Nasty Secret You Didn’t Know About Using ATMs Abroad


You may have noticed that whenever you use your card abroad, most POS machines and ATMs can automatically pick up the country where your card has been issued (e.g. UK). Once it has figured out that your card is ‘foreign’, the machine assumes that you don’t hold the currency and will offer you a seemingly innocent question that reads something like this:

  • Chosen Amount €200 EUR
  • Todays Exchange Rate: €1.00 Euro = £0.7727 GBP
  • Debit from your account £154.76 GBP

The ATM machine will ask you if you want it to debit your account in your card’s native currency, GBP, using the rate shown on screen, or in the local currency; in this example, EUR.

You will also note a smaller message which confirms that the ATM will only payout in the local currency, Euros, regardless of what currency you choose to debit your account in. It also highlights that a surcharge of 6% is included in the rate displayed on the screen and gives an exact GBP cost for taking out 200 Euros.

Should You Take Up The Machine’s Offer?

I am always hit with confusion at this point. Despite showing a fixed amount in a currency I am familiar with, I am wary of the machine’s offer since it is openly admitting to adding a 6% fee to the exchange rate offered.

If you do choose this option, the merchant or ATM provider can apply their own exchange rate. This rate usually has a mark-up on the interbank rate (in this case 6%) enabling the ATM provider or merchant to make a profit on your transaction.

What If I Turn The Offer Down?

Debiting your account in the local currency (EUR) might seem a less desirable option since you don’t know what that €200 EUR is costing you GBP, but this is all part of the sneaky plot to take some extra money from your pocket.

By choosing this option, the ATM will charge your card in Euros, but more importantly, it will let the card issuer handle any currency exchange, meaning you will benefit from using your bank’s exchange rate, which of course, you don’t know either. The frustrating thing is that you, therefore, have no solid evidence, when you are standing by the machine, on which option is better.

I can tell you, however, that the debiting your account in the local currency is almost always the better option, since DCC providers are allowed to add a fee to the exchange rate (6% in our example), so the final amount deducted from the user’s account will nearly always be higher than running the conversion via the user’s own card issuer.

Just say ‘NO’ to whatever rate the machine is offering you.

Is There A Better & Cheaper Way?

By saying “No” to the ATM you will be charged using your bank’s exchange rate + any relevant fees. Your bank’s exchange rate will be higher than the interbank exchange rate.

To get cash out from ATM’s without being charged rip-off exchange rates, take out a free Revolut card (I have reviewed the Revolut card in detail), load it up with cash (it is prepaid) and then choose option 2 in the example above, ie debiting your account in the local currency. Your Revolut card will use the interbank exchange rate with no mark-ups or hidden fees. This will immediately save you 6% over the “offer” from the machine.

What’s more, if you’re using your Revolut card and already have a Euro account, the ATM will simply deduct the funds from that account.

How Do I Apply?

Right now this card is only available to my UK and EU readers via this link, but there are imminent plans to expand the card to North America, the Middle East, Asia and Australasia, so please feel free to register your interest for the card on our Luxury Travel Concierge page. Submit your name and email address to get yourself at the front of the queue. We will personally email you when the card becomes available beyond the EU.

If you live within the EU, enter your mobile number here, and Revolut will text you a link. I have an iPhone, so the link opened into iTunes, where I was able to “get” the App. If you don’t have an iPhone, you will be able to download Revolut from Google Play.

You then have to fill out your name etc (takes 30 seconds) and top up £10 GBP/€10 EUR (super easy as you can just place your card in front of your phone camera).

You should also immediately request your free card from within the app (as it won’t arrive automatically). Make sure that you order your free card with standard delivery.

Once you have loaded some cash into your Revolut account, and you have received your card, you can immediately spend and withdraw cash more-or-less anywhere in the world without paying those rip-off fees.

Note: Benefits offered correct at the time of writing but may be amended at discretion of the vendor. Posts may be sponsored by the proprietor or brand being appraised. All opinions remain our own & are in no way influenced.