only $0.75 for withdrawing cash from ATMs not owned by the bank, whether domestic or foreign. In Canada and other countries that I have used ATMs, I have not had difficulty avoiding additional surcharge ATMs (wheras in the US, nearly all banks have an additional $1.50 surcharge for other bank's ATM cards, so I only use the card in ATMs of the issuing bank). And when I look at the statement, I see approximately 1% worse than the interbank rate from oanda.com's historical listings.

Now, if you choose to bank with a very greedy bank (very common in the US), that's your choice. But don't assume that ATMs are necessarily expensive to change currency at just because your greedy bank charges huge fees and surcharges on the exchange rate.

dartagnan

I use State Farm Bank (no physical locations except in BMI), which gives me 5 ATM rebates per month up to $1.50 each, doesn't charge me a fee itself to use any ATM I choose, and doesn't charge ANY fee for using a foreign ATM.

It's slightly inconvenient to have to mail in the occasional check, but worth it.

number_6

US banks have been raising fees to absurdly high levels, despite record profits (or perhaps it is cause and effect). There are 2 large areas of alternatives if you object to your bank having such high fees:

1. many brokerage accounts offer ATM cards with zero withdrawl fee and close to market exchange rates (within 1%). The terms vary by brokerage and account type, but etrade is one example of fairly good terms.

2. many credit unions also offer ATM cards with low/no fees and typically 1% over on the exchange rate. Not quite as good as (1) above but pretty close, and generally better than most banks.

Other arrangements also exist for large amounts (USD 10,000 and up), but you have to do the research to avoid getting hit by exorbinant and unjustified fees. The banks seem to be relying on ignorance and inertia rather than offering a true product.

tom911

That's what I use now, particularly for ATM transactions outside the U.S. My previous bank started charging 2% plus $1.50, and the bank before that $3 a transaction. That was enough for me to close both of those accounts.

nako

My bank (Wells Fargo) charges $5 per foreign ATM transaction (not including any fee that the ATM owner charges). I've taken to pre-loading my PayPal account with money and using the debit card when I go overseas, as it only charges $1 per ATM withdrawal.

Mike

BearX220

Mustn't generalize; perhaps they're just not shopping around. Washington Mutual charges a flat 1% on foreign ATM withdrawals and no more. I think it's more than fair. Chase, on the other hand, is rogering people.

biggestbopper

Yeah, it used to be that way. But no longer (in many cases).
Many banks have decided it is easy to stick it to ATM users overseas who generally don't understand the whole forex thing anyhow.

I was once involved in a case where big US bank ripped a guy off on forex conversion of a credit card. We got a lot of money from the bank, but, one of the bank's lawyers advised it was chicken feed compared to how much they were taking the uncomplaining other card users for.

In any event, I generally use a low cost CREDIT card for cash advances and mail in a check to cover the advances even before the bill arrives. There are several banks which have more or less reasonable forex charges, e.g., USAA. Only problem is that ATMs are more convenient.

timfountain

Oh don't keep us in suspense, which bank is it?

canuck_in_pa

Wachovia seems to charge 1% + $1.50.

I have Crown banking with them though so I get 2 free withdrawals at other banks per month.

Unless I am in a really backward country I'll use my low-cost credit card whenever possible (Merrill+ Visa). I count on about $50/day for the rest, taken out all at once when I get there.

I would definitely change banks if they were charging what Chase is charging. That is outrageous.