Exchange rate

You should check around many card companies, offer no fee on foreign exchanges,, I have a few Chase cards,, i think most of these offer no fee's on exchange, plus other benefits, like miles, and insurance, etc
United and prob Southwest are the best .. there's an annual fee, sometimes the first year is free...
contact me if i can help further

F

Most major US banks charge 3% for using credit cards in Europe, and 3% plus a fee, usually $5 for using an out of system ATM. Some smaller local bank charge 2% plus a fee. My credit union charges 1% plus a small fee (maybe $1). So, your bank is lying to you. 3% is the worst rate, not the best rate.

Maybe your bank takes a 3% cut, but my credit union is happy with 0.8%. I think that is mainly because they use VISA for their cards. MasterCard is less, I have heard. Look into opening a credit union account.
But if you buy foreign currency before you go, it will likely be 6% to 10%, and if, heaven forbid, you have to use an airport exchange booth, 15% to 25%.

A 3% ATM foreign transaction perineum is common for major US banks. My credit union has a 1% markup. For no mark-up, see:
https://www.nerdwallet.com/blog/banking/debit-card-foreign-transaction-international-atm-fees/
Institutions with no foreign transaction fee for debit card use

Capital One 360:

Capital One Bank’s online unit doesn’t charge a conversion fee or for
using a foreign ATM network, though it says MasterCard may add an
“adjustment factor” based on the value of a foreign-currency
transaction.

Charles Schwab Bank: The banking unit of this securities broker
reimburses any ATM fees from cash withdrawals worldwide, regardless of
the network used. There are also no currency conversion fees for debit
card transactions in a foreign currency.

Discover The bank doesn’t charge foreign ATM network or currency
conversion fees, but a Discover card only works in a few countries
outside the U.S., including Canada, Mexico and some Caribbean na

tions.

Get a better bank. The base charge in the system for exchange is 1% -- anything above that is your bank charging more because they have you over a barrel. Get another bank. We dropped BoA when they added withdrawal charges and had this 3% grift. The bank we use charges 1% and they also pay any fees charged by the bank that owns the machine. They imply to you that this charge is just required by the process; it is not; it is their extra fee.

Same with credit cards-- some charge as much as 4% for the exchange; I have a card that charges 1% and gives points we use to pay for many of our flights.

I didn't pay attention to the exchange rate, but Bank of American has partner banks throughout Europe. If you go to one of its partner banks, which were easy to locate through England and France, you do not pay an ATM fee when withdrawing money. With a travel credit card, I do not pay a transaction fee when using my credit card, just the cost of what I charged.

Everybody is kind of shotgunning it. You don't understand the exchange rate. Basically you are buying the other guys money, and the price of that money is $xxx.xx. Today the sale price for one euro is $1.14. So if you wanted to buy 10 euro you would have to pay $11.40. That rate is commonly called the Interbank rate and refers to the rate banks pay when they deal in millions and millions of dollars and euro. You and I don't get that rate because we cannot buy wholesale. However, when you used a credit card or a bank debit card, all of those transactions get rolled into one by the networks (Mastercard or Visa) and general they get rate within 1% of the best rate or about $1.15 or $1.16 and that is what gets past to you when you use your debit card to withdraw money at a bank owned ATM. That is where you get your best rate. After that your bank or card issuer adds on few fees for allowing you to use their card to get your money. That is where the 3% gets added and maybe an extra $5 each time you use your card. Totally that is still cheaper than if you exchange your money in the US or use an exchange bureau in Europe.

However, there are many banks, credit and debit card companies, credit union, Schwab, etc., that have low fees or even a few no fees. A lot of credit unions will only charge 1%. Now that is good deal if you cannot find free. So look around your area for financial institutions that offer a better deal on debit cards.

So to answer your question - the best deal is to use your debit card at a bank owned ATM in Europe but your 3% charge is only fair. There are worse but not a lot.

gr,

Just to clarify, I believe the 3% charge you're referring to is a *foreign currency charge" which the banks charge to cover their cost of doing the conversion. That will be in addition to the US$ / Euro currency exchange, which is presently at about 15%.

Good advice above.
It's better to withdraw the maximum daily limit each time you visit an ATM, so you can avoid multiple transaction fees which will be charged by your bank each time you make a withdrawal. The French ATMs do not charge a fee for withdrawals.
Check to verify your MDL, and if you'd like to raise it while you're travelling, just ask your bank in advance.
Don't forget to inform your bank of your travel dates before you leave home - otherwise, your card could be refused for purchases or withdrawals, due to "suspicion of fraudulent activity". This will save you from making a long-distance call.

