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Cash or Debit Card

Hello. I'm going to Europe (Germany and England) and I'm wondering if it would be better to just use my Debit card for purchases and to get cash at an ATM or to take cash with me and have it changed to euros and pounds when I get there. I read that getting your currency changed over at a post office was the cheapest way to go. And I've also been warned NOT to do it at the airport because that is the most expensive. Any thoughts or advice? Thanks in advance!

Posted by
20624 posts

Ignore what you know since most of it is wrong. The cheapest and most convenient way to obtain local currency is a bank owned ATM using your debit card. Even if your debit card charges a currency conversion fee it will still be cheaper than any money service in Europe. And DO NOT use your debit card to make purchases. It is should only be used to obtain cash. Use a credit card for purchases or cash. The airport is fine if it is a bank owned ATM. In all transactions with a debit card the exchange is set by the network and not by your bank or the European bank. And it will always be with 1% of the interbank rate at the time of the withdrawal.

Posted by
4686 posts

The cheapest way to go is usually to withdrawal cash (Euros or GBP) in the country you are in from an ATM, using your debit or ATM card. No need to go to a post office.

The key is knowing what your credit union or bank charges to use your ATM card in Europe. The ATM in Europe most likely won't charge you any per-use fee (as long as it is owned by a bank), but your credit union or bank might. I've never been charged an ATM fee in Europe by any bank ATM there. And my credit union has no per-use fee, either. The other cost is a currency conversion charge, a percentage (often charged by Visa), anywhere from 0% to 3%. One of my credit unions charges 1%, one charges 0%. Guess which one I use mostly?

Because my ATM card costs me nothing to use in Europe, I take out as much cash as I need a little at a time. But if yours charges you $3 USD per use, then you should try to take out more cash at a time.

And yes, ALWAYS pay in the local currency (Euros or GBP), NEVER in US dollars! All that does is add extra fees and costs.

Airport ATMs sometimes have surcharges; some say Travelex ATMs are expensive, but I'm not sure this is the case.

It's easy for many people to get a credit card that charges no foreign exchange fee; I charge almost everything on such a credit card when I travel just to avoid using too much cash, plus I get rewards (miles or cash back, whatever) on various credit cards. But your credit card may charge you as much as 3% foreign transaction fee. Get one that charges 0% if you can. Leave your Amex card at home if you have one; many places in Europe won't take them, but Visa/Mastercard is almost universally accepted. Some small restaurants or markets may be cash-only.

Posted by
2765 posts

This question gets asked regularly on this web site. I suggest that when doing your research you check out “Travel Tips” > “Money” which starts along the left hand side of this web page. It is full of very good information.

Posted by
20624 posts

...The other cost is a currency conversion charge, a percentage (often charged by Visa), anywhere from 0% to 3%. ...

That is misleading or slightly incorrect. The conversion charge is applied by the your card issuer - normally your bank. VISA/Mastercard does not add any fees. The network (Plus, Cirrus) does add a fee of less than 1% but it is buried in the exchange rate. All other fees applied will be clearly stated on your billing statement - required by bank regulations.

We do about 90% of our transactions in cash when we travel. It keeps it simple and never any question about the amount being paid. Often hotels will give a 5 to 10% discount for cash.

Posted by
4686 posts

And your "clarification" is irrelevant, Frank. All that matters is that there's an extra potential currency conversion fee in the transaction and to learn what it is; if you were planning to use a card that charges 3%, better to get a different card, use cash, or at least know what it costs when you use the card.

Posted by
6543 posts

We charge everything possible on a Visa card. For what little cash we spend, we get out of bank ATMs.
Consumers have legal rights provided on charge cards they don't get on ATM cards.

Posted by
11613 posts

Just a word on American Express: at least take your card info with you. In an emergency (like a stolen wallet), Amex will wire money to a nearby bank for you.

Posted by
4820 posts

To take it back a notch; what cards do you have and what will they charge for use in Europe? Find that out first.

For cash, using an ATM or Debit card attached to a checking account to withdraw from an ATM can be best for cash. If you have a good deal, it will cost you basically nothing over the interbank rate to get cash. Worst case, if you bank at a major bank, each transaction will cost you $5 plus 3% of the transaction. If that is the case, then ask about better options, likely opening another account for travel from a Credit Union, Charles Schwab, Capital One Checking, etc.

Otherwise, using a credit card with no Foreign Transaction Fee (typically about 3% otherwise) is best, check your card, maybe consider getting another card if your card charges a fee.

Also make sure your card has an EMV chip, you will likely still need to sign a slip, but it will make transactions easier. If you happen to have a chip and pin card, that is better, I would at least have a card that can be used with a PIN at an ATM for Cash Advance as a back-up.

