ATM article, commissions on the rise!

There was a new thread about this started yesterday:

https://community.ricksteves.com/travel-forum/budget-tips/christopher-elliott-article-on-atm-fees

Thanks Andrew for pointing out the other link. Believe I will leave this up for a few days so folks can become aware from several sources and also use your link to find the other post.

This is certainly true in Sicily, as I mentioned in my recent trip report. Euronet and others are all over the place and we actually had to search out a bank to get cash in a few cities. While I don’t think there was anything untoward on the part of the TI staff, we were nevertheless pointed to these machines in the majority of cases. They certainly are more conveniently located, but could it be that they just don’t know the difference?

The main counter to this is that it is less and less necessary to have ANY hard currency in Europe. We were just in Italy. We spent 1/20 of our total expenses using cash. The rest was all credit cards. These are accepted everywhere save a very few locations. I did not try to use a card for the E1 toilette fee. But cafes, restaurants, gelato, bars, all took credit. So, plan on withdrawing smaller amounts of cash, and using credit for 90-95% of expenses.

My experience is the same as Paul's. In Italy this month we used cash almost exclusively for all purchases large and small. We arrived in Venice with 20€ and didn't use it until later that evening I think just to have some coins. Still haven't seen a busker with a card reader though!

Came across a busker in Rhode Island with a sign giving his Venmo info! That may spread...

I gotta get out more.

Brad

I just came back from London and felt royally ripped off by the rate of exchange in the ATM. Honestly, the money exchanging places were offering much better rates and I wish I had used them instead.

Paul, try visiting Croatia. I just got back. Many restaurants are still cash-only, including some sit-down restaurants not just fast food. Some sobe (B&B) are cash-only also. You can hunt around and try to restaurants that take credit cards, but on one of the islands, there weren't many restaurants and the one where I wanted to eat was cash-only. I'm guessiing most of the others were too.

I think I was charged 35 Kuna for an ATM fee (about $4.50 USD) each time I got cash from an ATM. I'm glad all fees were refunded by my bank.

If you look at Rick's Travel Tips for ATM's, you will se that Rick says NEVER use an ATM that is not linked to a bank because the commercial ATM's have high rates and fees. Likewise when using a credit card NEVER accept the gracious offer to have the amount converted to dollars unless you are really fond of terrible exchange rates.

We just got back from a month in France and Switzerland and while we only used ATM's a couple of times we always used a bank ATM and the rates were good.

Every ATM I used in Croatia and Slovenia was part of a bank - sometimes the ATM was in the bank's lobby. (Explicitly avoided Euronet - I saw them often.)

Every ATM I tried (I tried several) wanted to charge me 35 Kuna as a service fee. There was clearly no way to avoid a fee. (As I said, all ATM fees were refunded to me, so it didn't cost ME anything...but many people would have to pay the fees.)

In 2019, we were charged a 5€ service fee at each bank-owned-in-the-lobby-ATM we used in Sicily. The applied exchange rate was a different issue.

But its always been my understanding that ATMs at airports and other public locations had to pay (a lot) of rent for their prime space. So I dont begrudge them charging a fee for operating and maintaining that machine. They're not performing a public service, and if you're not a customer, neither is a bank. I dont like it either, but accept it.

The ATM-fee situation varies from country to country, and it has deteriorated over time, just as the push for dynamic currency conversion has gotten stronger. I'm not surprised that we've reached the point that in some countries, it may be impossible to find a no-fee ATM. Fortunately, the need for cash is declining, so we won't be as dependent on ATMs as were in the past.

Norway is a country where cash is seldom used; there were more places refusing cash this summer than places refusing to accept cards. (There was at least one situation in which I had to have cash--a luggage locker in a train station.) One could wear out one's shoes in Oslo while looking for any bank-owned ATM. I did finally find one, but there was a line of at least a dozen people waiting to use it. It was my impression most of the folks in line were locals.

The other problem with these non bank owned ATMs is that they are MUCH more likely to be compromised. So in addition to the fee they could have your card and pin info. Just walk away!

Euronet, an ATM company with 50K machines in 63 countries, is charging
a $4 fee plus a 12% markup on the exchange rate plus a commission.
Outrageous!

First, always try and use bank ATM's as the rates and the fees are lower (or often $0 or reimbursed by your bank).
Second, let your bank do the exchange, not the machine for a better rate.
Third, "outrageous"; okay, but I save that term (and similar) for situations where I am being forced to do something.
Euronet is a for profit company and as such will charge based on return (charge too much or too little and loose money) and the reason so many exist is that they can survive in lower use environments because of the fees.
Without the fees they would not exist and you would be back to hunting for a bank ATMs (which you should be doing anyway).
So, when I need $$$ quickly to tip the service provider inside and there is a quick convenient Euronet machine outside, then I appreciate them an dont worry about the fee; when I need cash for the week, I go to the bank.

