Purchasing Euros

[HMSDingy]

You are wise to look investigate the purchase of euros in advance. I have seen euros marked up by anywhere from zero to 22%. Compare any quotes you receive to those shown at https://finance.yahoo.com/currency-converter/

 

Personally, I make foreign purchases with a Capital One credit card, which has 0% markup, and I withdraw euro from foreign ATM's for a 1% markup and no withdrawal fees. These rates I looked up years ago probably still hold true for US residents:

0% to 3% for credit card purchases made abroad*

0% to 3% plus $0 to $5 for ATM withdrawals made abroad*

5.5% for foreign currency purchases made at a Wells Fargo branch

13% and up at a US airport Travelex outlet. Poor exchange rate, then their $9.99 fee kills you on small purchases.

Charging foreign currency on my credit card would cost an immediate 3% with interest of 20% starting immediately*

 

*Rates are set by the card issuer.

 

By a 1% mark up do you mean the exchange rate is 1.1%? Same question for purchasing foreign currencies with Capital One. 0%?

[Fouremco]

By a 1% mark up do you mean the exchange rate is 1.1%? Same question for purchasing foreign currencies with Capital One. 0%?

Pretty sure that he means that the foreign transaction fee is 0%, but he still pays the going currency exchange rate. Many financial institution, especially in Canada, charge quite a hefty conversion fee, with only a very small number of cards offering 0%. Currently, I believe that the Home Trust Preferred Visa Card is the only Canadian card with a 0% fee.

[doublebzz]

Another important factor to remember is when using a no foreign transaction fee U.S. credit card in foreign countries, always ask to be charged in the local currency to avoid any fees in the currency exchange. If you charge in U.S. dollars, then the foreign bank will perform the exchange sometimes at a very hefty fee. I don't know whether the same policy exists for Canadian dollars. There is a tendency among foreign merchants to charge in U.S. dollars when they see a U.S. credit card so you should ask to be charged in local currency before the transaction processes.

[Fouremco]

Another important factor to remember is when using a no foreign transaction fee U.S. credit card in foreign countries, always ask to be charged in the local currency to avoid any fees in the currency exchange. If you charge in U.S. dollars, then the foreign bank will perform the exchange sometimes at a very hefty fee. I don't know whether the same policy exists for Canadian dollars. There is a tendency among foreign merchants to charge in U.S. dollars when they see a U.S. credit card so you should ask to be charged in local currency before the transaction processes.

The same applies to Canadian cards, or I guess I should say card, singular, since the demise of the Chase Amazon card and Roger's decision to start charging a transaction fee. Recently in St. Kitts, a restaurant owner wanted to charge my card in USD. I explained that his exchange rate from Eastern Caribbean Dollar (EC) to USD wasn't particularly favourable, and that as a Canadian, I'd be faced with an additional USD-CAD conversion. He understood (I think) and agreed to charge me in EC, meaning a single conversion in Canada at the official Visa rate.

[daisy-mae]

The same applies to Canadian cards, or I guess I should say card, singular, since the demise of the Chase Amazon card and Roger's decision to start charging a transaction fee.

 

So how long before Home Trust decides to follow suit?...

It's getting more and more difficult to beat the big banks at their own game.

[Fouremco]

So how long before Home Trust decides to follow suit?...

It's getting more and more difficult to beat the big banks at their own game.

Excellent question, and I keep my fingers crossed. I know that there was a huge switch over to Home Trust when Chase shut down the Amazon card, so it was a definite plus for them, but for how long? I haven't been able to dig up any figures for Rogers, but I suspect that a lot of people, like me, won't bother with the card anymore; the lack of a transaction fee was really the only benefit for many.

[whogo]

By a 1% mark up do you mean the exchange rate is 1.1%? Same question for purchasing foreign currencies with Capital One. 0%?

Say the current interbank rate is $1.1645/€. My credit card would convert my euro purchases at that rate. Euros would cost me 1% more with my debit card, or about $1.176145/€.

[Hlitner]

By a 1% mark up do you mean the exchange rate is 1.1%? Same question for purchasing foreign currencies with Capital One. 0%?

 

CapitalOne has long had a great reputation with frequent foreign travelers. Their card is free and has zero foreign exchange fees. We have compared the actual CapitalOne exchange rate to our best ATM cards (which also have zero fees) and Capital One is about the same or even a little better. When you use any ATM/Debit card in a foreign ATM machine (one should stick to bank owned ATMs) you will get the current wholesale rate of exchange (the rate used by banks) plus a 1% International Processing fee (built into the exchange rate) which is generally assessed by Visa International who is the electronic broker for a majority of ATM transactions. When you buy currency at banks or cambios you will likely pay anywhere from 3 - 20%....which might be in the form of commissions, lousy rates, or a combination of both. That is why one should be aware of the current exchange rate and act accordingly. There are lots of places where you can find the current exchange rates but we think that xe.com is one of the best.

 

For many cruisers, the exchange rates and/or fees are not a big deal. Many cruisers use very little local currency since they tend to purchase cruise line excursions and often use credit cards for local purchases. If you only need a few hundred dollars worth of currency it is hardly worthwhile to be looking around for the best deal. Where all this exchange stuff really matters is for those of us who do a lot of independent travel in foreign lands. Paying an extra 3% on $1000 will only cost you $30. But if one is spending $10,000 then we are starting to talk about some real money :).

Hank

[HMSDingy]

CapitalOne has long had a great reputation with frequent foreign travelers. Their card is free and has zero foreign exchange fees. We have compared the actual CapitalOne exchange rate to our best ATM cards (which also have zero fees) and Capital One is about the same or even a little better. When you use any ATM/Debit card in a foreign ATM machine (one should stick to bank owned ATMs) you will get the current wholesale rate of exchange (the rate used by banks) plus a 1% International Processing fee (built into the exchange rate) which is generally assessed by Visa International who is the electronic broker for a majority of ATM transactions. When you buy currency at banks or cambios you will likely pay anywhere from 3 - 20%....which might be in the form of commissions, lousy rates, or a combination of both. That is why one should be aware of the current exchange rate and act accordingly. There are lots of places where you can find the current exchange rates but we think that xe.com is one of the best.

 

For many cruisers, the exchange rates and/or fees are not a big deal. Many cruisers use very little local currency since they tend to purchase cruise line excursions and often use credit cards for local purchases. If you only need a few hundred dollars worth of currency it is hardly worthwhile to be looking around for the best deal. Where all this exchange stuff really matters is for those of us who do a lot of independent travel in foreign lands. Paying an extra 3% on $1000 will only cost you $30. But if one is spending $10,000 then we are starting to talk about some real money :).

Hank

 

Thanks for the clear explanation Hank, if I may be so informal. Although Canadian, I rarely purchase US $ for our cruises as I have both a US credit card and US bank account. But for our upcoming cruise, we will be staying in Italy for a week post cruise and I will like to have cash in hand, not $10,000 mind you.:D:D:(:D:D

[drowelf]

So how long before Home Trust decides to follow suit?...

It's getting more and more difficult to beat the big banks at their own game.

 

I don't even try anymore. I know what, if any transaction fees my various CC providers are going to hit me with. I just figure that into the cost of the purchase. Unless you spending thousands of dollars purchasing something, we are not really talking about a lot of money.