Are ATMs really the best way to get Euros (paper)?

Wait until you arrive in Europe to get your euros from a regular bank ATM. You will get the international exchange rate when you use a bank ATM. That’s the best exchange rate available. U.S. banks are going to make an additional profit for providing you with foreign currency if you get the euros in the U.S.

And when you pay for anything while in Europe, always pay in euros or you will get clipped again if you pay in U.S. dollars.

Thanks Kenko,

“You will get the international exchange rate when you use a bank ATM.“

I am finding that banks are playing very loose with their definition of exchange rate and incorporating charges (I guess they can’t use the word fee) to give me different rates.

I’m wondering if anyone in the world of currency trading has investigated whether the banks are using “enhanced” exchange rates being used for ATM transactions to make up for not having to say they are charging fees?

For example: if today's exchange rate is 1 USD to 0.8588 EUR, could I really go to an ATM and take out Euros at that rate? My gut feeling is no, and that instead the exchange rate for both ends of that transaction will be different and the banks will make money on the exchange, and not just because of different rates on difference settlement dates.

The European banks will use the international exchange rate. Occasionally the ATM will advise you there is a nominal fee of something like $3 to use their machine. This fee is refunded when I use my credit union ATM card and often investment bank credit cards such as Vanguard, Fidelity etc. will refund the stated fee to you.

You have to check with your bank to know exactly what their policy is.

Using a debit card to withdraw Euros rather than a credit card is also a good move because banks will charge the withdrawal done with a credit card as a cash advance and interest begins on the day you make the withdrawal. Using your bank debit card avoids this.

Personally, I never get euros in advance but wait until I am in Europe before getting them. I’ve always withdrawn Euros on the second day after arrival from a local bank that Italians bank at. Of course, you won’t know what any particular bank’s specific charges are until you do a test run at their ATM. You can proceed with the transaction or cancel it and try a different ATM.

I just returned from Milan a week ago and brought home €120 to have pocket cash at the beginning of my next trip.

This Rick Steves’ site explains a lot of this if you look up “Tips on Using ATM’s in Europe.”

You're never going to get the published bank exchange rate because you're not a bank (and TBH, most banks probably aren't getting that rate either). Financial institutions are not in the business of working for free, so you're going to pay for their services ("hidden" or not).

Unless you're in need of thousands of Euros, the difference in exchange rates for various options is pretty nominal compared to the overall cost of a trip. Among the reasons I use an ATM in Europe is so that I am not carrying around a lot of cash at one time (and risk having excess to bring home). I've also purchased currency before a trip to save the trouble of seeking out an ATM that will take my card. Either option was worth the cost, to me. YMMV.

Thanks Kenko and CL,

"You have to check with your bank to know exactly what their policy is."

That's what got me started :) I called the bank and they said they don't have a fee, they just have "their" exchange rate... which wasn't close to todays rate.

"Unless you're in need of thousands of Euros, the difference in exchange rates for various options is pretty nominal compared to the overall cost of a trip. Among the reasons I use an ATM in Europe is so that I am not carrying around a lot of cash at one time (and risk having excess to bring home). I've also purchased currency before a trip to save the trouble of seeking out an ATM that will take my card. Either option was worth the cost, to me. YMMV."

Good safe advice, and where I think I'm landing. It's not a lot of money and either is a fine way to go. The benefit of getting it now is that I know exactly what the cost is going to be, and we can spend less time at an ATM and more time wandering around the streets of Sicily.

thanks again

A couple more tips: Using ApplePay works about 95% of the time. That avoids having to carry cash as do credit cards. There is a company called “Euronet” that has an extremely high number of ATM’s in areas tourists are concentrated. Euronet ATM’s are to be avoided at all costs because they have usurious rates that are shocking. I checked on how bad it is and in one town they were charging a fee of 15% on top of other fees in the overall withdrawal!

That is predatory and you don’t want to be Euronet’s prey!

Have a great trip!

