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Buyer Beware! Chase Sapphire - 18% DAILY interest rate upon withdrawing euros

Just called the credit card company to let them know we would be out of the country (France and Italy).

I'd thought all along that I was saving money because "there was no foreign transaction fee" typically 3%.

However that is only for PURCHASES not withdrawls from ATM's for cash! (I was using RIck's advice on just getting Euro's upon arrival.)

Does anyone know of a decent card that will allow for low or no fees to withdraw cash (euros) in Europe?
Many thanks!

Posted by
7631 posts

Most people use their debit card that is tied to their checking account. Some banks don't charge for this and some do. Check with your bank. I doubt there is a credit card out there that doesn't treat a cash withdrawal as a loan, charging high interest rates as soon as the withdrawal is done.

Posted by
17653 posts

People on this website are often advised not to use Credit Cards in ATMs, as it is a "cash advance" and subject to a cash advance fee of about 4%, plus it starts charging interest immediately.

If you want to use an ATM, use a debit card or an ATM card that withdraws money directly from your account. A few banks give you ATM withdrawal without any fees. My Wells Fargo PMA account gives me two completely free withdrawals each calendar month (four withdrawals if my trip spans 2 months). Others will post about their bank which gives free withdrawals. My credit union gives withdrawals at 1% over the Interbank rate. Shop around.

Posted by
6795 posts

Using a credit card for cash is considered a cash advance, a big no-no, as you found out in time. You want to use your debit card, as Andrea said.

Posted by
2039 posts

No CREDIT CARD will let you take money from an ATM without charging an 18% (or more) interest rate starting that day. This is a CASH ADVANCE, not a purchase, and the terms for this, including the high interest rates, are spelled out in your agreement. And this will happen even if you did this at a local ATM at home.

Sorry this happened to you. You need a debit card from a bank or credit union that allows you to withdraw money from your account. Schwab and CapOne offer accounts with this, they do not charge ATM fees for withdrawals, they pay a bit of interest, and the money comes out at the interbank rate (mark-up is about 1/2 of1%). There are various credit unions with similar provisions that others can suggest, I have no experience with them. CapOne also has a no-fee MasterCard with no foreign transaction fee and 1.25% or 1.5% cashback on all purchases, depending on which one you've chosen.

Sorry to duplicate other posts, they appeared while I was typing.

Posted by
1803 posts

We have a free checking account with USAA Federal Savings Bank with no ATM fees. Anyone can get an account (you need not be a USAA member). We use this as our travel account ... transfer money from our regular checking account into this account for our trips, and my husband and I each have an ATM card (with a different number) to access the money. Has worked flawlessly for more than 10 years.

Posted by
2765 posts

As it says several places on this web site, plus as others have already posted, using a credit card to get local currency from an ATM in Europe is probably the worst way to get the best exchange rate and fees. I have gone to Europe for 13 years in the last 14 and use a DEBIT CARD tied to a CHECKING ACCOUNT at a local credit union to get local currency from ATM. My credit union charges me a 1% total fees for each transaction. There are no-fee cards out there but I have been with my credit union since 1972 and choose to remain there.

Posted by
11549 posts

Echoing the above: credit cards have never been intended for cash withdrawals except in a dire emergency. Use them for purchases - at businesses which will accept them - but use ATM cards for cash.

Posted by
971 posts

I know most people do not read their account agreement when opening an account (checking, credit card etc) but this would have been disclosed at account opening. GOOD thing you called!! Rick's advise is still valid, use your ATM or debit card to get cash. You can still get cash at an ATM using your Chase credit card, just be aware of the interest rate. My bank charges 2% for cash withdrawals, not as steep as others, just not sure I want to open a whole new checking account for 20 days of my life.

Posted by
276 posts

Ask you bank if they have a partner bank in the countries you are visiting. If so, they may wave the fees.

Posted by
396 posts

My credit union charges a flat $1 fee for foreign withdrawals.

For extra security I opened a second checking account. Whenever I needed to withdraw money I would transfer money from my regular checking account into my travel account. The travel account had no overdraft protection. That is, if there's no money in it nothing can be taken out. So no worries about my account being compromised at an ATM that's been tampered with.

Posted by
4 posts

Charles Schwab is the ATM to use. I set up a Money Market account with them. I start saving a few months for our trip by transferring trip money from my regular bank to Charles Schwab using their website link. I use the Chase Sapphire for hotels, cars, train tickets and restaurants. No exchange fees on either account. Watch out for the interest rate on Chase Sapphire if you can't pay the bill when you get home!

Posted by
7631 posts

I've done a lot of traveling and active on this forum for many years. I've never heard of we swap. Best to do some investigating before using them.

Edit - Be aware that the person who recommended that site has never been to Europe before.

Posted by
6045 posts

Also, that website (weswap.com) was promoted in a post that has since been deleted by the webmaster for guidelines infraction. That's not to say it's not a legitimate website but I would be wary.

And maybe this whole thread was just another way to sneak it into the forum.

Posted by
7631 posts

Good point Nancy. I never saw the post that was removed.

