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Using an American debit card vs cash vs traveler's checks

Any advice on the best form of spending money to use? I have been hearing about international debit cards. What is the advantage/disadvantage of this? Are travelers checks even a thing anymore? I guess I am looking for the best way to avoid money exchange fees. Thanks

Posted by
14288 posts

You don't need an "International Debit Card", the one from your local bank will likely do fine. Check the charges for international transactions. You'd want to use the Debit Card to withdraw local currency at an ATM. I don't use mine in stores in Europe like I do at home. I take 2 debit cards - one from my local credit union with low charges and one from my Money Market which also has very low charges.

Credit cards work well - I use them for big purchases such as hotel bills, restaurant meals etc. I use cash for small transactions. I take 2, a VISA and an American Express. The AMEX is mostly in case I have a catastrophe and need to buy a big airline ticket. My limit on that card is ridiculously high so I figure it can get me home from anywhere.

Travelers Checks are NOT a thing any more. Most banks won't cash them.

Local currency - works great. Get it at your destination altho I always like to have 100-200 whatevers (Euro/GBP/Etc) when I land so I can get myself in to town from the airport and get a couple of meals before I need to go to the ATM. Now I just carry over money from the last trip but when I started out I'd get currency from my bank.

You'll have money exchange fees any way you do it. If something advertises they have no transaction fees they may be clipping you by having a poorer exchange rate than the going rate. AAA used to see currency and my local one had "no charges" but the exchange rate was extremely poor which was where they made up their difference.

For myself, I like to strike a balance between convenience and savings. If I get 300Euro out of the ATM and it costs me $3 (or probably a bit more like $3.20 or whatever the exchange rate is) that is totally worth it. I did get furious when one of my local banks changed their fee and charged 3% + a $5 fee for every transaction. I closed that account. I don't mind the 1% change fee my Credit union charges.

Have you checked to see how much your banks charge?

Posted by
1882 posts

On the right hand side of the Travel Forum main page do you see Useful Tools. Under that click on Cash and Currency Tips. I think you will find it a useful read.

Posted by
4066 posts

Your American debit card can withdraw money from ATMs in the local currencies of many countries. The exchange rate is based on international calculations. However, you will pay more than that rate to "buy" the currency; less than that rate to sell it back. Banks are profit-makers. That's true over-the-counter, too. The days of shopping around exchange rates are mostly faded away.
As well, the bank that issues your card often charges an extra fee for foreign exchange. Check with your bank; some, such as Capitol One in the US, may offer no-fee transactions on certain cards.

The banks operating the machines at the other end usually do not, but there are exceptions. If you don't like that fee, press cancel and go to another machine operated by a different system. If a machine has a Visa or MasterCard sticker, it should accept your ATM card. Try to use an ATM attached, or inside, a bank. All this advice may not apply to the ATM back by the w.c. in a pub; avoid if possible.

Only in the direst of emergencies should you use a credit card to obtain cash; you will pay an horrendous interest rate on what constitutes a loan rather than a withdrawal.

My strategy is to withdraw a substantial sum at the arrival airport, and pay cash for all purchases and other transactions except big items. I never pay by debit, abroad or at home, but that's just me. Smaller merchants may set a minimum purchase price, and may not accept debit cards at all.

Yes, the traveller's cheque is almost as extinct as a safari by elephant. In France, for instance, many banks will not cash them ( the cheques, not the elephant) and may even refuse to change bills.

To repeat: Read the fine print for your plastic's policies.

Posted by
6671 posts

Getting cash by using a debit card from your own bank at overseas ATMs will cost you less in fees and get you a better exchange rate than any other method available to us ordinary consumers. Some people keep money in banks that don't charge foreign transaction fees, but those fees aren't so high that I've felt the need to do that. When you withdraw from a foreign ATM, get as much as you can within your daily credit limit (verify that with the bank when you notify them about your travel), to minimize the number of fees you pay in the course of a trip.

Credit cards are convenient for big items like hotels, cars, airfares, and high-end meals, but they also come with fees -- my Visa is a percentage. Some merchants won't take them for smaller purchases, some will charge a higher price for using a card.

The most expensive way to get money, here or abroad, is Travelex or other business that buys and sells different currencies. Just look at the difference between the "buy" and "sell" prices they display. Your own bank at home will also, most likely, charge you a hefty commission reflecting their cost and exchange-rate risk dealing with foreign currencies.

I cashed my last (old) traveler's checks on a cruise ship years ago, they were happy to take them but maybe no longer. They're a relic of the days when your signature actually identified you instead of being just an afterthought.

Posted by
3521 posts

I am looking for the best way to avoid money exchange fees

Then avoid traveler checks, "international debit" cards, and any credit or debit cards that charge foreign use fees.

