How to properly withdraw money without getting scammed (too much) by banks ?

To this question, I found the answer near the end of my journey and I wish I knew it before because I would have have done it in a different way.

First, what I’m going to show you isn’t necessarily the most “economical” solution but since I didn’t anticipate anything, I was resigned to withdraw cash with the welcome help of my “Gold Mastercard”. Perhaps you are more familiar with some more “exotics” means of payment like traveller cheques or whatever, or maybe you though it would be wiser to bring a large amount of cash, hide it in your belt and get it changed once you arrive in some foreign exchange office, but anyhow you will probably need to withdraw cash at some point.

Before explaining anything, my first advice is to bring one extra card along with your main credit card. The idea being to use the one with which you have less fees and have an extra card for safety in case you cannot get any money out of your main card for whatever reason (it happened to me a couple of times and believe me, I was happy to pay more fees than the first one).

The different fees you’re being charged when you withdraw

  • The local bank charges a commission
  • Your bank will most likely also a charge you commission because you’re withdrawing abroad
  • The exchange rate may vary depending on when you’re withdrawing
  • The local bank may apply its own exchange rate

Concrete example of a withdrawal in Thailand

As for me, my bank charges 2% of the withdrawn amount, but let’s see in this example :

You just arrived to Thailand and step inside the Suvarnabhumi international Airport after a long flight. The first thing you might want to do is getting some cash so that you can actually do something like going to the city center, buying food, paying your accommodation, and so on.

So you’re going to an ATM and ask 8000 bahts. At this moment, the exchange rate is 30 bahts for 1 dollar (to make it simple).

First off, the ATM is likely going to gently ask you for its own exchange rate, let’s say 28 bahts for 1 dollar. If that happens, you have to REFUSE this rate and press no because it is most likely not going to be to your advantage.

Then, the ATM lets you know that if you want your money, it will cost you an additional 150 baht, regardless of the amount you want to get. And anyhow, you won’t have a choice if you want your baths.

So, if you ask 8000 bahts + the additional 150 baht charge from the local bank, converted to the “bad” exchange rate and to which your bank will charge you 2% for the withdrawals made abroad, we get :

  • ((8000 + 150) / 28) * 1.02 = $296.89
  • Though in reality, 8000 raw bahts are worth:
    8000 / 30 = $266.67
    In the worst scenario, you could lose $30.22
  • By declining the exchange rate, we get :
    ((8000 + 150) / 30) * 1.02 = $277.10
  • Even better, if you don’t get charged by the local bank, we get :
    (8000 / 30) * 1.02 = $272
    Which is a lot better than $296.89, a difference of over $24 pour $266.67 that you actually wanted.

And what if you withdraw 10 times during your journey ? You could spend $2720 instead of $2968.90 or even $2666.70 in the best scenario if you don’t get charged by your bank.

A potential saving of over $300!

The tip is to withdraw a big amount of cash at once so that you don’t get charged for the extra 150 baht every time, or to simply know the “good banks” and here is my feedback :

The non-charging banks

This is non exhaustive list.

  • Thailand
    • Krungsri Bank (Bank of Ayudhya)
      In that bank you need to withdraw at the counter otherwise the ATM will still charge you 150 bahts
  • Laos
    • I couldn’t manage to find a decent solution here. Besides, the withdrawal limit is often 1,000,000 kips to which you get additionaly charged of 30,000 kips
  • Cambodia
    • Canadia bank
      No extra fees, not even in the ATMs. Perfect.

If you manage to minimize the extra fees, hence not getting too much screwed over by the all sorts of banks, and more, if your bank has a low commission on your withdrawals, or even better, not at all, then you won’t have to withdraw large amounts, which minimizes also the risk of losing that money because you’re carrying less.

So you may want to anticipate in your own country and pick the best bank – before leaving – that will charge you as less as possible for the withdrawals made abroad, and if possible no extra fees.

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