How to avoid bank fees while overseas

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With  Oyetunji Abioye, 08034433925 (sms only)
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Sometime this week, we examined how to reduce your bank fees and we focused on the cost of operating your bank account. Today, we will look at how to reduce the often-high cost associated with your financial expenses while travelling abroad. A particular emphasis will be paid to international Automated Teller Machine fees, credit card fees overseas and exchange rate issues.

According to www.wisebread.com, the worst thing to get charged for when you are on vacation is a fee for using your own money. Even worse, there are fees you may not even know existed until you return home and check your statement. They are not all small fees, either.

Imagine if over the course of your trip you visited the wrong ATM 10 times and ended up with high ATM fees. Here are the most common fees you may run into on the road.

ATM Fees

The ATMs are probably going to be your biggest enemy when it comes to overseas bank fees. Most Nigerian banks charge fees per overseas ATM withdrawal. If you travel a lot or take out money frequently while on the road, these can quickly add up.

The best way to save money on bank fees is to do a little bit of pre-planning before your trip. You have a couple of options that can help you eliminate ATM fees.

Global ATM Alliance

A group of international banks have come together to form the Global ATM Alliance. Some Nigerian banks have affiliation with some banks that are members of this alliance. Any customer who holds an account with a participating bank can take out money from any associated ATM without a fee. Note that while you won’t be charged for using a member bank ATM, you may still get charged for foreign transactions based on the amount you withdraw. Make sure you check with your bank to find out what its fees are. Also, check with the Nigerian bank to find out where its affiliation lies among the alliance members. The Global ATM Alliance has 10 banks as members. They are Bank of America (United States); Barclays (England, Wales, Spain, Portugal, Gibraltar, and certain countries in Africa); BNP Paribas (France and Ukraine); China Construction Bank (China; Bank of America card holders only); and Deutsche Bank (Germany, Poland, Czech Republic, Spain, Portugal, and Italy).

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Others are Banca Nazionale del Lavoro (Italy); Santander Serfin (Mexico; Bank of America card holders only); Scotiabank (Canada, Caribbean, Peru, Chile, and Mexico); Westpac (Australia, New Zealand, Fiji, Vanuatu, Cook Islands, Samoa, Tonga, Papua New Guinea, and Solomon Islands); ABSA (South Africa); and UkrSibbank (Ukraine). Inquire from your bank in Nigeria which of these it is affiliated with, to avoid credit card fees.

Many credit cards charge a three to five per cent fee on any purchase made overseas. Think about that for a second. If you go on a two-week family vacation and spend $6,000 out of the country, you would end up paying $180 in fees. Luckily, not all credit cards charge this fee, so choosing the right credit card for travel can save you a lot of money on the road.

A few extra tips:

Take a few other extra steps to make sure you are not spending a few more extra dollars each time you reach for more cash.

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Do not use random ATMs

While it may be convenient to use the ATM at your hotel or at the corner store, bear in mind that such will cost you the most in fees.

Do not exchange money on the street

Sometimes it is tempting to exchange money with the random person outside the bank or the people standing around at border crossings. Don’t! You may think that they have better rates than the bank, but they are usually scammers. Best-case scenario, you could get a bad exchange rate. On a worst case, you could be completely ripped off.

Avoid currency exchange booths

Though not as bad as the hustlers on the street corner, currency exchange booths are the next worst thing and they typically have horrible exchange rates, especially the ones located in airports.

Exchange with other travelers

If you end up with a bunch of extra local currency at the end of your trip, consider selling it to another traveler for dollars. You will probably get a better rate and you can avoid all bank and conversion fees this way.

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