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Debit or credit card abroad? Which is better for withdrawing cash

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debit or credit card abroad - better for cash withdrawal

In most countries, ATMs will accept both debit and credit cards of foreign card holders if you need to withdraw cash abroad. Let’s explore various scenarios and help you make the right choice.

Also read: Lose card abroad? Top 8 tips to get it back & save from misuse.

1. Using debit card abroad for cash withdrawal

If you use your debit card, it works like any transaction at home i.e. you need to have enough money in your account to withdraw cash and as you withdraw at a foreign ATM, the money will be taken from your account.

2. Using credit card abroad for cash withdrawal

If you use your credit card, it works as if you’re taking a loan or a cash advance from your credit card company. This amount is reduced from your available credit limit in your credit card account. For this, you don’t need to have money in a bank account, you need to have enough credit limit on your card.

Also read: Ultimate guide on how to travel on a budget in 2024.

3. Which is better?

To make the choice whether to use a debit or credit card abroad for cash withdrawals, the key thing to look at are the fees your bank or card company will charge you for this. Let’s explain this in detail below:

4. Case where using a debit card abroad is better for cash withdrawal

Let’s understand the benefit of using a debit card abroad over a credit card for withdrawing cash with an example. Here below, we see what a UK bank charges its customers for using its debit card or credit card in a foreign country:

1. Fixed cash withdrawal fee

  • Debit Card: £1.75
  • Credit Card: £1.75

2. Currency Conversion Fee

  • Debit Card: 2.75% of cash withdrawal amount
  • Credit Card: 2.99% of cash withdrawal amount 

3. Interest charges 

  • Debit Card: No interest charges. Bank will debit the amount from your bank account instantly. (Exception is that you don’t have money in your account and you use the bank’s overdraft facility, in which case bank will charge you an interest)
  • Credit Card: From the day of your cash withdrawal, bank will charge an interest of 3.99% per month. Bank will add the the withdrawal amount to you next credit card bill.

In this case, the debit card is the preferred choice to use at an ATM abroad for cash withdrawal. Because it has lower fees and no risk of paying extra interest charges.

Note – The above numbers are an example, please look at your own bank card’s fee for the exact charges.

Also read: Why your card doesn’t work abroad at ATMs & what to do?

5. Cases where using a credit card abroad is better for cash withdrawal

A credit card can be the better choice to use for an ATM withdrawal in a foreign country if:

  • You need more cash overseas than what you have in your bank account
  • You earn high value points on the credit card. So even if fees are higher than the debit card, the value of the points or benefits you get, are higher than what you would pay in withdrawal fees
  • You’re definitely going to pay your credit card bill on time, are not going to revolve the credit for months and therefore, you won’t incur high interest fees and charges
  • Even if you’re not going to pay your credit card bill on time, you’re aware and will have enough cash to bear the extra costs
  • You’re carrying only a credit card on this travel as you didn’t know all this
  • You’re rich and don’t care about interest charges and fees

Note: The ATM side of fees for foreign card holders are usually the same, whether it’s a debit card or credit card.

Also read: Withdrawing cash abroad? 9 best ways to save foreign ATM fees.

6. Do the ATMs abroad charge different fees for debit or credit cards?

In general, no. Foreign ATMs do not differentiate between foreign debit cards or foreign credit cards. The ATM side of the fees – ATM Fees and Currency Conversion fees are usually the same for all types of foreign cards. 

Only in rare cases, the ATMs abroad might charge different fees to foreign debit or foreign credit cards. If at all this is the case, the ATM fees on foreign debit cards are usually lower than those for foreign credit cards. If you’re super curious, you can try both a debit card and a credit card at the same ATM and see the fees before completing a cash withdrawal abroad.

Occasionally, the ATM might charge you different fees. E.g., In Portugal, debit card withdrawal have no ATM Fees. But for credit card withdrawals, you will get the option of Accepting ATM’s conversion or Declining ATM’s conversion. Simply select “Decline” or “Without” conversion and even you’re credit card withdrawal will not have any ATM Fees.

Be sure to check out the fee-free ATMs or low-fee ATMs abroad on ATM Fee Saver first. It will help you find the cheapest ATM in a foreign country.

Download ATM Fee Saver now or login online.

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