ATM fees of 4.5% in Spain. Is there a better way?

1. Find a better bank, like a credit union (low fees - I pay 1% for each withdrawal)
2. Be selective on which ATMs you use in Spain (you can always hit the cancel key if the fee is too high)
3. Use a 0% foreign exchange fee credit card (e.g. Capital One) for all but the smallest purchases; avoid using cash unless there is no other alternative

Who is charging you this fee? Your bank? This sounds like a foreign exchange fee to convert from your home currency to Euros. And it is the industry standard for large banks to charge that percentage.

If you live in the US (can't tell from your posting or your profile), there are several options to completely avoid ATM fees. Capital One and Charles Schwab among others offer a no fee debit card to use to get foreign currency. Charles will even refund any fees charged by the ATM.

I ran into a lot of Spanish bank ATMs that wanted to charge me a fee in 2016; not so many last year, but I was mostly traveling in a different part of the country and may have just been luckier in which ATMs I randomly stopped at. Imposition of fees can change at any time, so I don't know what the situation is like today, more than a year after my most recent trip. I can assure you that this issue is not limited to Spain; it affects many countries in Europe.

To reiterate what the other posters said:

• Get yourself a no-fee credit card and use it whenever possible; I carry two so I have a back-up.
• Get yourself a no-fee ATM card; I carry two so I have a back-up.
• Walk away from any ATM that displays a fee (after making a mental note of which bank was the problem so you can continue to avoid it).
• Always choose to pay (with a credit card) and withdraw cash (with an ATM card) in local currency. Do not perform any financial transaction in your home currency; doing that gives the merchant or bank the right to impose its own conversion rate, which will not be to your benefit.

I think I recall a thread here sometime in the last year, reporting on how it was becoming common for Spanish banks to charge transaction fees for ATMs. We saw it in 2019 at three different banks' bancomats in Italy. I think it was a straight 5€ fee per transaction.

So, this has been our experience. I use my local bank (small bank) for ATM withdrawals and purchases. They charge a fee, the ATM machine charges a fee and there is a foreign transaction fee.

I opened a Schwab bank account with ATM card (visa). Schwab refunds ATM fees and does not charge international fees. Schwab also has an app where I can transfer money from my small back account to Schwab and vice versa (it takes a day or two to process).

So, I carry two bank cards - just in case one doesn't work for some reason. And I have a couple credit cards.

We had problem a couple years ago because I had a credit union atm card. The credit union would not authorize withdrawals or purchases in Spain (even though I notified them I would be traveling internationally). So, if you choose to use your credit union account overseas, check before you go if it'll be a problem.

Good luck,
Marc

We found the same problem in Split Croatia last summer in the old city center. Canceled the transaction and looked for another ATM a few blocks away. It happens in the US too, especially in private businesses. I guess it is called “buyer beware.” Surprisingly, a small restaurant at our summer home started changing $3.99 to use a credit card to pay for dinner.

Who is charging the fee?

If you're referring to the cash machine ("ATM") fee, then when I come across this it's a fixed amount (sometimes only €2 say per withdrawal), so an easy way to reduce the total amount over time is making fewer transactions each for a larger amount. In the end €2 on a €250 withdrawal doesn't seem worth worrying about, and perhaps is a fair cost for the convenience. If it's a %age fee then that sounds more like your bank/card charging rather than the cash machine itself.

For avoiding cash machine fees entirely, last time I checked Unicaja Banco machines have no fee. But things do change.

Avoid DCC at ATMs (and elsewhere).

And increasingly, the "better way" these days is to avoid getting out cash and just pay by card or phone, though sometimes cash is unavoidable even now -

https://murciatoday.com/-cash-is-no-longer-king-in-spain-cards-are-winning-the-fight-for-your-money_1475947-a.html

I use a Chase debit card that has no fees.

Thanks everyone! I'm a Georgia girl whose son is in Spain for the next year at University of Salamanca (so happy!). He was surprised by the 4.5% ATM fee imposed by the bank in Spain. Our local bank charges a flat fee of $3 which is not bad at all. I will encourage him to use his credit card as often as possible. I appreciate all the helpful replies.
Blessings!

If your son is going to spend 12 months in Spain, or the school year and then travel some, he almost certainly will want to get a local bank account. The University should have had information on how to do that in his entrance packet (!?!)- or he should get the information from other foreign students in the program. Too many small charges to just keep adding to a credit card. Advantage - fewer bank charges; Disadvantage - at tax time you will have to report owning a foreign bank account (nothing to pay but they are checking up on us). There are apps that allow money transfer between USA and foreign bank accounts for very small fees so you can keep his account topped up as necessary. I wish that had been an option when my daughter was in school in Europe.

He will have a great time!

There’s no need to open a foreign bank account just because you’re going to be there a year.

My daughter married a Swiss man, moved to Geneva and has been there3 years. She still uses her local credit union debit card to withdraw Swiss francs from her USA bank account if she needs it.

The bottom line is your son needs a credit union account debit card and needs to search for a better ATM.

It is true that you don't need to open a new bank account. But if Frankie's son is going to spend a year in Spain he will find that life is a lot easier if he gets a Spanish bank account, I assume that things such as paying rent and bills will be a lot easier. And he will not have to worry about exchange rates as much.

I opened a Schwab bank account with ATM card (visa). Schwab refunds ATM fees and does not charge international fees. Schwab also has an app where I can transfer money from my small back account to Schwab and vice versa (it takes a day or two to process).

It's called a debit card, and here's how to do it:
https://thebudgetmindedtraveler.com/how-to-set-up-a-charles-schwab-bank-account-and-avoid-atm-fees-anywhere/

As a backup, I also carry a Fidelity debit card that works the same way. If a bank does not accept one (i.e. not in its network), it would accept the other. Used both all over the world, and never had to pay an ATM fee.

Just curious if the ATM your son was using was using dynamic currency conversion or if there was a specific fee? I found a machine in Sardinia that automatically switched to DCC when your card was read and would not allow you to accept the transaction in €. That as about a 4-5% hit. Clicked “Cancel” and walked away.

I had a similar experience to acraven while I was in Barcelona last year. The first ATM I went to wanted a hefty fee, so I cancelled and kept walking. 2-3 blocks later I tried the next ATM and there was no fee.

I was reluctant to chime in since the OP is passing on second hand information and is going off what her Son said. Basically, what happened is open to speculation, dealing with little fact and no chance for clarification (details).

However, I do agree with a couple of the above posters that the Son experienced DCC, based on the fact that a Percent was expressed. Hard to say if he had an option to decline, what the ATM said, etc; all details that would be valuable to help. As far as I know, based on my last visit, finding an ATM that does not use DCC, or having the option to decline still exists (Can't speak to the situation in Croatia)

Important for others reading this to know that if you accept, or are forced into DCC, that Banks that reimburse fees...like Schwab, Capital One, or maybe your Credit Union will not reimburse the DCC cost, that is a conversion that is done outside the wire transaction by the terminal processor, so technically not a fee, Schwab only sees the transaction in the Dollars charged.