Using the ATM is surely the best way to withdraw cash versus the option of carrying American money and then exchanging it at a currency exchange place. Those exchange rates are astronomical!! However, there is a difference between an exchange rate and a service fee. My bank charges $5 for every ATM withdrawal (regardless of the amount) but the bank that I am withdrawing from determines the conversion rate. For example, I bank with PNC, however if I am withdrawing from a BBVA ATM, it's BBVA's conversion rate that will be used, which will likely be very close to the official conversion rate as seen on such sites as Yahoo's X-Rates (at least, this is how I have always understood it - please feel free to correct me on that point if need be).

Now of this I am certain: if I am using my debit card as a point of sale purchase, PNC bank does the conversion, and on top of that, charges a 3% conversion change fee. So if the current exchange rate is 1 euro for every 1.15 American dollars, and I use my card to make a 100 EURO purchase, I would actually end up paying $115 plus the additional fee of ($115 x 3%) $3.45 by PNC.
So is your bank doing a 3% exchange rate OR a 3% exchange rate conversion FEE with cash removal/POS purchases (which may not by the best out there but makes more sense)?

Lots of variations on what happens, but here is one more that hopefully helps. For an ATM transaction, there are three sources of "Cost" (lets avoid the word "fee" since that has become a loaded term):

1. Costs the owner of the ATM adds onto the transaction
2. Network costs added on by the company handling the transaction (Star, Plus, and others, some run by Visa and Mastercard)
3. Costs added by your bank

The only certain cost you will have is the Network costs, actually two different costs, a flat transaction cost and a currency conversion cost which is a % of transaction. Since as an earlier poster noted, they essentially bundle all of the Dollars together on a given day, the networks trade at the interbank rate and they likely get a favorable rate during the day. The costs they pass on (in all cases to your bank first) total about 1% of the transaction, but they vary slightly by the amount of the transaction, and since you do not know the exact rate they exchanged at, your calculation may show a little over 1%, or sometimes that the transaction was less than the published daily rate. The posters above that indicate they pay about 1% are referring to this cost. Your bank may choose to allow this cost to post with the transaction so it looks like the amount withdrawn, they may break it out as a fee, or they may absorb it, recouping it in another fee of their own.

As for the other costs;

ATMs in Europe typically do not charge a fee for use like you encounter here in the US, so good news there. Not that you might not see it, and more frequently there is another topic of DCC, but that is really a cost charged by the ATM owner so avoid it.

Finally your bank. Your bank may charge a flat per transaction cost, maybe a monthly cost for a number of ATM transactions, Plus they may also charge a Foreign Transaction Fee (FTF) (the 3% you mention). If you have a good bank, they have none of these costs.

In the end, the sum of those costs equal your cost of money above the Interbank Rate. As many mentioned, the best seems to be about 1%. If you use an affiliate ATM and have a 3% FTF, then your cost is 3%. if you have a $5 fee plus the 3%, then it varies by amount, but for a $200 withdrawal, it would run about 5.5%.

For other forms, a credit card can be 1% with no FTF, many cards charge a 3% FTF (Both may incur interest as well) Cash Advance on a credit card is usually a 5% cost (plus possible interest). Getting currency ahead of time from a good source can be as low as 5%, typically closer to 7%, if you use some places as much as 10-15%

In the end, calculate your cost of money for each option you have, try to use the best option, maybe look around and find a different option (A new bank, a second account, a new credit card)

Shop around. I pay zero ATM fees anywhere in the world, and zero credit card transaction fees through two different financial institutions.

The bank didn't "lie" to them; they told her they charge a 3% fee and the OP stated that they had heard ATMs were the best rate. And indeed ATMs are the cheapest way to get cash, even with a 3% fee.

Yes you can open an account that charges little to no fee. You can even "change banks" as one poster suggested. But decide for yourself if that is even worth it. How long will you be travelling and how much cash do you really expect to withdraw? $3 for every $100 is not that much, especially if your new account still charges something. Is it really worth the hassle to open and manage a new account, or change banks where you have all your accounts and auto deposits and withdraws? If so great, but certainly don't feel bad if you decide to just use your bank. 3% is pretty standard and you aren't being gouged.

You can change banks not just because of this one trip but because you are doing business with a bank that likes to lard unnecessary fees on you because it can.

We travel a lot and so it saves us hundreds of dollars over a few years to not be using a bank that thinks grabbing 3% of my money for no reason but that they can is 'fair.' But most of all we don't like to reward businesses that do us like this.

Yes it is not worth changing banks for just one trip, but if you travel a lot it is worth looking around for better service.
And that is not just about the fees.

Bank of American has partner banks throughout Europe. If you go to one of its partner banks, which were easy to locate through England and France, you do not pay an ATM fee when withdrawing money.

That only avoids the $5 fee, not the 3% foreign transaction fee. Up until a few years ago it avoided any fee.