Posted by
3439 posts

Using credit cards for all purchases, like back home, can run up the costs. Read the fine print ahead of time to know if your cc charges a fee for foreign purchases. Some do, some don't. Many smaller places don't accept debit. I draw lots of cash out of a bank ATM and spend it -- quick! easy! -- except for large purchases and hotel bills. If caught in Heathrow or other airport which has franchised out the ATMs I grit my teeth and withdraw enough cash to get into town. When stressed by travel fatigue, why count the pence? Only bank-imposed ATM charges I have found were in Spain, mainly the big CaixaBank, not its major rivals.

Posted by
16826 posts

If an ATM is going to charge you a usage fee, it will be laid out very clearly on the screen. Always read the screen. Cancel the transaction and walk away if you don't like what you see.

The ATM may offer to record the transaction in dollars rather than in the local currency. You do not want that. It is an opportunity for the bank to use and exchange rate that is very, very unfavorable to you. Again, read the screen carefully.

Some hotels, restaurants and shops might also offer to record credit card charges in dollars rather than in the local currency. Again, say "No". Insist that the transaction go through in euros (Germany) and pounds (England). Otherwise, you will pay too much.

Posted by
12099 posts

Hi,

Since your trip includes England, presumably London, if you stay in B&Bs, don't be surprised that at check-out, or whenever you pay (usually I pay at check-out but there have been a few times I paid the entire sum from to 2 to 4 nights at check-in), you are told that paying with a credit card incurs surcharge of 2-4%, which will be added to your total. In that case forget the credit card, pay the amount in cash.

In Germany don't be surprised if seemingly "fancy" restaurants located even tourist areas do not take a credit card, ie, have the cash handy.

Posted by
3318 posts

It's always a good idea, in my opinion, to have some local currency in hand when you land. Getting a hundred or two hundred Euros (or Pounds) from your local bank will cost you a little more, but it eliminates the hassle of trying to find a machine, the stress of hoping it works (they do occasionally malfunction), and doing it all while somewhat jet lagged. To me the small amount extra it cost to have money in hand when arriving is money well spent, and the extra cost relative to the overall cost of the trip is not, in my opinion, that much. Just one point of view

Posted by
4686 posts

I don't understand the need to get local currency ahead of time. I carry a few hundred USD with me as a backup when traveling overseas. If for some reason both of my ATM cards fail to work at the airport ATM or the ATM is down I could just exchange the USD at an exchange desk (albeit at a high rate) or use one of my credit cards. The chance that the ATM would fail, my credit cards would not be accepted, and there was nowhere to exchange USD, all at the same time, seems very remote. Perhaps if I were flying to some third world country I might reconsider, but certainly not flying to Germany or the UK.

Posted by
3136 posts

I read that getting your currency changed over at a post office was
the cheapest way to go.

I'm curious where you read this as this is incorrect. I want to read what you read & see who the source of this info is. Thanks.

And I've also been warned NOT to do it at the airport because that is
the most expensive.

With Travelex or any walk-in cash exchange with a human being, this is absolutely correct. But -- a bank-owned cash machine located in the airport like ABN-AMRO bank cash machines at Schiphol Airport in Amsterdam is the cheapest means of getting cash. It's like using an ABN-AMRO machine anywhere outside of Schiphol.

Debit cards should be used only for cash withdrawals at ATMs. Don't use them for purchases. You have no protections in case there is a mischarge.

Posted by
1403 posts

I am curious as to where you live. If the US, then I am curious who recommended the Post Office.

Like many posters, I sometimes use credit cards, but especially in Germany, staying and eating in smaller places, I usually pay cash I get from ATMs

Posted by
4820 posts

In regards to the comment about the Post Office and exchanging money; many years ago (lets go back maybe 20 years or more) this was sound advice in some countries, France for one comes to mind, it was the best place due to low standard rates and it was a service, not a profit center. Not all countries provided the service in Post Offices, but many places would do cash exchanges and cash Travelers Checks (remember those?) So I looked at that comment as outdated rather than "incorrect".

Posted by
4820 posts

Of course "after" I recalled my experiences from many years ago, I went and did a Google search to check my memory.....here was the first thing that came up:

https://www.ricksteves.com/travel-tips/money/cash-tips

and within that it states.....

Avoid (or at least minimize) cash exchange. The financial industry does a masterful job of hiding the fact that you lose money each time you change it. On average, at a bank you lose 8 percent when you change dollars to euros or another foreign currency. When you use currency exchange booths such as Forex or Travelex at the airport, you lose around 15 percent. If you must change cash in Europe, the postal banks inside post offices usually have the best rate

Posted by
12099 posts

Whether I land in London, FRA or Paris after a non-stop flight from SFO, I always have GBP or Euro on me. I don't get jetlagged but if I want to get something to eat and drink at the train station, I can pay in cash, especially in Germany. My experience in London is that the establishment at the train station or airport always took the US credit card, not so in Germany.

