Euro Conversion Questions

Hello!

 

So I have been round and round with researching this so I finally decided I would just ask for opinions.

 

Consensus seems to be that the best exchange rate is had when you use your American bank debit card in a European ATM once you arrive there. I'm wondering just HOW much better it really is. Because after doing the legwork with each of my 2 banks, I'm going to get socked with a fee each time I use the ATM along with any fees the foreign ATM charges. One of my banks charges $5 per withdrawal PLUS a 3% fee of the amount taken out. The other bank charges $3 with no percentage.

 

Currently to convert dollars to Euros in advance at either of my banks, the exchange rate is $1.42 equals 1 Euro. So my question is, is the exchange rate SO much better on withdrawing when I get there that it will make up for those fees I'm going to get charged?

 

Has anyone gone there (Rome, Barcelona, Cannes) in the past 30 days and could report what the exchange rate that they received?

 

Thanks so much for any help and advice!

it all depends on your bank.

Some people will open a credit card or new bank account solely for travelling abroad. I think Capital One is a name I've seen a lot on this forum because of low or no fees.

I bank with a credit union. On my last trip they charged me $2 for using an ATM, and their exchange rate was on par with current rates. I would withdraw $200 or so, every few days so $12 in bank fees was hardly worth thinking about. And I sure didn't want to bring a wad of cash with me from the US.

You've done some pretty good research so far. You need to take it a bit further and find a financial institution that does not charge exchange fees and reimburses for ATM fees, if any.

 

To answer your questions about exchange rates, I purchased train tickets on the DB Bahn online a couple of days ago and charged them on my no-fee credit card (Chase Hyatt) and the rate of exchange was 1.36%

 

If your bank charges you 1.42%, to obtain €500 it will cost you $710US. At $5 per withdrawal PLUS a 3% fee, your cost would be $705.40US. At an exchange rate of 1.36%, no fees, it would cost you only $680US.

 

Lew

The exchange rate in June in Italy was 1.36. We find using ATMs in Europe saves us about 5-6%, when you consider all the fees possible exchanging here in the States.

 

European ATMs don't charge fees. Only your home bank does.

 

European ATMs are the best way to go.

I think the OP has the right idea in making inquiries at his/her bank. Because we travel internationally on a very frequent basis, we long ago stopped doing business with any bank that charged fees for using their ATM card out of the USA. In many cases this means dumping larger commercial banks in favor of either small local banks or Credit Unions.

 

As to the OPs bank selling Euros for $1.42, this is really not a bad rate (especially in the USA) since its only about a 5 % premium. As a comparison, when we use our fee free ATM cards we only pay 1% (the normal transaction fee built into the exchange rate). Unless you are planning on getting many thousands of dollars in Euros, the difference in rates is not going to amount to "real money." But if one spends a lot of time in Europe and spends $10,000+ (not a lot of money for a long trip) then we are talking hundreds of dollars.

 

You might also consider that some credit cards (such as the CapitalOne Master Card or the Andrews Federal Credit Union Global Trek Visa) do not charge any (and this means zero) foreign transaction fees. Many other credit cards charge anywhere from 2.5% to about 3.5 % on every transaction. AMEX, even though they charge a hefty annual fee for their cards charges 2.7% unless you spend $450 a year to get their Platinum card.

 

And we add this very important WARNING. Before you leave home on your trip make sure you notify your ATM issuing bank about your trip (and itinerary) and know your 4 digit PIN in numbers. If your PIN must be more then 4 digits you may have a problem in some Euro ATMs. And also notify all your credit card companies of your trip and itinerary. Failure to give notice can result in having your card(s) cut-off if the issuer thinks there is a security issue due to your change in usage patterns.

 

Hank

Edited July 18, 2014 by Hlitner

You've done some pretty good research so far. You need to take it a bit further and find a financial institution that does not charge exchange fees and reimburses for ATM fees, if any.

 

To answer your questions about exchange rates, I purchased train tickets on the DB Bahn online a couple of days ago and charged them on my no-fee credit card (Chase Hyatt) and the rate of exchange was 1.36%

 

If your bank charges you 1.42%, to obtain €500 it will cost you $710US. At $5 per withdrawal PLUS a 3% fee, your cost would be $705.40US. At an exchange rate of 1.36%, no fees, it would cost you only $680US.

 

Lew

 

Kudos to Lew.

 

This is one of the best and clearest explanations I've seen.

As mentioned you could look for an ATM provider who does not charge a fee.

 

After doing conversions over the years as we travel frequently I have come to the following conclusions.

 

-Use credit card where possible and one that does not charge a foreign transaction free.

-If you are not going to need a lot of cash don't sweat it. If we don't need a lot often we are now getting foreign currency at our local bank and I have been getting it for just a few percentage points higher than if I used the ATM in country. So, if I needed $500.00 in Euoros it might have cost me $21.00 in USA dollars by doing it this way. This is why I don't sweat it.

