Article on how to do money

There are several factual errors. I guessing it is broiler plate job.

Reading articles like that just give me a headache. Where do I start? How about pretty much everything stated about pre paid cards is the exact opposite of reality (at least when you are talking about cards from the US)? Or that MasterCard gives you a better exchange rate than Visa which specifically referenced cards issued in the UK?

Looks to me like this should be labeled "advertisement" .

""Mastercard plastic, barring a few anomalies, gives you a better rate than Visa cards for comparable spending.""

The rates are set by your bank, not the card company. Major banks, like Wells Fargo, pay the "Network (Visa, M/C, Plus, Cirrus, et al) ~½% to handle the transaction over there and bill them in euro), then bill you 3% for "currency exchange". Then, if you used an ATM, they add an additional $5 (1%+ on a less-than-$500 withdrawal). Smaller banks and credit unions charge you 1% and still make a profit.

"stick with Mastercard for your larger transactions to maximize your vacation funds" "keep your credit card for larger charges like ... hotel bills"

Using places that take credit cards is false economy. They are the more expensive places vs those that only take cash. Dealing entirely with cash from an ATM is still the least expensive way.

Sorry phred - but this is not a very helpful article. Lots of factual errors indeed, especially regarding travel in Europe. A few:

Pre-paid cards can be very expensive in fees. Not just inactivity fees.

Cash is king in many parts of Europe (not all) and you'll need more than just a small amount to get around.

MasterCard does not offer better exchange rates. The interbank rate is just that, a common rate used by banks for exchanging funds. Each bank then sets its own fees and charges on top of that.

At least they noted that travelers checks are dead and to avoid currency exchanges.

Lee,

The bank that issues your credit card to you does NOT have anything to do with the exchange rate. That rate is set by the network for your card (Visa, MasterCard, American Express, Discover). The only thing the card issuing bank does is add on whatever fees they choose. So for a transaction done with any card at a specific time and date, the exchange rate is always going to be exactly the same no matter if it is a Wells Fargo, Capital One, Local Credit Union or even a prepaid card bought at the grocery store. (Yes, there can be a fraction of a cent difference between the various networks on the rates but never enough to even notice unless you are spending hundreds of thousands of dollars.) The networks charge the card issuers 1% and they provide the issuers pre converted transactions. There is currently no option to do this any other way. The issuers never see the foreign currency amount except as a notation on the transaction that they can print on your statement for reference. The 3% or so "foreign transaction fee" is just a money grab by the bank because they can as is the $5 fee. The issuer still gets the normal interchange fee (an amount that is deducted from the settlement amount the merchant actually gets) paid to them by the network which is almost always more than 1%. That's why card issuers like Capital One never charge any fee -- they don't need to and still make loads of profit.

When I said "rate", I was referring to the rate in terms of what the article called rate, which is the rate YOU are charged, not the Interbank rate. I think that both MasterCard and Visa go by the same Interbank rate, although they reserve the right to pick the rate they want within time period. The Network (M/C, Visa, Cirrus, Plus, et al) add ~½% for handling the transaction in Europe. Your bank pays the Network charge, then adds their own charge, which can be 1% - 3%. I've had both Visa and MasterCard cards over the years, and I have never seen a difference in the Interbank rate, and the extra added by the banks varies by bank, not card type. Big banks, like Wells Fargo, Chase, et al, add 3%. My local bank here in Denver adds 2%, and my credit union only adds 1%. Some banks add 0% on certain accounts, but they are eating the ½% Network charge.

Lee didn't say exchange rate. Read it carefully. He was referring to the fees that get added on after it is processed by the network company.

I think Lee, Mark and I are saying the same things about the network rates. The key is that the article was wrong about it.

Well, to be fair, though the article did get into some costs, the focus was on the "Safest" options, what it fails to tell you is that safety comes at a cost.

Prepaid cards (like Travellers Checks of Old) are very safe, but the concern from a cost standpoint is they get you in fees to get the card, have their own exchange rate which is another loss for you, then typically another fee when you get your money out.

Credit is obviously cheaper than a prepaid card, what the article fails to note is that you can easily find a card with no foreign transaction fee (FTF), meaning all you pay is the interbank fees, ~1/2 to 1%. The Mastercard vs Visa comment I do not get, except that most of the cards that have no FTF tend to be Mastercards (and some American Express) so maybe that is what they meant.

The article acknowledges that using an ATM is cheapest and I suppose I could agree that withdrawing and carrying cash has some risk, certainly carrying a large amount does, but for me, using an ATM in conjunction with Credit is worth the risk. Aside from that, yeah, the article was all but worthless.

I think people just need to accept that for every exchange of consideration in a travel situation, someone will get paid. Sometimes more, sometimes less, try to make it as little as possible as often as possible but don't turn your trip into one huge spreadsheet of expenses. Use ATMs and credit cards and enjoy your damn vacation!