The last trip in June I saw these two American women at Bahnhof Friedrichstrasse in Berlin who dropped in at the eatery where I was having lunch. They ordered their food at the counter, then gave the clerk a credit card, only to be told that it was not accepted and to go to the ATM close by in the station. So, the mother stayed with the food while her daughter went off to find the ATM, she returned with the cash to pay.

Posted by
1170 posts

I like the distinction between 'incorrect' and 'outdated' advice.

In our modern low-friction cosmopolite environment, I don't do anything different in a European city the size of San Francisco than I do when I am in San Francisco: I get cash as needed from an ATM using my ATM (debit) card underwritten by a big bank that waives or refunds transaction fees, regardless of what currency is involved, and I use my Visa credit card, underwritten by a big bank (not the same big bank) to pay for most transactions that involve anything more than pocket money, like lodging, dining, shows, etc.
If there's some other motivation for using cash rather than Visa for a particular item, so be it - get out some more cash.

RS recommends making large cash withdrawals and keeping the extra in your money belt in order to minimize transaction fees; if you eliminated transaction fees through some other mechanism, then there is no reason to carry around more cash than you would when you're out and about in your own local city. That builds stress reduction into your habits -- you can't lose a lot of cash if you aren't carrying a lot of cash. Using your credit card is also an easy way to keep record of what you were spending money on, as well as earning whatever points your card earns.

I like the 'contactless' insights above as well -- since Apple Pay has recently become more convenient, and is in fact more secure than many other kinds of payment methods, the time has come to reassess the pros and cons of using your mobile phone to pay for shtuff that you used to pay for with pocket money, like coffee and gelato. Cash is still best for junk sold off of blankets on the sidewalk by people with inscrutable accents, though.

Posted by
2525 posts

Successful money strategy for this frugal traveler/tourist: use a no foreign transaction fee, no other fee, debit/ATM card to gain local currency at bank ATMs, and a no foreign transaction fee credit card for large purchases. I do not buy currency in advance and just use ATMs at arrival airports if I don’t have currency from a prior trip. Worst case but never needed scheme...I’d convert a small amount of money at an airport exchange booth to get by until I locate a functioning bank ATM.

Posted by
3277 posts

Europe is as modern, if not more so in many ways, as the US is. Credit cards are accepted for most purchases, especially at airports and major train stations. ATMs can be found on almost every street corner (good ones run by reputable banks). As long as your bank allows you to use your debit and credit cards in a foreign location, you will mostly have no issues.

Yes, the fact that the US credit card issuers in their infinite wisdom decided their customers are too dumb to remember a PIN for each credit card believe that requiring a signature instead of a PIN for purchases was a better idea (disregarding the fact that this negates most of the added security of a chip card) has caused many issues to date for us travelers trying to use those cards in some European locations. But in over 15 years of traveling to Europe with a total of 50 visits I have never not found a working ATM in the airport when I arrived nor been unable to charge most things I wanted to.

Just remember to tell your card issuers where and when you will be there. Listen to and make note of any response from them about where your cards might not work (Denmark for debit cards seems to be an issue right now). But otherwise, spend like you do at home. If your card issuers charge fees for foreign transactions and you will be making more than one foreign trip, get cards that don't. There are many options out there and quite a few credit cards have no fees of any kind.

Posted by
345 posts

Successful money strategy for this frugal traveler/tourist: use a no foreign transaction fee, no other fee, debit/ATM card to gain local currency at bank ATMs, and a no foreign transaction fee credit card for large purchases.

In addition to these requirements, I use debit/ATM cards that will refund any non-network fees. I withdraw amount that will last for a couple of days at a time, at any convenient machines. I use credit cards without annual fees and with rewards, for purchases only and never for cash withdrawal. I pay the credit card purchases based on local currency. I bring two of each, carry one set with me, and leave the other in the hotel.

Posted by
9 posts

I would like to thank everyone for all your replies and comments. To Stephen and Paul, I have read so many things on the internet in preparation for my trip that I couldn't tell you exactly where I read about the post office advice, it certainly could have been on Rick Steve's website.

Posted by
2811 posts

I read that getting your currency changed over at a post office was
the cheapest way to go.
I'm curious where you read this as this is incorrect.

It might just be that a post office will be the only place that will change money for you, so that would make it the cheapest. I recall several years ago when I had got a $100 Travelers Check to send to someone in France as a deposit, then decided not to send it. When I brought it into banks in France to cash it, no one would do so. At one bank they said I should go to La Poste. I did, and they cashed it; for a hefty fee, but at least I got rid of it. Also, La Poste can be a good place to get money in rural France (I don't know about other countries), because sometimes a town will have no banks, but there will be a post office with an ATM.

Posted by
17653 posts

VISA/Mastercard does not add any fees.

Actually, the "Network" (Visa, MC, Cirrus, Plus, et al) add about 1% for the transfer fee and exchange rate. Some banks absorb this charge to get your business, or in the case of big banks, who have a foreign currency operation, pay the Network in euro, thus avoiding half the fee and absorb the rest, and then charge you 3%.