-When time permits then I will get some money in country with my ATM.

 

As Hank mentioned if you use your ATM card notify your bank ahead of time where you are traveling. Have more than one ATM card should something go wrong.

 

Likewise, provide your credit card companies with your travel information as well.

 

Keith

I exchange $1000 euro from BOA, it costs $1438. , the problem I have is there are a daily ATM withdraw limit and it adds on fee each time if I withdraw money. My B&B hotel offers 15% cash discount and it is about 90 Euro savings, so it works out better for me to have cash on hand before travel, the rest I will try to use credit card with no exchange fee.

 

I exchange $1000 euro from BOA, it costs $1438. , the problem I have is there are a daily ATM withdraw limit and it adds on fee each time if I withdraw money. My B&B hotel offers 15% cash discount and it is about 90 Euro savings, so it works out better for me to have cash on hand before travel, the rest I will try to use credit card with no exchange fee.

First, I hope you really meant to write that you're going to use a debit card for ATM withdrawals. Obtaining cash from an ATM with a credit card can be costly as it will be treated as a cash advance, accruing interest at a very high rate.

 

Obtaining €1,000 at a cost of $1,438US from BOA is costing you $78US more than it should when using a no-fee debit card at an ATM in Europe. $1,438US - $1,360US = $78US. Your B&B booking is likely being held with a credit card number on file. Do you need to plunk down the cash when you checkin or can you pay at checkout? If it's the latter, you can obtain euros on the day you arrive in Europe and each day you're there so you'll have enough cash when you checkout. If my computations are correct, you'll need €510 in cash ($694US at 1.36% exchange). You should be able to withdraw that amount in a couple of days.

 

Lew

First, I hope you really meant to write that you're going to use a debit card for ATM withdrawals. Obtaining cash from an ATM with a credit card can be costly as it will be treated as a cash advance, accruing interest at a very high rate.

 

Obtaining €1,000 at a cost of $1,438US from BOA is costing you $78US more than it should when using a no-fee debit card at an ATM in Europe. $1,438US - $1,360US = $78US. Your B&B booking is likely being held with a credit card number on file. Do you need to plunk down the cash when you checkin or can you pay at checkout? If it's the latter, you can obtain euros on the day you arrive in Europe and each day you're there so you'll have enough cash when you checkout. If my computations are correct, you'll need €510 in cash ($694US at 1.36% exchange). You should be able to withdraw that amount in a couple of days.

 

Lew

 

We are worried about an extra $78 expense when we are spending thousands of dollars to go to Europe. This, to me, does not compute.

 

We are worried about an extra $78 expense when we are spending thousands of dollars to go to Europe. This, to me, does not compute.

The topic of this thread is exchanging US dollars for euros efficiently. puffy posted that he/she would rather obtain euros in advance to take advantage of a €90 discount for paying for accommodations in cash. My point is that by overpaying for BOA's services, the saving is much less than €90!

 

The cost of our next European adventure will approach $20,000, but if I can save $78 by not overpaying, I'll do it!

 

Lew

We are worried about an extra $78 expense when we are spending thousands of dollars to go to Europe. This, to me, does not compute.

 

If one has unlimited funds, then great. I congratulate you. On the other hand, many of us don't.

 

I like to try to travel 3-4 times a year overseas. Because I am pretty thrifty most of the time, I can squeeze in 4 trips on what most would budget for 3. To me, it's worth it. Others would rather spend a lot more and only take 2 trips. To each his/her own.

 

Also, I understand everyone's got "things" that they don't mind paying for. Private transportation seems to be a big "thing" for most Americans. Not sure if it is because they are unable to walk, or unfamiliar with taking public transportation, or uncomfortable with trying to communicate with others in a foreign country.

 

I like to splurge on a nice hotel every now and then. And the occasional really good meal (especially in Italy). However, I get around on my own mostly, I don't shop much, and sometimes I stay in very modest hotels. I book inside cabins. I use FF miles for air when I can. I get my euros in the most cost-efficient way possible.

 

....anything to keep traveling as much as I am able. :D

Many banks and credit card companies build the foreign exchange fee into the exchange rate. So just because you don't see a fee, doesn't mean that it doesn't exist. Check the fine print for the card you'll be using. Not all cards are the same. As well, some banks will charge non clients a fee for using their ATMs.

 

Regardless of what option you decide, my advice is to take multiple forms of payment (debit card, credit card and a small amount of cash if possible). My preference is to at least have enough cash for transportation costs to my hotel.

The exchange rate in June in Italy was 1.36. We find using ATMs in Europe saves us about 5-6%, when you consider all the fees possible exchanging here in the States.

 

European ATMs don't charge fees. Only your home bank does.

 

European ATMs are the best way to go.

 

+1

 

I use Wells Fargo and I got the current exchange rate in all of the countries where I withdrew cash. I was only charged $5.00 per transaction.

