The Schwab Debit Card: One of the Most Useful Cards in My Wallet Isn’t a Credit Card

Quick Take

• Verdict: The Schwab Bank Investor Checking debit card is one of the first cards I tell travelers to get, before many credit cards, and it costs nothing.
• What it is: A free checking account at Charles Schwab Bank that comes with a Schwab One brokerage account you never have to use.
• The perk: Every ATM fee, at any ATM in the world, is refunded, and there’s no foreign transaction fee on top.
• Best for: Anyone who pulls cash out of any ATM anywhere in the world, and anyone who’s tired of paying $3.50 to get $40 out of the machine at the bar.
• Skip if: You need a checking account that pays real interest, or you regularly need more than $1,000 of ATM cash a day.
• Cost: $0. No annual fee, no monthly fee, no minimum balance. I don’t take commissions, so there’s no referral link here and nothing in it for me if you open one.

I’ve written about a lot of credit cards over the years, and the card I recommend most often to friends isn’t one of them. It’s a plain Visa debit card from Charles Schwab, and the pitch fits in one sentence: walk up to any ATM on earth, take out cash, and every fee the machine charges you gets refunded. The casino ATM that wants $9 for the privilege, the gas station machine in the middle of nowhere, the lone independent ATM in a tourist town that somehow charges more than the hotel breakfast — none of it costs you anything, because Schwab pays it back at the end of the month.

I’ve had mine for years and used it in dozens of countries, which is why this is the one I recommend: I can vouch for how well it works, and I’m far from alone in that. Everyone who travels should have one, but the thing is, the card earns its keep at home too, which is why this post is longer than “open it and go.”

What the Schwab Debit Card Actually Is

The card comes with the Schwab Bank Investor Checking account, which Schwab used to call “High Yield Investor Checking” until someone noticed the yield wasn’t high and they quietly dropped the first two words. The checking account is free, with no monthly fee, no minimum balance, no overdraft fee, free checks, bill pay, Zelle, mobile deposit and a Visa Platinum debit card, and it’s the debit card that does all the work.

The one wrinkle is that Schwab only offers the checking account linked to a Schwab One brokerage account, so when you apply you open both at once. The brokerage account has no fee and no minimum either, and you’re under no obligation to buy a single share of anything, so if the word “brokerage” makes you nervous, treat it as a second screen in the app you never tap. Plenty of people have held the pair for a decade with the brokerage side sitting at $0, and Schwab has yet to complain.

The Travel Angle: Any ATM, Anywhere, No Fees

Schwab refunds every ATM fee charged for a cash withdrawal, with no limit on the number of withdrawals or the size of the fee, and it does this at any ATM that accepts Visa, which is close enough to every ATM on the planet. It doesn’t matter whether the machine belongs to a bank, a casino, a gas station, a convenience store or one of those independent operators that set up shop in tourist areas and charge whatever they think they can get away with. The fee comes out of your account when you withdraw, and then Schwab puts it back as one lump credit at the end of the month, so if you pulled cash five times you’ll see five fees and then one refund that adds up to all of them.

Here’s what that looks like on my own statement over a couple of months, at home and abroad:

The second half of the deal is that there’s no foreign transaction fee, which most bank debit cards charge at 1% to 3% on every foreign withdrawal. Schwab converts at the rate Visa uses, which is about as close to the real exchange rate as a consumer can get, and that matters more than the ATM fee does. A $7 fee on a $300 withdrawal is about 2%; a 3% foreign transaction fee on the same $300 is $9, and your bank won’t refund that one.

There is one trap, and it isn’t Schwab’s. When an ATM abroad asks whether you’d like to be charged in US dollars instead of the local currency, say no, every time, because that’s dynamic currency conversion, and it’s the ATM operator offering to do the exchange for you at a rate it sets. Schwab rebates fees, not bad exchange rates, and its own fine print says a DCC charge won’t be refunded, so a “yes” there is the one way to lose money with this card. Always withdraw in local currency and let Visa do the math, and the same goes for paying by card: whenever you’re abroad, it’s always better to pay in the local currency and NOT in US dollars.

The side effect is that you stop planning cash around fees. You take out €40 because you need €40, instead of taking out €400 because you only want to pay the fee once, and you stop walking around a foreign city with a week’s worth of cash in your pocket. Hard to argue with that.

Cash Only: Why I Don’t Use It for Purchases

I use this card for one thing, which is getting cash out of machines, and I’d suggest you do the same. The card works fine for purchases, and there’s no foreign transaction fee on those either, but a purchase on a debit card earns nothing, while the same purchase on a no-foreign-transaction-fee credit card earns points, often 2x or 3x on travel and dining, and comes with a credit card’s dispute process if something goes wrong. Every dollar you spend on the debit card is a dollar that could have earned points on a credit card, so the debit card stays in the wallet until there’s an ATM in front of me.

The Visa Platinum debit card does come with a thin set of Visa benefits: travel and emergency assistance services, travel accident insurance on tickets bought with the card, purchase security and extended warranty protection on some items, and zero liability for fraud. They’re nice to have, and nice is the right word. Any decent travel credit card covers the same ground with better terms and adds trip delay, baggage and rental car coverage on top, so put the purchase on the credit card and keep the debit card for cash. Schwab publishes the full list in its Visa guide to benefits if you want the fine print.

