Our experts answer readers’ banking questions and write unbiased product reviews (here’s how we assess banking products). In some cases, we receive a commission from our partners; however, our opinions are our own. Terms apply to offers listed on this page.
The author, Zina Kumok.
Zina Kumok
I opened up a new bank account to save on ATM fees during a trip to Japan.
I withdrew less from the ATM than I had anticipated, so I only saved $19.
I used a credit card with no foreign transaction fees — but crucially, I selected local currency when I did.
When my husband and I decided to plan a trip to Japan, we knew there were a million details to figure out. This included big questions, like where we would stay and where we would travel, and small questions, like whether we should bring a voltage adapter or a travel umbrella.
At the last minute, one more question came to mind: Did I need a new debit card for the trip?
After doing some quick research, I decided to get a new card just a few days before our flight. I only saved a relatively small amount with my new card, but I used several other strategies to keep my trip affordable.
See Insider’s picks for the best banks »
Why I got a different card
When I was planning for my trip to Japan, I knew my credit cards would not charge foreign transaction fees. But when doing my research, I read that many Japanese businesses still rely on cash, so I knew I would have to get money from an ATM fairly often.
My regular bank doesn’t charge domestic ATM fees and refunds out-of-network fees. But when I called them to ask about foreign fees, they confirmed that they charge a 1% fee on all foreign ATMs. Over the course of a two-week trip, that small fee could add up quickly.
I started doing some more digging and heard about a bank that did not charge foreign ATM fees, one of the few of its kind. In a pinch, I opened and funded the account. I anxiously waited for the card to ship, and it was delivered just a couple of days before I left on vacation. The account was free to open, and there were no monthly maintenance fees.
I didn’t end up saving a ton of money
During the two-week trip, I withdrew about $1,900 in cash, which would have cost me $19 in ATM fees if I had used my old debit card. That’s a pretty small price to pay, especially if you don’t want to deal with the hassle of opening a new account.
But if I had ended up needing to withdraw several thousand dollars — which I had expected to do — opening the new card may have been worth the extra time.
If you’re going to open a new account just for a special trip, make sure you understand the fee schedule. After the trip is over, decide whether you’re going to keep using the account. If not, you may want to close it to avoid any inactivity fees. Also, some banks will charge a fee if you don’t maintain a minimum balance or have direct deposit tied to the account.
The rest of my foreign payment strategies
In my travel experience, the most important card you need while traveling is a credit card with no foreign transaction fees. These fees are often between 2% and 3%, but it’s fairly easy to find a card that doesn’t come with foreign transaction fees.
If you plan to take out a lot of cash, you should figure out how much you’ll owe in total fees. Every bank has its own policy for foreign ATM withdrawals. While my original bank only charges a 1% ATM fee, some banks charge as much as 3%. At that rate, if you withdraw $2,000 abroad, you could pay $60 in fees.
When I was researching my trip, I also discovered that you should always pay in the local currency instead of your native currency when using a credit card. When you pay with a credit card abroad, the retailer may give you the option to pay in the local currency or in your native currency.
Even though it seems like it’s best to choose your native currency, it’s actually best to pick the local one. When you do that, your bank will automatically select the most favorable conversion rate. This can end up saving you a few bucks per transaction, depending on the total dollar amount. If you select your own currency, the credit card issuer may charge an extra fee for converting the funds.
Also, try not to withdraw more in cash than you actually need. When you take out foreign currency, you will have to get it converted back to your regular currency at the end of the trip. During the conversion process, you may end up paying a slight fee.