Here at LATAM Capitalist, we're a big fan of the Charles Schwab debit card for withdrawing cash from ATMs while abroad. We've been using it for years here in Mexico and other countries around the world. And spoiler, Schwab is still the best when it comes to spur of the moment ATM withdrawals. However, a relatively new player, Transferwise, has now become a key part of the LATAM Capitalist strategy.
Schwab is great, but it has one key fault, you can only hold US Dollars in your Schwab account. Then, when withdrawing from an ATM, Schwab gives you the spot rate on the conversion to the local currency. Schwab charges no fees for this service and even reimburses you the fees that are charged by the ATM. This is better than nearly all other banks. Other banks will give you poor conversions and then charge you fees on top of that!
So where does Transferwise come in for international travelers and expats then? Planned currency conversions. Sometimes, if you're going to be in an country for an extended period of time, or you are planning ahead for a future trip, you may want to take advantage of a favorable currency conversion without turning that currency into cold hard cash at an ATM.
Using Transferwise, you can convert from your home currency to 50+ worldwide currencies. Therefore, you can strategically convert currency when the rate is favorable. You can then hold that foreign currency in your Transferwise account and withdraw it at a later date from an ATM using Transferwise's debit card. However, there is a limitation to this strategy as Transferwise's debit card only allows £200 of fee-less withdrawals per month. After that they charge fees and they also don't reimburse the fees charged by the ATM.
For these reasons, a multi faceted strategy is the best way for you to get the best rate and pay the least fees. This multi facted strategy requires a Transferwise account and a local bank account in the foreign country you are in. As a tourist or traveler this may not be feasible, but if you are an expat living abroad, you will likely want a local bank account for a variety of other reasons.
If you do have a local bank account, you can then use Transferwise to convert your home currency to the local currency and deposit that local currency into your local bank account. Once it arrives, you can then withdraw the cash when needed from your local bank's ATM using their debit card (which if you chose a good bank, won't charge fees for using their own ATM).
Obviously, this requires some pre-planning, which is to be expected if you want to get the possible conversion rates for the lowest fees. For on the spot withdrawals, Schwab still remains supreme.
If a local bank account in a foreign country isn't feasible, Transferwise still has a lot of benefits. For example, you can convert to local currency before your next trip when rates are favorable and then use Transferwise's card to withdraw when you are on the ground.
If you'd like to try Transferwise, use this link to sign up and your first transfer will be free! After your first transfer, Transferwise will charge a small fee based on the amount and currency. And when I say small fee, they charge some of the lowest in the business.
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