To echo what others are saying, always avoid Euronet machines unless you have no other choice. I got caught out once in Austria where the bar was cash only and the nearest bank was a 15 min. walk.

Most recently in Italy, I was able to find free ATM's very readily. Of around 6 attempts, 5 were no fee, and 1 wanted a 5 euro fee, so I just passed on that one. The key seems to be to pick lesser known banks and anything like "Banco Populaira" that may indicate a credit union.

On the general subject of currency conversion, make sure to have at least one credit card with a 0 fx fee. Lots of them charge fees of 2.5% plus on every transaction.

My credit cards charge a foreign exchange fee on transactions. On a busy day, the total might exceed the ATM fee for withdrawing cash. In banking, there is never, or at least rarely, a free lunch.

So, now I have 2 questions about this that is easier to ask here than figure out for myself.

I rarely use the Euronet machines; but I did once this fall, using my Cap One debit card. Yes, the machine warned me of the fee. But on my statement, I only have one withdrawal - showing the dollar amount. So is Cap 1, which says it has no international transaction fees, eating the cost of the Euronet fee? Or is it just rolled into one amount? If I use my Chase debit card (which I almost never do because of the fees), the withdrawal amount and the fee are shown separately.

Also - I made 3 withdrawals in Poland: the first 2 were bank machines, with the third being Euronet. There was a definite difference in the exchange rate (I guess) in the second withdrawal (highest difference and smallest amount of cash) but almost no difference per 100zl in the first larger withdrawal and the last Euronet withdrawal. I guess this isn’t really a question, though…..

I can ask Cap 1, but thought someone here might know. And it’s just curiosity - I used it because it was a small amount and I didn’t want to walk and was willing to pay the fee for convenience. So the answer won’t really change my actions.

Capital One's no-fee ATM/debit cards used to refund fees charged by ATMs. As far as I know that's still the policy, but Capital One is my back-up card, and I haven't needed to use it in the last few years. Also, I make a point of finding no-fee ATMs anyway, because I figure if customers stick Capital One, Schwab and their credit unions with a lot of ATM-fee refunds, those institutions may decide to eliminate that customer-friendly policy.

I'm not clear on what you're saying in your second paragraph, but it's been my observation (more in 2019 and earlier years than this year, because I barely used any ATMs this year) that some ATMs charge flat fees (same for all transactions), some charge percentage fees (increasing with amount of withdrawal) and some charge a combination of flat fee plus a percentage. Could that explain what you observed?

if customers stick Capital One, Schwab and their credit unions with a lot of ATM-fee refunds, those institutions may decide to eliminate that customer-friendly policy.

I suspect (without having done any research) that the cost of maintaining a network of ATMs outweighs the cost of rebating the fees. And they are able to provide that benefit across a far more extensive "network" of ATMs than they might otherwise deploy themselves.

acraven, I also normally choose a no-fee ATM and had done so the first 2 times.

For my second rather incoherent point, I did simple math based on how many zloty I withdrew and how much my debit account charged in dollars - and compared the dollars per hundred zlotys. 500zl the first time at a bank ATM, 200zl the second time also at a bank ATM, and 300zl the final time (which was at the Euronet machine right outside my hotel which DID tell me it was charging a fee). The first and third comparisons were almost exactly the same. The middle time was about $2/100zl more (so an increase of $4). I neglected to actually remember the exchange rate itself, since I needed cash and was going to get it anyway (and have now thrown away receipts).

So in this one instance it looks as though Cap One covered the fee - but it also does NOT look like I had a worse exchange rate for the Euronet machine. I would certainly not extrapolate anything from this - but it surprised me.

I think there can be variation across the network operated by the same bank or other entity. I suspect there may be busy Euronet machines in high-traffic locations that make so much money from tourists who don't realize they should avoid dynamic currency conversion that they don't need to charge a fee. That's just a guess.

I used what looked like a non-bank machine in Oslo that didn't charge a fee, to my great surprise. It was around the corner from a storefront exchange agency, across the square from the train station. Lots of foot traffic in that area.

TexasTravelMom, you did it right. Its not about the exchange rate or the fee, its about how much you get on the dollar; the rest can be a shell game.

But realistically this tends to be overthought as most are using credit cards for the bulk of their purchases and the cash outlay on a trip is pretty minor; so it cost an extra $4 not to have to run down the street to a bank?
That $4 on the cost of a 10 day RS Tour for two including airfare is in the neighborhood of $7,000+.
Use the Euronet ATM 5 times and you lost $20 or about 1/4th of 1% of the cost of the trip.

