Tuesday, January 27, 2009

Offshore Credit Card ATM Withdrawal Fees

Offshore Credit Card ATM Fees

One of the main draws of the offshore credit card or offshore debit card is the fact that the depositor is "instantaneously" linked to his or her offshore account through their local automatic teller machine.

How Offshore Credit and Debit Cards Differ from Domestic ATM Cards

While offshore cards differ from their domestic counterparts in some significant ways, they usually bear the same brand distinction and utilize the same international networks. Visa and MasterCard are the two biggest and most visible international credit card brands for both domestic and offshore banks.

The biggest difference is that typically an offshore credit card, in reality, offers you no credit whatsoever. In reality they are often either secured credit cards, prepaid credit cards, or debit cards. I will explain the differences in detail in a later post. Suffice it to say, no credit is actually extended to the card holder.

How Do Offshore Credit Cards Work in Bank Machines?

The cards themselves work virtually identically as far as the user is concerned. And the bank machine itself doesn't really care about where the bank is located. The difference most apparent to the user will be the withdrawal fees.

Withdrawal Fees on ATMs

Because offshore credit cards offer no credit they don't make their money by charging interest. They make their money on fees. Visa or MasterCard and the issuing bank often charge between 2 percent and 5 percent for withdrawals from automatic teller machines. For many would-be offshore banking clients this fee can be a turn off to the concept of holding an offshore account and/or an offshore card.

For others, the savings or peace of mind associated with having an offshore account makes the ATM withdrawal fees "worth it". For smaller withdrawals the fee can be less than the time and expense of executing an offshore bank wire. And, the banking client is often hoping that the transaction is less "attention getting" than receiving a large international bank wire.

Other Bank Machine Fees Associated with Your Offshore Card

In addition to withdrawal fees, there are also fees associated with checking balances. These fees are roughly equivalent to any "out of network" bank machine charge you would see for competing domestic banks, and the infrequency of needin to do balance inquires -- especially with online account access -- makes these less burdensome for most offshore bank account clients.

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