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Foreign Conversion Rates

Hi...
I was convinced by this forum to get and ATM card for our long trip to Europe (42days)
So thank you for that!
We have opened a Schwab account which never has a transaction fee and no ATM fees.

Question...have any of you run into any very unfair foreign currency conversion fees? If so how does one try to avoid when using ATMs?
Thanks
Cathy

Posted by
18380 posts

Just be sure you are using a real bank ATM rather than a machine owned by a currency-exchange firm or other business, and always allow the transaction to be processed in the local currency, not in US dollars. Not all ATMs give you the dollar option, but more seem to do so every year, and you do not want that.

I've spent over 10 months in Europe in recent years and have never seen a bad exchange rate on my bank statement.

Posted by
6615 posts

Avoid dynamic currency conversion (DCC) by always using the local currency. It's not exactly "unfair" because it's (usually) disclosed ahead of time, so be on the lookout for it and simply decline.
https://www.ricksteves.com/travel-tips/money/card-fees
https://wallethub.com/edu/dynamic-currency-conversion/25576/

Most ATM will not try to tempt you into DCC, so there is not too much to worry about except for any charges from your bank for using your debit card overseas. Same is true for credit cards - use a card without foreign exchange fees.

Posted by
8889 posts

"Normally" the conversion is done by the card issuer (Visa, Mastercard etc.), and they give you the "interbank" rate, which is good. The ATM owner does not set the conversion rate, the rate will be the same for all machines. Some (not many) machines have fees, but they must always tell you and you can say no and go elsewhere. If there are other fees, they are added by your bank.
EXCEPT if it offers to process the transaction in "your currency", always answer NO. If you say yes, that is the dreaded DCC, and you are giving the ATM owner permission to do the exchange at whatever rate the want.

The same warning applies to credit cards. If they offer to do the transaction in your currency, always insist on the local currency and the exact amount shown on the bill.

Posted by
6615 posts

I don't have any reason to take EUR with me but I'm not very risk averse (I don't carry much cash around anywhere) and never found an issue with using ATMs at the airport. There are lots of folks who have more comfort in ordering some currency beforehand, so it just depends on your travel style. I would try to plan to have a little left over from your trip, so that you can take it on your next trip with you. I figure you only need a little money for transport to get you into town...once you're in the city, you can use ATMs anywhere.

Posted by
5579 posts

Carrying USD to Europe -- I carry enough to buy lunch at SFO on the trip out and get me home if I don't want to look for an ATM after I land on the trip back.

Posted by
3199 posts

I carry $100 cash with me as an "emergency" fund whenever I travel. I generally return home with it intact.

My Schwab card has worked great for me in both US, Canada, Europe and Africa. The only problem I ever had was when I was not careful about choosing an ATM machine that was associated with a bank. I used one at the tourist information center in Victoria BC and was skimmed. Schwab caught the fraud almost immediately and I had a new card and my money returned to my account within just a few days.

I watched some videos about skimmers and how to spot them and now I am careful to use only bank ATM machines. I have had no further problems. Do be careful to avoid dynamic currency conversion (they will ask if you would like to pay in dollars instead) always choose local currency.

Posted by
21032 posts

..... .have any of you run into any very unfair foreign currency conversion fees? ......

Don't call them unfair. The fees are perfectly legal and fair for the situation and higher. The highest fees will be charged when you exchange cash at an exchange booth. Some private ATMs will charge higher fees so just be sure it is owned by a bank. I prefer to use ATMs attached to banks during open hours. When use a Visa or Mastercard branded ATM the exchange rate is set by the networks and at that time anyone using an ATM will get exactly the exchange rate whether they are in Rome or Florence or anywhere. Three minutes later the rate will change.

Posted by
5744 posts

What Frank said. Whoever is selling you euros, they are providing you a service, for which they are entitled to make money. Its your choice who you want to buy from, and what price.

I take whatever leftover currency I have in order to avoid having to use an ATM upon arrival. At least enough to buy sundries at the airport, pay for a taxi or other transport, and maybe a first meal or two. Then hit an ATM the next day.

Posted by
12200 posts

"Unfair" to whom?

On this last trip I was asked numerous times whether I wanted to pay in dollars or Euro, caught me by surprise the first couple of times. I told them Euro. It seemed more simple. All the more so since I couldn't figure out the math so quickly. If I paid cash, that question would not have been asked.

Posted by
3453 posts

I take whatever USD I have in my pocket with me when I go to Europe. Could be $100, could be $5, could be 49 cents. I don't usually pay for things with cash while I am in the US, so I don't carry a lot at any time anyway and I certainly don't get extra to carry with me if I am going someplace that doesn't use USD. I don't plan on using any of that while in Europe because no one in Europe wants USD currency. It is nice to have dollars when you return from the trip if you need to grab a snack or drink before heading home from the airport.

Posted by
12200 posts

Bringing dollars to Europe is what I do too, anywhere from $20 to 100, just pocket money in the wallet. Whether anyone accepts it over there is another story but I believe it would be regardless of the change you get back. Historically, the two most desired currencies aside from the local currency were the US $ and the DM. Since the Euro it is the US $ and the Euro.

Posted by
15840 posts

I carry enough US cash to pay my parking bill at the private lot I use in cash to get a discount. This could also be converted to local currency in Europe, and would have to be a real emergency for me to use one of those very expensive exchange bureaus.

Posted by
2184 posts

Note that withdrawing local currency from an ATM is not "buying" cash. It is simply a withdrawal of your funds locally. Exchanging/converting money IS BUYING cash, and of course there are fees for that - either an exorbitant service charge or an exorbitant conversion rate. If one wishes to support this business model of making money at others' expense, then one should do so. But if one is going to support this model, then a complaint over the fees and costs is not valid.

Posted by
21032 posts

I am sorry, ginger, but that means nothing without knowing the date and time. At first glance, that looks like a poor exchange rate. The odds of getting a fair or good exchange rate from an exchange bureau in Europe is low to zero.

Posted by
17899 posts

My partner took several hundred US dollars with her to Germany last month. When we got there, her ATM card wouldn't work. Apparently she had changed the PIN since our last trip, because it worked then, but had forgotten that she had change it and to what. She felt helpless having to rely on my ATM cards, so she tried to exchange her USD for euro in banks. She tried bank after bank but no one was interested in exchanging currency, and we never saw a currency exchange booth.

So, don't take US dollars to Europe (Germany, at least) expecting to exchange them for euro. It won't work.