I wonder if you are confusing the Interbank rate (the exchange rate between banks- which you as an individual cannot get) and the ATM rate which is the rate for customers. Of course the latter will be different than the former. But if you have an ATM account that doesnt charge fees, and/or refunds fees charged at the other end, that will be the best you can get. If you get foreign cash from your own bank at home, they may use a different rate and/or charge a fee for that service. And the usual advice is to use an ATM at an actual bank, or iwned by a bank, and not a commercial ATM like Euronet

Hi Jean

The rates that I quoted above was the current forex rate (1 USD to 0.8588 EUR). The other rate of 1 USD to 0.795 was a quoted rate to purchase within the states, they just mentioned it was "their" rate?

I don't know what the "the ATM rate which is the rate for customers" is. Is this a currency exchange rate that the bank "makes up" and may include other markup costs?

If banks are saying they don't charge fees on foreign ATM withdrawals, but they aren't matching the forex rate, it's a fee. And, I fully understand that banks are in the business of making money. But, the idea that seems to be prevalent is that using a Debit card at an ATM to get cash avoids foreign transactions fees and costs, may not be accurate.

The rate you see on Google is the interbank rate. You won't get that anywhere. Be assured, the rate you'll get from an ATM when you're there will be better than what you'll get if you change your money at home. The difference between the interbank rate and what you pay is (mainly) profit for the bank.

"the idea that seems to be prevalent is that using a Debit card at an ATM to get cash avoids foreign transactions fees and cost"

It's the cheapest way of getting cash when overseas. We all know we don't get the interbank rate. Personally i pay by card as much as possible - current rate on xe.com is 1USD = 0.8620 EUR, and my bank is offering 86.09 for electronic transactions.

I posted this roughly 40 minutes ago, pretty amazing all the great responses and wisdom.

much appreciated!

CL and Simon nailed it. Some of the other comments and advice is too heavy on generalization and hyperbole which is a bummer on holiday. ;-)

My theory is that cash purchases might make up 2% to 5% of your trip, and if you believe you paid 5% too much on the exchange, then add 0.1% to 0. 25% more to your trip cost. Is that worth worrying about? Go enjoy your time instead.

I have an ATM that reimburses fees. It's what I use. But if yours doesnt, some of the time, the high fees are fixed fees, which means the more cash you get, the better the deal.

"Use a bank ATM" bad generalization. My bank in Europe will charge you about the same fee as Euronet will on a $20 equivelent transaction. You, not me, cause I have an account. But its a fixed fee so on $200 its not too bad. So not all banks are cheap ATMs.

When I am in the US if I get euros from BoA I get within 1% of the rate my credit card gets. But thats because I am a preferred customer so another generalization with issues.

I just spent a few days in small town SW Germany and forget going out to a restaurant unless you have cash. Everyone we went to was cash only. Breakfast, lunch, dinner. We were at the table counting coins to determine what we could have for lunch. The nearest ATM was 10 min away by car. No, "Europe" hasn't gone away from cash.

I have a debit card from Fidelity that reimburses any ATM fees charged worldwide, so I really don't care if the exchange rate is a little worse at the ATM-I'll pay for the convenience.

First, exchanging money is different than using an ATM. You are certainly right to question what is going on, but individual banks really do not "set" or determine the exchange rate for an ATM transaction, like they do for a currency exchange.

When you go to an ATM in Europe, and seek to withdraw cash, the first concern is if the ATM owner charges a fee, maybe they charge nothing, maybe it is anywhere from 3 to 7 euros. You ask for 100 euros, you get 100 euros, if you are charged a 3 euro fee, 103 euros is forwarded to the network as the transaction amount. Likely one of 2 or 3 major networks will process the transaction and convert from euros into Dollars. They do millions of dollars of transactions and get great rates, typically you can expect that to be about 1% over the interbank rate you see published, but that rate fluctuates by the second, so you could be better or worse than the 1%. That Dollar amount then goes to your bank. They can then charge you fees, the two most common are an "Out of Network" fee, usually a set amount per transaction, which a random ATM in Europe likely is out of network, and/or a Foreign Transaction Fee of a few percent.. Many banks charge no fees. Any fees they charge should be disclosed and they really can't fudge with a conversion rate.

