The Money-Wasting ATM Mistake Too Many Tourists Make On A Trip To Europe

[WinniWoman]

Not for me it isn't. Your mileage may vary. You can always just call the number on the back of the card and ask.

I won't have an ATM card at all. They're nothing but trouble. But considering how easy it is to use a sniffer to get the card and pin number, I would NEVER use one outside the country. By the time you learn there's a problem, it's probably too late to do anything about it. The fact that you have to prove you didn't make the purchases with an ATM is problematic even if your native language in your native country.

I know too many people who have had their accounts siphoned because of ATM fraud to ever have one. If a pickpocket gets me, that's what, a few hundred Euros, tops? ATM fraud, depending on the bank account is basically "keys to the kingdom" -- or at least the keys to the treasury.

I don’t use my ATM card. I’m talking credit cards.

 

[ScoopKona]

I don’t use my ATM card. I’m talking credit cards.

It's a good idea to keep a weather eye on your card activity. Particularly just after you return. Usually it takes awhile for the bogus charges to show up -- you want to be johnny-on-the-spot if any bogus charges appear.

 

[Talent312]

Oh I know which cards don’t have foreign transaction fees already. But isn’t charging in local currency a different issue?

Yes. Apples and oranges.
DCC concerns exchange rates, not foreign transaction fees.
Just don't let the merchant process the charge in USD.
Once, when I was tired, I let a hotel clerk do it... Bad move.
.

 

[StaceyM]

So let me understand: then always make sure the credit card is charged in local currency, correct?

Yes. If your credit card has a 2-3% foreign transaction fee, the DCC rate may be advantageous. But otherwise, always choose/insist on the local currency.

The only exception I'm aware of is countries where there are two exchange rates, an official bank rate and a gray market rate. In that case, you can get hosed using official exchange rates; the local business will give you a favorable rate if you charge/pay in dollars. (for example, dolar blue rates in Argentina)

Depends. My card has zero foreign transaction fees. I get whatever the bank rate is for whatever I charge. It doesn't matter how it goes through because the credit card bill is going to be the same either way. (I quite like that, seeing how much time we spend outside the US.)

Even then, you can get 1-2% different exchange rates depending on whether you use Mastercard or Visa (Visa averages around 0.5% more) or weekday/weekend rates. (credit cards transactions that post on weekend days can be significantly different than interbank rates) Usually it's not worth paying attention to unless you are doing $1000+ transactions, but to assert that you get "the bank rate" when using a credit card is incorrect.

 

[Carolinian]

So let me understand: then always make sure the credit card is charged in local currency, correct?

That is correct. If they charge it in dollars, it will stay at whatever rate they convert it at and DCC is always at a bad rate.

Sometimes this is presented when you complain, as saving you the foreign transaction fee, but if your card has that fee it is still charged regardless of what currency the transaction is in. Most of us are smart enough to carry cards without a foreign transaction fee, like most credit union cards or CapOne, in the first place.

 

[StaceyM]

but if your card has that fee it is still charged regardless of what currency the transaction is in

I thought it was only for non-USD transactions, but a quick google search shows "in foreign currency or passing through a foreign bank" (lending tree.com)

The card we use most often during foreign travel is a Chase card, and Chase says "A foreign transaction fee is a charge assessed by your credit card issuer on transactions made in any currency other than U.S. dollars (USD)."

Amex says "Depending on the type of product you have, you may be charged foreign transaction fees to convert your international transactions into US currency."

So I guess it varies from bank-to-bank? Or Chase/Amex is being misleading... It sounds like a class action lawsuit waiting to happen if credit card issuers are saying "foreign currency" in marketing materials but charging for USD processed through any foreign bank.

In either case, it is simple to avoid by using a card that doesn't charge the fee.

 

[Carolinian]

I don’t use my ATM card. I’m talking credit cards.

An ATM card will often get you the best exchange rate for the cash you need.

Since the euro came in, exchange rate differentials and commissions (you will often be charged both) at exchange offices in western Europe have gotten steeper. Your best exchange rate is usually at an ATM using a debit card. I keep a debit card on an account with limited funds, just in case of a problem, but I also use only ATM's that are attached to banks and during banking hours. In eastern Europe, there are still usually exchange booths with good rates and no commission, so that is what I use. Of course, those exchange booths usually also sell currencies of places I am going at good rates, so often when I was working full time in eastern Europe, I would have all the local currency I needed for the place I was going. I remember one time I was doing a vacation trip to Cyprus, and bought Cyprus pounds (unfortunately that currency is now replaced by the euro) ahead of time at an exchange booth in Sofia, Bulgaria for a lot better rate than I could have gotten them in Cyprus itself.

 

[WinniWoman]

An ATM card will often get you the best exchange rate for the cash you need.

Since the euro came in, exchange rate differentials and commissions (you will often be charged both) at exchange offices in western Europe have gotten steeper. Your best exchange rate is usually at an ATM using a debit card. I keep a debit card on an account with limited funds, just in case of a problem, but I also use only ATM's that are attached to banks and during banking hours. In eastern Europe, there are still usually exchange booths with good rates and no commission, so that is what I use. Of course, those exchange booths usually also sell currencies of places I am going at good rates, so often when I was working full time in eastern Europe, I would have all the local currency I needed for the place I was going. I remember one time I was doing a vacation trip to Cyprus, and bought Cyprus pounds (unfortunately that currency is now replaced by the euro) ahead of time at an exchange booth in Sofia, Bulgaria for a lot better rate than I could have gotten them in Cyprus itself.

I don’t have a debit card, only an ATM card. I hope to take enough Euros from here from our bank with us.

 

[Talent312]

Whatever you do, do not use a CC at an ATM.
You will pay a cash-advance fee and interest from day 1.
.

 

[WinniWoman]

Whatever you do, do not use a CC at an ATM.
You will pay a cash-advance fee and interest from day 1.
.

This I do know. Thank you.

 

[Carolinian]

I don’t have a debit card, only an ATM card. I hope to take enough Euros from here from our bank with us.

Check the exchange rate. Most banks in the US give an awful rate, as do exchange booths at most airports (one of the terminals in Zurich is an exception) and train stations. For countries in the eurozone, ATM's usually offer the best rate, but NOT when using credit cards. I remember the old days, when American Express travellers checks in German marks, French francs, British pounds, or Dutch guilder used to offer really good rates when you bought them in the US, but in some countries, nobody took them except the local AmEx office. Travellers checks have been passe for some time, of course.

When I was working full time in Europe, I could do a three currency transaction, dollars to lei to euros for less than a 2% exchange loss, and I simply held on to any leftover currencies as I would likely have need of them again. Exchange booths in countries using the euro, however, stick it to you on exchange fees. The best rates of all were at the ATMs.

Sometimes fast food chains will take dollars and give you change in local currency at a good rate, but this varies as to whether they will take dollars. I remember when Luxembourg had its own franc and the handful of exchange booths charged enormous fees. The workaround to get spending cash was to walk into McDonalds and buy a coffee or a coke and hand them a US 50 or 100. You would get change back in Luxembourg francs at a much better rate than the exchange booths.