Taking Flight: How To Avoid Foreign Transaction Fees and ATM Fees

Before reading this post read our post on credit cards and our philosophy on paying them off in full every month.  If you don’t have the discipline to do this, then stop reading.  Credit cards are not for you!

In our early retirement (and life in general) we don’t plan on ever giving any of our money to banks or credit card companies ever again.  But considering we plan to move abroad, I needed to figure out a way to avoid foreign transaction fees with our credit card and bank ATM fees with our debit card.  

Lucky for us I stumbled across this great post from Millennial Revolution that pointed me in the right direction.

To be clear, we plan to use our credit card as much as possible for our spending because we believe it to be the most secure way to spend and because we will earn points.  That said, we also recognize that we will need easy access to our cash no matter where we are in the world.  In this post we are going to outline our plan on exactly how we are going to do this (with no fees (EVER)).

ZERO Foreign Transaction Fees

Capital One is the answer for this one.  We have personal experience with the cards below, and none of them charge foreign transaction fees.  The main difference for these is that some have an annual fee and some don’t.  Also the rewards structure and the sign-up bonus is different for each. 

        Venture Rewards Card Highlights: (As of 2/20)

1. 2 reward points for every $1 spent.

2. 50,000 bonus points when you spend $3,000 in the first 3 months.

3. $0 annual fee in the first year ($95 after the first year).

4. No Foreign Transaction Fees.

Venture One Card Highlights: (As of 2/20)

1. 1.25 reward points for every $1 spent.

2. 20,000 bonus points when you spend $1,000 in first 3 months.

3. $0 annual fee.

4. No Foreign Transaction Fees.

Savor Rewards Card Highlights: (As of 2/20)

1. 4% rewards on dining/entertainment.  2% at grocery stores.  1% on all other purchases.

2. $300 cash bonus when you spend $3,000 in the first 3 months.

3. $0 annual fee for the first year ($95 after the first year).

4. No Foreign Transaction Fees.

Savor One Rewards Card Highlights: (As of 2/20)

1. 3% rewards on dining/entertainment.  2% at grocery stores.  1% on all other purchases.

2. $150 cash bonus when you spend $500 in the first 3 months.

3. $0 annual fee.

4. No Foreign Transaction Fees.

Which credit card do we plan to use in Spain?

We will use the Venture One Card that is highlighted above.  The $0 annual fee is the main reason we will stick with this card.  Now that we have that sorted out, let’s turn our attention to ATM Fees.

No ATM Fees Anywhere (EVER!)

Is this possible?  Honestly, I didn’t realize that it was until I stumbled across the Charles Schwab High Yield Checking Account that is attached to a Charles Schwab Brokerage Account.  The best part of both of these accounts is that neither one requires a minimum balance or any money at all to open (ours are both currently sitting at $0 and will be until August of this year).  

The way this debit card works is pretty cool.  At the time of use, you will be charged the applicable ATM fee, and at the end of each month, Charles Schwab will automatically reimburse all fees for the month.  In other words, you can use this at any ATM, anywhere in the world that accepts VISA, and your ATM fees will be reimbursed at the end of the month by Charles Schwab.  

Summary

To put all this in perspective, we will have our cash cushion in our Charles Schwab account.  We will move funds over from our Vanguard Investment account to our Schwab account based on our annual withdrawal rate for that year (between 3 - 4% per year), and we will have our Capital One credit card set up to autopay the entire card balance every month out of our Schwab Account.  

There you have it!  Foreign Transaction Fees and ATM fees eliminated from our lives forever.  

So how do you use credit cards?  Do you take advantage of reward programs?  Do you pay them off every month?  Do you use them when you travel?

-Erik