None of the ATM cards I have charge fees, one actually reimburses me for fees ATMs charge.

Be warned though, ATMs know that you bank in Dollars, so they might nicely offer to do the transaction in Dollars, so you know exactly what the exchange rate is. Don't do it, they are taking you from an ATM transaction to an exchange transaction, and they set the exchange rate. This is called DCC (Dynamic Currency Conversion) and the rates are always worse than what the network will give you, ranging from 2% on up, 8 or 9% is common. You also encounter DCC when using a credit card. Always choose to do the transaction in local currency (euros) and decline any offer of conversion.

I compare the international exchange rate with the rate offered by Bank of America. I have all the receipts where I noted what BofA charged and the international rate, telling me what can be reasonably expected, it's a difference of .6. If the int. rate in $l.06, then I can expect BofA to charge me $1.12, no fee for the transaction as long I withdraw one thousand dollars (the minimum) from my checking account. For example, on 24 Dec 2024 the int. rate stood at $1.03 (almost parity, it's not going to get batter than that, so no use waiting), BofA charge me a rate of $1.09 (fair enough), when I decided to take an additional $1, 552 from my account to bring over in Euro.

With the present rate of $1.17 to the Euro, it's bad and I don't expect it to go back to a more desirable rate, say, $1.12 or lower. The $ starting sliding once the tariffs were announced, the sliding stopped at $1.17, charged , say, to your purchase price in Euro, say, 22.55 Euro x 1.17 = ? is what you pay.

Bottom line : it adds up fast. Then it depends mainly on you travel style. I have no problems carrying large amount of Euro cash after taking the usual security measures, basically interested in or concerned about getting picked. It's not going to happen.

Please reread Paul's recent post. He has given you a clear, full explanation.

If you are seeing exchange rates at a European ATM, you are seeing what will happen to you if you foolishly accept the DCC offer and allow the ATM owner to set an exchange rate that will be different from (and much, much worse than) the rate you will receive if you simply withdraw money without conversion. If you conduct the transaction in euros (or whatever is the local currency), there will be no conversion done at the ATM, just the modest (I think about 1%) difference from the interbank rate as your withdrawal goes through the clearning process.

And yes, it's equally important not to fall for DCC when you pay by credit card--actually more important, because you will probably be paying for a lot more things by credit card rather than with cash. Accepting DCC is a good way to increase the cost of your trip by a substantial amount with no benefit to you.

Unless you're planning to exchange tens of thousands of dollars, this is all rather moot. As noted above, no one is going to change money for free (nor should they). You gotta pay somebody and wherever you end up, there's not going to be a ton of difference.

Let this be the least of your worries on your trip.

I have a Schwab VISA debit card that serves as my ATM card in Europe. I was in Prague last week. Every ATM I encountered in the old town had a terrible exchange rate (taking somewhere around a 10% cut of the exchanged money). Most were Euronet, but a Czech Sparkasse (bank) I checked also had about the same rate. I didn't use any of those, but there was a bank at the border of the Old Town/New Town by Powder Tower that became my place to get cash. The amount I received was almost dead on the published exchanged rate. That ATM did offer dynamic conversion, which took about a 7 percent cut as I recall, but I of course declined that.

Lots of great responses, this certainly puts it in perspective…

if you believe you paid 5% too much on the exchange, then add 0.1% to 0. 25% more to your trip cost. Is that worth worrying about? Go enjoy your time instead.

Or

Let this be the least of your worries on your trip.

I agree with both, and appreciate all the info.

Ciao!

Use the ATM. As noted it is hard for an individual to game the system better than the banks who deal with millions per day. Also consider that when I began booking our summer vacation last spring (with euros) the exchange rate was about a 10% difference, and the rate on our last transaction in Europe in August was close to a 25% difference. NOT because of bank fees but because of the decline in the value of a dollar versus the Euro because of US policy changes.