Beyond Travel: Why I’d Keep It Even If I Never Left the Country

The rebate works the same way at home, which means you never have to think about which ATM is “yours” again. The machine at the bar, the one in the 7-Eleven, the one at the stadium that charges $5.99 and makes you confirm it twice, the casino floor in Vegas where the fee is designed for people who’ve stopped doing arithmetic — all refunded. If you’ve been driving past three ATMs to get to your bank’s branch, that habit can go.

It also makes a good second checking account, and I’d argue everyone should have one of those anyway. Debit card fraud is a worse headache than credit card fraud, because the money leaves your account first and you argue about it later, so a dedicated cash account with a modest balance keeps your main account out of it if a skimmer in a foreign gas station ever gets the number. Schwab covers unauthorized activity under its Security Guarantee, and it doesn’t charge an overdraft fee, so a withdrawal that would overdraw either pulls from your linked brokerage cash or doesn’t go through, which is the behavior you want from a card you’re using in a country where you can’t call anyone.

And because it’s attached to a brokerage account, money sitting in the checking account is one transfer away from a Schwab money market fund paying real interest, which is the “high yield” they took out of the name. The checking account itself pays close to nothing, so don’t park cash there, but the fix is a tap in the same app rather than a different bank. It’s the rare case where the fine print makes the product better.

How I Use It

I decided to make Schwab my primary checking and brokerage account. Everyone’s situation is different, so I won’t automatically suggest you do the same; I did it to simplify my life. I know people who use it purely as a travel slush-fund account, keep a few hundred dollars in it, and top it up before a trip, and that works just as well. Whatever makes sense to you, do it. For me, simplicity wins, so I made the leap and made it my primary.

Abroad, I prefer ATMs attached to actual banks during business hours, not because the fee matters but because a swallowed card is easier to fix when there’s a human inside, and I decline the dollar conversion every time the screen offers it. My wife has her own card on the same account, also free, and at home it’s the card I use at the one gas station in town that still wants $3.50 to give me my own money.

The Catches

There are a few, and none of them are deal-breakers, but you should know them before you’re standing at an ATM.

• $1,000 daily ATM limit. That’s the default cash withdrawal limit per card. In practice the limit is per card rather than per account: my wife and I each carry a card on the same account and have each pulled $1,000 on the same day. That’s my experience, not something Schwab documents anywhere I can find, so treat it as anecdotal and don’t plan a cash deposit abroad around it without checking.
• Interest is a rounding error. The checking account pays a variable rate that rounds to nothing. Keep the spending money there and the savings in the linked brokerage’s money market fund or at your high-yield bank.
• You have to open a brokerage account. The application is longer than a plain checking account because of it, and you’ll answer questions about investing experience that don’t apply to you. Answer them and move on; nothing about it costs money.
• Dynamic currency conversion is not rebated. Covered above, but it bears repeating because it’s the only way to lose with this card: always withdraw in local currency.
• It’s a debit card, not a credit card. No points on spend, thinner protections, and a fraud dispute is slower. Use it for cash, and put purchases on a credit card with no foreign transaction fee.
• Schwab reserves the right to end the rebate. They’ve said that in the fine print for well over a decade and the rebate is still here, so I’m not losing sleep over it, but it’s worth saying out loud that a perk this generous exists at the bank’s pleasure.
• No cash deposits, and no foreign incoming wires. You fund it by transfer, direct deposit or mobile check deposit. If you need to walk cash into a branch, this isn’t your primary bank.
• It takes a couple of weeks to set up. The card ships 3 to 7 business days after you fund the account, and checks a week or so after that, so open it well before the trip, not the week of.

Alternatives

A few other accounts refund ATM fees, and if you already have one of them you may not need Schwab. I recommend Schwab because I use it personally and can vouch for how well it works, and many other frequent travelers landed on the same card for the same reason, but here’s how the competition stacks up, checked against each company’s own site.

• Fidelity Cash Management Account is the closest thing to a tie. Fidelity reimburses all ATM fees worldwide, credits them the same day instead of at month-end, charges no foreign transaction fee, and parks your cash in a money market fund by default, so it pays real interest where Schwab’s checking account doesn’t. The differences are that it’s a brokerage account rather than a bank account (your cash is swept to partner banks for FDIC coverage) and the debit card is issued by a partner bank, not Fidelity. If you’re already a Fidelity customer, this is the one to open; if you’re starting from scratch, either works, and I went with Schwab because it’s the one I’ve tested in dozens of countries.
• Capital One 360 Checking charges no foreign transaction fee and no Capital One fee at out-of-network ATMs, which gets you most of the way there, but it does not refund the fee the ATM owner charges, and abroad that’s the fee that stings. Good as a primary bank, not as a travel cash card.
• Most online banks refund ATM fees up to a monthly cap and usually only inside the US. Fine for the occasional bar ATM, not for a month in Southeast Asia.

Schwab Debit Card Questions I Get Asked

Bottom Line

If you travel abroad at all, open the Schwab checking account now rather than the week before your trip, because the card takes a week or two to arrive and you’ll want to have tested it at a local ATM first. If you never leave the country, open it anyway as a second checking account, keep a little in it, and enjoy never reading an ATM fee screen again.

Schwab isn’t paying me, there’s no referral link, and I’d write the same post if there were. It’s the only card I own that I’ve never once wished was something else, and I say that as someone with a drawer full of credit cards.