Posted by
48 posts

Someone mentioned that anyone can have a bank account with USAA. That is no longer true. In order to open a new deposit account you must be eligible for membership (your own military service or lineal decendent/spouse of an active member)-- this changed last year. Just wanted to let you know in case you were looking in this direction.

Posted by
2039 posts

You can Google search for information on that weswap.com. It appears to be a peer-to-peer sharing group, and you get the money in the form of a prepaid mastercard currency card, to which there are rules and fees involved. Can't speak for anyone else, but I would not touch a product like this.

Posted by
6045 posts

"Can't speak for anyone else, but I would not touch a product like this"

I agree Larry, whenever I see 'prepaid' I think 'fees'. As far as I can see they're only good for someone who doesn't have a regular checking account with debit/atm card.

Posted by
11549 posts

Can't speak for anyone else, but I would not touch a product like
this.

Another vote here: I wouldn't touch it.

Posted by
20624 posts

I just rolled through the weswap web site. The first big red flag is that they use a PREPAID mastercard. Any prepaid card regardless of the issue is consider a gift card and, thus, is outside of the bank regulations governing standard credit and debit cards. Second it is not absolutely free - fees range from 1 to 1.4% - and hint at the interbank exchange rate but do not actually state the exchange rate used. Third big concern - you load money into your account on their site and they transfer your converted funds to a prepaid card. Who is this middle man??? What protection do you have if the middle man disappears some day? No FDIC insurance for sure. This reminds a little bit of the bitcoin problems.

@themusteach - you didn't read of all of Rick's advice -- just getting Euro's upon arrival from an ATM with a debit card. The key is the debit card. And your headline is a little misleading. No credit card charges an 18% daily fee - annually perhaps, and compounded which makes it higher but not 18% daily. There are still some usury laws around. Just be sure you understand the difference between debit and credit cards.

Posted by
17653 posts

Per Weswap, my question is, "why bother?" They admit they charge 1%. My credit union charges 1% and I know who they are. I have no idea who these people are. Further, my Wells Fargo PMA account gives me two free withdrawals per calendar month, four free withdrawals if my trip spans two calendar months. That's better than what these unknown guys charge. Finally, I don't have one currently, but probably will in the future, Shwab has fee free withdrawals in Europe from their accounts. So, as I said, "Why bother?"

Oh, and, my credit union does not take money out of my account if I don't make any withdrawals for a year. Weswap does.

Posted by
4820 posts

Just a comment on the original posters observation. I think many fail to do the math and fall victim to the scary interest rate numbers, overlooking the value of a credit card cash advance as one tool of several for your travels.

Yes, a debit card at an atm that has no fees is the best. But in the original example, their CC charges a 3% Foreign Transaction Fee for a regular transaction, no fee but an 18% interest rate from time of the transaction for cash advance. The poster seems to have no issues with using a card with a 3% FTF, spending $1000 would cost you $1030. However, if they withdrew $1000 equivalent from an ATM, at 18% and not paying until 1 month later, it would only cost $1015 to repay the money with interest, or a cost of 1.5%. Of course, as soon as the transaction posts you can pay online nowadays, dropping that to almost nothing, or like my card, they charge a minimum interest fee (.50 cents). The poster does not mention any other fees associated with cash advance, it is more common to wave the FTF, but charge a flat fee or percentage instead. For my card, it would cost me about 5% in total, worse than my ATM card, worse than most of my CC for a regular transaction, but same or better than getting euros in the US.

The main points are, the poster would be better off getting a cash advance than using the card to pay the bill, and with that card, a cash advance is only marginally worse than an ATM transaction at ~1% cost. Also, know the fees associated with your various cards and accounts, and if the fees are a percentage or an interest rate, run some scenarios to get a sense of the true costs, it may change the way you access money.

Posted by
3277 posts

While you don't pay a foreign transaction fee, the Chase sapphire does charge a cash advance fee on top of the interest. Right now, that is either 5% of the total after converting to USD or $10 whichever is higher. So if you get $100 out of an ATM with this card, it costs you $110 plus the interest until you pay it off (and the interest on cash advances for this card is 24.9% annually, not daily, compounded continuously from the moment the cash is received). Not such a great deal. But then Credit Cards were never meant to be a source for your cash withdrawals.

Open an account at a bank that doesn't charge ATM or foreign transaction fees on their debit cards, put a few dollars there to cover your expected expenses, and use that. There are too many that offer this option to mention by name here.

Posted by
101 posts

As others have mentioned, the Charles Schwab checking account is a great way to withdraw travel money. I've used it many places, including the Middle East, U.K., and Brazil. And also, as another poster mentioned, there is a security in having one's travel account separate from your regular checking account.

One caveat. A few times (including in Brazil), my card didn't work at first. I had to call their customer service line to find that it had been flagged for fraud! Once this was lifted it was fine. In other places, I had to try a few different ATM's before I found one that was compatible with the card. So be prepared to call customer service if needed, and try to have some backup plan if you can't get at your money right away. I try to travel with some local currency.

Also, the CS card should be used a few times in the U.S. too, so it does not get cancelled. I've heard they don't like it if the card is only used overseas.