 

That is it. That is all. No hidden fees. Nothing extra above the $5.00.

 

I do not understand this aversion to using an ATM in Europe. It's irrational.

And CruiserBruce is correct.

 

This is why if I don't need a lot of money or i can't get to the ATM for awhile I just pay the extra and get some money before we travel at our local bank. In the scheme of things it's not a lot of money unless one needs a lot of money.

 

Keith

My post may be mislead, I intend to use credit card for all my purchase but not cash advance. I do also have a well fargo bank card and did not know there are no additional fee like BOA. Lesson learn and thank all members advice.

We just opened a checking account with capital one. They don't charge any fees to withdraw from any ATM, foreign or domestic. We will use this for our trip to withdraw cash.

 

 

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First, I hope you really meant to write that you're going to use a debit card for ATM withdrawals. Obtaining cash from an ATM with a credit card can be costly as it will be treated as a cash advance, accruing interest at a very high rate.

 

Lew

 

It's not as simple as that! I have a sterling credit card which make no charge for ATM withdrawals, whatever the currency, and applies no currency conversion charge on cash or purchases.

 

It charges around 1.2% per month on cash advances. I'll be away for less than 2 weeks, and clear the CC balance on my return, so the 0.6% interest charge is far far less than the typical 2.5-3.0% currency conversion charge which my debit card issuer applies.

 

Stuart

 

It's not as simple as that! I have a sterling credit card which make no charge for ATM withdrawals, whatever the currency, and applies no currency conversion charge on cash or purchases.

 

It charges around 1.2% per month on cash advances. I'll be away for less than 2 weeks, and clear the CC balance on my return, so the 0.6% interest charge is far far less than the typical 2.5-3.0% currency conversion charge which my debit card issuer applies.

The annual rate of interest for cash advances on your credit card is 14.4%. While high, it doesn't approach the rate of 20%+ imposed by some US financial institutions.

 

You're aware of the financial penalty of using a credit card for obtaining a cash advance...some are not. Personally, I'm more comfortable using a no-fee debit card.

 

Incidentally, some US financial institutions used to allow cardholders to carry a positive cash balance in their credit card account. This cash balance would immediately cover any cash advances, eliminating interest charges.

 

Lew

Even 25% APR over two weeks is 1%, which is less than most conversion charges, as long as there's no cash withdrawal fee.

 

Stuart

 

I have a sterling credit card which make no charge for ATM withdrawals, whatever the currency, and applies no currency conversion charge on cash or purchases.

If, by sterling credit card, you're referring to credit cards issued by Sterling Bank, there are additional fees:

 

 

Here are two links to Cardmember Agreements depending on the type of card:

 

 

There really is no free lunch...

 

Lew

I'm in agreement with the poster that said after spending thousands to go on the trip, I'm not going to worry about $50-100 in fees for conversion of cash.

 

Just a little story. I used a local ATM on a Friday night (after hours) to obtain funds from my checking account. The machine decided to hold my card and give me no money. I had to wait until the Credit Union opened on Monday morning to retrieve my card and get any cash. This was within 10 miles of my home. Can only imagine being in a Port in Europe and have the machine decide to do this.

 

My debit card tied to my checking/savings account does not even go with me on my travels. I usually get some EURO before leaving home, and I do take extra US $$ and exchange once I arrive in Europe when needed.

 

My first trip was to England in 1987. I obtained traveler's checks from my credit union at no charge. By the time the trip was over, I had paid approximately $50 for conversion of those traveler's checks. On subsequent trips to Europe I tried to outwit the banks buying currency for whatever countries I would be in. Again paying approximately $50 in charges for that exchange. I'm now close to 70 and want whatever is most convenient, not necessarily the most cost effective. On my last Med cruise I purchased $50 in EURO and took $2000 in US $ with me, then converted it as needed in Rome, Athens and Corfu at local banks as we passed them.

 

 

There is no way to beat the conversion charge and the interest charge, the banks will win every time. It is just part of the cost of traveling in my book.

There is no way to beat the conversion charge and the interest charge, the banks will win every time.

 

But that simply is not the case, as dozens of posts in numerous threads continually point out.

 

We have a Capitol One MasterCard credit card and our checking account is with PNC Bank, our local bank, from which we have our ATM cards. We never pay either conversion charges or interest charges for our foreign transactions.

Edited July 20, 2014 by CintiPam

I agree thing happen and you don't know what it will be , I always hope for the best and prepare for the worst, it is just me. I want to be less stressful in the trip and not worry about small thing. I am not rich but pay little extra euro won't broke me since I am not exchange in thousands :):):D:D

We have no issues with interest or conversion charges. When using out Fee Free ATM charges we get the official exchange rate minus 1% with no other fees of any kind. If we use our CapitalOne or Andrews credit cards we pay zero fees with no interest charges. We do not "beat the banks" but simply use credit unions that do not charge fees.

 

Hank

 

 

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