I find it somewhat amusing that the article omits to mention that Euronet is an American company based in Leawood, Kansas. Stephanie Taylor is also rather more than a nebulous 'spokeswoman'; she is a Vice President and Corporate Treasurer.

The USA has had widespread ATM charging for far longer than I can remember being the case in any European country. I think many domestic users don't see charges through networks, alliances and fee refunds which international travellers by and large don't qualify for although there are some cross-country agreements. I can for example use my Chase UK card free of charges in any Chase USA ATM.

DCC is also offered at many ATMs in the USA by banks and non-banks alike to non-USA cards.

..."try visiting Croatia" Very good suggestion. My friend in Austria told me that based on his experience and that of others if one does not know the native language, English is not the only lingua franca to fall back on. One can go ahead and use German since that is widely spoken and used as the second foreign language by the locals, depending on the interlocutor. Numerous Croatians are better at German than English, in which case English is their second foreign language.

Good to know that in Croatia there is still the preference for cash at many eateries, just as in Austria and Germany. It will stay this way. I know of such places in Vienna both in so-called tourist areas and non-tourist areas.

Fred, I have been to Croatia three times, and I have gotten by just fine with English. I don't speak German.

Do Croatians Speak English? The majority of Croatians speak at least
one other language. According to a recent poll, some 80% of Croatians
are multilingual and, of that group, 81% are English-speakers. The
next most popular language is German at 49% followed by Italian at
24%.

Euronet is an American company.

Does not change any facts; still convenient during some late night escapades.

Since Croatia was part of Austria-Hungary 100 years ago, there is a residual German population. The "Schwabians" also (my mom's ethnic heritage) lived there too. I've been to at least one restaurant in Zagreb where German seemed to be the Muttersprach. I used a little German there, and that was received well. Croatia is a tourist economy on the coast, and the language of tourism today is English.

Not always obvious to tell if an establishment is "cash only" unless that is stated in the menu. I don't ask since I pay the vendor cash anyway. I know of 2 "cash only" places in Berlin, my Pension and an eatery in Bahnhof Friedrichstrasse.

In Vienna I made a list of restaurants where "cash only" was the policy. I think 5 restaurants are listed.

@ Andrew.... No doubt, one would get along just fine using English in Croatia. The question is then what if the visitor does not know English or it's so limited that s/he hesitates or declines to use it. What then? I have yet to go to Croatia but my friend above was there this summer, first time too, liked it, and he's fluent in both English and German. He had no problems at all communicating with the locals speaking only in German. I would do likewise, or speak whichever language the interlocutor prefers or feels more comfortable with.

For another data point, spent most of September in Spain, did not use ATMs much, maybe 4 times. All were major banks, all but one offered DCC, and two of the four charged a use fee. The fees offered were significant, a Suntander ATM wanted 7 euro to withdraw 140 euro, a Caja Rural ATM wanted 6 euro to withdraw about the same. Like others, my travel card refunds ATM fees, I try to avoid them, but I will not go to multiple ATMs to avoid them (Just ruled out Santander ATMs the rest of the trip).

I think the advice to use only Bank ATMs attached to a bank is outdated, sure if you see one, use it, but I would not wander for some amount of time looking for one, passing up other options. The very fact that we are using less and less cash makes it much less of an issue, you can pretty much pick and choose when and where to get cash as you go about your day, I can recall needing to make a daily cash withdrawal (mainly due to low daily limits), so limiting fees was a big need.

Edit: For credit card use, I would say DCC was offered the majority of the time, even on some tap purchases. The staff handling the transaction were as annoyed by it as I was, and many times would prompt me to hit euros, or do it themselves.

Just to emphasize how bad the exchange rate is if you were to select dynamic currency conversion …

The bank ATMs (MBs) in Portugal all pushed DCC (you had to decline the conversion twice after getting dire sounding warnings that the exchange rate would not be guaranteed). I took note at one of the ATMs that they were ”offering” to charge $224 for my 200 EUR withdrawal. I just got my bank statement and my bank charged $198.34 for that transaction. That is about a 13% fee that would have been paid if DCC had been selected. I am sure they make a lot of money on tourists who are not familiar with DCC.

FWIW: In Spain, they would give the amount that would be charged in USD if you accepted DCC, by my quick math, it ran about a 5% premium, maybe a bit more.

I have seen the "warning" about the conversion rate being "unknown" if you do not accept the DCC, this is true...but it is a lot less, for most, than what they want to charge.

Also just my opinion, but I doubt the merchants make anything on the deal, as has often been discussed, just judging by the number of people that prompted me to pick euros, or just declined for me out of frustration. Now I do believe there may be some clever bank reps that have convinced some that it is better for visitors to choose their own currency, but not many that I have seen.