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USAA is a bank and insurance company designed to serve former and current members of the United States Armed Forces. They offer a full range of financial products, including many types of insurance, banking and credit card services, loans, investments, and more.¹ At present, they boast nearly 13 million members.²
Both Visa and American Express credit cards are available from USAA, along with debit cards for their checking accounts.³ These can be used domestically or internationally. When traveling abroad, though, using your credit or debit card can often be expensive. Foreign transaction fees, service fees, and other charges can make your foreign purchases a lot more expensive than you think.
Fortunately, USAA doesn’t charge foreign transaction fees. But there are other fees, charges, and potential pitfalls that you should be aware of.
In this guide, we’ll discuss:
- USAA debit and credit card fees
- International ATM fees for USAA
- Dynamic Currency Conversion (DCC)
- Tips and tricks for paying with your cards abroad
Knowing the charges you might face and how to avoid them will help you enjoy your travels without racking up extra costs.
USAA offers debit cards for ATM withdrawals as well as purchases and other transactions, associated with their checking accounts. Savings accounts come with an ATM card, but it cannot be used for transactions and is not considered a debit card. There are some restrictions and fees associated with using a USAA debit card, especially in an international context. Though as mentioned earlier, there are no USAA international fees on the transactions themselves. We’ve summarized the debit card fees for checking accounts below. ⁴
|Fee or Charge Type||Checking Account Debit Card|
|Monthly Service Fees||$0|
|Minimum Balance Requirement||$0|
|Withdrawals at Non-USAA ATMs||$2, 10 first are free|
|Non-USAA ATM Fee Refund||$15 per month (except on Cash Back Rewards Checking; only applicable to US ATM transactions)|
|Foreign Withdrawal Fees||1%|
|Foreign Transaction Fees||$0|
Read on for tips and tricks on how to control and reduce the potential for incurring these fees when you travel abroad.
USAA debit and credit cards also offer currency conversion services indirectly, by allowing you to make ATM withdrawals in the local currency at ATMs around the world. Debit cards have a 1% foreign withdrawal fee associated with them, whereas credit cards do not. However, in both cases, the actual conversion rates can play a big role in how good (or bad) a value you are getting from this service.
Online currency exchange rate information is usually reported at what is known as the mid-market rate. Googling a rate? It’s the mid-market rate, that you’ll be seeing. This is the rate that banks and institutional investors often are able to get when they make currency exchange. Individuals aren’t quite so lucky, though. Usually, banks that provide currency conversion services charge the mid-market rate with a markup included, as a sort of fee or service charge. There is limited to no visibility to the markup, which can make it challenging for consumers to know if they are getting a good deal.
One option to avoid this uncertainty is to take advantage of currency exchange services from companies that are dedicated solely to that market. For example, Wise offers a borderless currency account, which can store up to 40 different global currencies, and allow seamless exchange between those currencies. The rate used is the mid-market rate, with a separate, clear service fee. You can also get the Wise multi-currency debit card, which you can use to pay for goods and services all over the world. Besides, opening an account is totally free, so it’s worth to give it a try. This can be a great alternative for travelers abroad to access local currency, rather than relying solely on one card.
In terms of USAA credit cards, none of them have any foreign transaction fees. Both American Express and Visa cards are available for USAA members, and can be used anywhere globally that those cards are accepted. Cards are available with various features, including cash back rewards, rewards point cards, low interest rate cards, and a special Military Affiliate card. They all come with no annual fee, and no penalty APR, in addition to the lack of foreign transaction fees. In essence, this means that cardholders can use their cards outside of the US with no additional charges.
The various fees, charges, and covenants associated with USAA credit cards are outlined below.⁵
|Fee or Charge Type||Fee|
|Cash Advance Fee||up to 3% (waived when done electronically between USAA accounts)|
|Interest Rates||9.15% to 28.15%, 10% for special accounts offered to pre-commissioned officers|
|Minimum Interest Charge||$0|
|Late Payment Fee||Up to $35|
|Returned Payment Fee||Up to $35|
|Foreign Transaction Fees||$0|
In terms of using your USAA credit card abroad, as discussed there are no foreign transaction fees. However, the rates at which your purchases are converted into US dollars are governed by the credit card processor — Visa, American Express — or the merchant or its agent and not USAA itself. This can leave you subject to poorer exchange rates, similar to those employed by foreign ATM companies known as dynamic currency conversion (DCC), which we’ll discuss in more detail later.
Let’s look closer at the international ATM fees that USAA customers can expect to pay. This assumes you have a checking or savings account at USAA, and are using an ATM outside of the US that is not part of the USAA-owned network of 60,000 ATMs in the continental US.
Outside of the 60,000 USAA ATMs in the US, customers can use any other ATMs in the US, and any ATMs abroad.
- The 60,000 network ATMs do not have any service fees associated with them.
- All other ATM transactions have a USAA service fee incurred at $2 per transaction, after 10 free transactions.
- USAA offers a refund on these fees of up to $15 per month, but only on those incurred at non-USAA ATMs within the US. They do not refund fees on ATM transactions in foreign countries, nor for those with the USAA Cashback Rewards Checking account.
- Debit or ATM card withdrawals are charged a 1% foreign transaction fee when made outside the US. This is applied whether the withdrawal is made in a local foreign currency, or converted to US dollars.
As touched on earlier, dynamic currency conversion (DCC) can come into play when you make an ATM withdrawal in a foreign country. While it may not sound exciting, it’s definitely something you’ll want to know about. DCC can add significant extra cost to the currency exchange process. You’ll get hit by DCC when you choose an ATM abroad to charge you in your native currency. ATMs that advertise free currency exchanges may not charge fixed service fees, but use much less favorable rates. That’s why it’s best if you always choose to be billed or charged in the local currency, and not in your home currency.
Whether you have a credit or debit card, just an ATM card or all of the above, there are some useful tips and tricks to keep in mind when traveling abroad. By knowing the best ways to access funds while traveling, you can avoid excessive fees and surcharges. That way things cost what you think they cost and you can enjoy your trip without getting an unexpected surprise bill in the mail when you get home.
- Always use a card that does not have any foreign transaction fees on your ATM withdrawals, like those from USAA.
- Don’t fall for “no currency exchange fees” at ATMs, as they are likely going to still charge you more due to DCC.
- Research what ATM networks you can use fee-free, if any, when traveling abroad.
- Avoid ATMs in tourist or entertainment-heavy areas (bars, clubs, convenience stores), as they usually have additional, ATM-specific fees and surcharges compared to those associated with banks and financial institutions.
- Don’t forget to turn on “travel mode” or notify your bank you will be traveling before you go. This will ensure your credit, debit, and ATM cards don’t get rejected for flagged for suspicious activity.
- Take a second card for back-up, in case anything unexpected happens – like the card provider having technical difficulty
- Prefer large a withdrawals. Don’t make multiple small withdrawals, as you’ll get hit with fees each time – and some are not percentage based, meaning you’re paying more to access your own money.
If you follow these tips, you’ll get the most out of your USAA checking, savings, or credit card account. The best part of all of this is that USAA doesn’t charge foreign transaction fees, and even the foreign ATM withdrawal fees are quite competitive. If you still don’t wish to get hit with these fees, then it’s worth checking out alternatives, such as the borderless currency account from Wise or even an old classic like traveler’s checks. There are lots of options from which you can choose to maximize your value and minimize the cost to access your funds in foreign countries.
All sources last checked on 11 March 2019
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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