While Traveler Checks are still available, they are worthless for all practical uses. You will pay a fee to purchase them. Then, if you can find somewhere that will cash them pay another charge. If the checks are not in the local currency, you will also be charged at the rate the acceptor chooses (same if you purchase foreign currency checks, they pick the rate to use). There are no merchants left that accept them (no matter what the American Express web site says), most clerks have never even seen one. Banks in Europe will not perform any transactions for you unless you have an account with that bank, so no cashing of checks at the bank. Avoid the Traveler Checks even as emergency backup.

What you call "international " debit cards are sometimes referred to as pre paid travel debit cards. There are fees for everything you do on these cards: buy the card, load money on the card, foreign exchange fee to convert to the currency you will be paying out in, balance inquiry fees, fees to get the money off the card when you are done using it, and the final foreign conversion fee to convert the loaded funds back to USD. I'm sure I missed a few fees.

Get a credit card (or two) that do not charge foreign use fees. Capital One has several, and many other banks have them now too. Most have zero annual fees as well. You will pay like you always do, and the purchase will be converted to USD automatically behind the scenes at the rate given by Google. There are no added fees. You cannot get a better rate.

Also, open a bank account somewhere the the debit cards also charge zero extra for foreign transactions and use this card to get all the cash you need from bank operated ATMs. Most of these in Europe also charge no fees at the ATM. Capital One 360 is a good card for this since they do not charge anything extra (zero, nada, zilch) when you use your card for foreign transactions. They even absorb the international network fee. You can't do better. Charles Schwab also has a similar debit card.

Of course make sure to inform your bank and credit card issuers of when and where you will be traveling so they don't think someone is fraudulently using your card and cut you off.

Posted by
33339 posts

Southam, I am so glad you clarified that you weren't trying to cash an elephant. I mean, really. How would you get it through the door to get up to the counter? And where would they put the stamp? Oh dear....

Posted by
23473 posts

For some reasons some posters like to use a lot of words to answer a very simple question. The cheapest and most convenient way to obtain local currency is via a debit card (Master or Visa card branded) at a local, bank owned ATM in the country. There is nothing cheaper. Travelers Checks had been dead for a couple of decades and never heard of an international debit card. You local debit is just fine.

Posted by
1103 posts

The Amazon Visa card is also free of foreign transaction fees. The Fidelity brokerage firm offers a debit card that waives all ATM Fees worldwide.

Posted by
8293 posts

The OP is looking for “the best way to avoid money exchange fees” If you calculate the thousands of dollars your trip will cost, any exchange fees will be negligable, really. Heed all the advice given here about eliminating or reducing some of the fees, and then just go on your trip and enjoy yourself. It is sort of the cost of doing business in a wonderful foreign land.

Posted by
5386 posts

"Banks in Europe will not perform any transactions for you unless you have an account with that bank, so no cashing of checks at the bank."

Not that I would recommend their use at all in England, but travellers' cheques are still cashable at the Post Office or branches of Nat West Bank. They have never been directly spendable in shops etc.

Just use a card with low/no transaction fees that is convenient for you.

Posted by
3521 posts

For some reasons some posters like to use a lot of words to answer a very simple question

Because using fewer words seems to not be enough to get the point across to some asking the questions.

Posted by
7906 posts

We always get cash from ATM machines in Europe with our US ATM cards, since we have a four digit passwords.

Also, we have credit cards that don't have foreign transaction fees.

Traveler's checks are a pain in the ---. I remember using them in the 80s and having to wait in line at a bank in Spain for an hour just to get the local currency.

I always take about $300-$400 in US cash just in case, for some reason my ATM card was a problem. Been all over the World and only had once issue with using my ATM card at a back cash machine and that was in Denmark. Not sure why it would not work. Tried it in two ATM machines.

I take a money belt to keep some cash, and sometimes passport, especially in places like Madrid, Barcelona, Rome and Paris, since pickpockets are bad there. We use our hotel or cruise ship safe to keep most of our cash, documents, etc.

Posted by
56 posts

Sorry if this is redundant to others' posts. I did extensive research on this before an Ireland trip this past summer.

We used our Alaska Airlines credit cards where and when we could. No transaction or foreign currency fees at all.

As for having access to an ATM/cash: We use a credit union and so I wasn't sure if our cards would work overseas. They did in fact work in Ireland, but to add a layer of security, I opened a new checking account with our bank. I put a certain amount of $ in that account and I set it up to NOT link to any other account at the bank. (No overdraft protection.) Thus, I only had what I put in for use in Ireland, BUT I knew that if our card was compromised I was only going to lose a certain amount.

Additionally, I thought we might want cash before arriving, but the fees stateside were ridiculous to bring euro into the bank. it was very easy to get cash upon arrival at the terminal down in baggage claim at a small "brick and mortar" Bank of Ireland branch (not just an ATM). It was out of the way and felt very secure. I am sure London airports also offer this access to banking, likely around the clock. Good luck!

Posted by
56 posts

Whatever cards you use make sure they have both a chip and pin #. If using atm/bank cards you may be asked to supply both at machines. Europe has tighter protections.