ATM & Credit cards

The Schwab Bank Invest First Visa also has no foreign exchange transaction fees, and it pays you two percent cash back for all purchases. For example, if you charge $1,000, you get $20 back. Not bad.

The only "catch" is that, to get the card, you have to open a brokerage account with Schwab, and you also have to open a checking account if you want to use the cash back money for anything other than buying stock.

Both of the accounts, however, are free, with no minimum balance requirements, if you want to go to the bother of opening them.

I just opened my accounts a couple of weeks ago. So far, I have had no problems with Schwab's customer service -- they answer the phone reasonably quickly, and they are friendly and helpful.

I also have a Capital One card. I have not had to call their customer service, so I can't say how good or bad it is.

Sorry to intrude, but I'm wondering if anyone can answer the original question with a Canadian frame of reference too - I'm also interested in what cards are best and we don't have all the same options here in the great white North :)

I got a Schwab Visa card before my last trip because Schwab doesn't add on the foreign transaction fees that other bank charge. It may be a good choice for a debit card, too.

Capital One absorbs all fees associated with foreign exchange purchases, so in monetary terms, they are probably your best choice. However, I've been severely disappointed with their customer service. A number of their customer service reps have been surly and/or no help at all. So I would have to give a very qualified recommendation for Capital One. We use them only for our foreign exchange charges.

The best debit card for getting cash from ATMs is one issued by any bank or credit union that doesn't charge you for using an ATM outside their system, either in your home country or in Europe.

If you use only bank ATMs in Europe, you will not be charged a fee by the bank whose machine you use. If you use a non-bank ATM, you probably will.

Anneris,
See http://flyerguide.com/wiki/index.php/Credit/Debit/ATM_Cards_and_Foreign_Exchange

I have a Capitol One card and also agree that there are no "extra" fees (the good news) but their customer service is often lacking (the bad news). For more info on ATM's in Italy, CLICK HERE

I normally use my Wells Fargo bank card to get my Euros -- they add a small percentage and a $5 service charge for overseas transactions. On my recent trip to Greece I brought my CitiBank debit card as a back-up and when I saw a CitiBank ATM machine in the Athens airport I used it to withdraw money. Well, my statement came a few days ago and they charged me over $12 to use their own bank ATM for one transaction for 300 Euros! And the exchange rate doesn't look that good, either!
I was totally surprised, since I hadn't done any research ahead of time. Luckily I only used them once. Lesson learned --I'll stick with WF (and Capital One for credit)!

Regarding Sharyn's experience with CitiBank in Greece:

It is true that there are CitiBank ATMs in lots of foreign countries. However, each country's CitiBank, including the US Citibank, is a separate entity with their own rules. So, using a US Citibank ATM card at CitiBank in Greece is considered a foreign transaction, for which fees apply.

The only way not to get charged for using a CitiBank ATM in Greece would be to have a Euros account with CitiBank, either in Greece or in Europe (Spain, Belgium, Germany, and the UK). That's because all the CitiBanks in the Euro Zone have an agreement not to charge Euro Zone Citibank customers.

Still, however, even with this agreement, each country's Citibank is still separate. Like, if you have an account with CitiBank in Spain (which I do), you can withdraw money from CitiBank ATMs in Germany, but you can't go into the bank and make a deposit, or withdraw money from a teller, like you can in Spain.

I just went to England a couple months ago. I found by accident that some retailers have the option of running a transaction as an American transaction which meant there was no conversion fee or transaction fee. Some retailers in England would ask if I wanted the transaction run as an American transaction. I asked one what that meant and he explained the no fee aspect of it. I don't pretend to know any more about it and it tended to be larger transactions. It probably has to do with who your credit card vendor is. I was using a bank card. On our hotel bill it save a couple hundred dollars.

Darrell, you probably were taken. This has been discussed before and it borders on a scam. It is called dynamic conversion. First, you probably received a very poor conversion rate to US dollars. Second, a credit card which has currency conversion fees will treated that as a foreign transaction and still tack on conversion fees even though it is present in US dollars. If your credit card does not add the fee, then of course, there were no additional fees -- only the exchange rate. It is most likely that you paid higher fees this way than if it had been charged on your credit card in pounds.

The general recommendation is that charging in US dollars should be avoided at all costs.

Darrell, is what happened to you Dynamic Currency Conversion (DCC)?? I've read online that DCC is Not good for travelers, ex:
http://en.wikipedia.org/wiki/Dynamic_currency_conversion

A hotel by Heathrow did this to me, the slip was for $82. I insisted on signing a slip in pounds and the clerk finally did run that for me (void the DCC charge and do a charge in pounds).

Granted, I have a Capital One cc, still with no foreign transaction fee, so the final charge on my next bill was for $79, the charge in pounds converted at the rate of that day.

It is great that you saw a savings, though probably still something to watch for most.

A general rule followed by experienced travelers is that you should avoid offers from merchants to charge your credit card in U.S. Dollars in a foreign country that uses another currency, such as the Euro.

There are, however, exceptions. In countries with weak local currencies, such as in Central America, merchants often prefer to deal in Dollars, and you may find that the amount of the charge in Dollars that they suggest saves you money versus using the local currency.

The only way to be sure you are getting a good deal by paying in Dollars is to independently verify (like, in a newspaper or online at xe.com) what the current exchange rate is when you make your purchase, and calculate if the proposed Dollar amount of the charge is actually saving you money.

I used my Capital One for Europe. Got good rates on the trip. No problems. Their customer service is outsourced and I'll leave it at that.

Washington Mutual/Chase charge 1% for withdrawals. Really not that bad. And I didn't get hit with any fees in Europe to use bank ATMS. Plus, you'd be surprised at how necessary cash is in Europe.

I only ran across the conversion to US on the credit machines in Dublin. Was really upset that the hotel did that to us. It definitely cost me a bad exchange rate but they refused to do anything about it. On small bills it's not too big a deal but on large bills it really starts to hurt. Avoid at all costs.

Thanks for all of your suggestions! Has anyone used a Capital One debit card?

Hi Anneris,

I have a money market fund with Capital One Direct Banking. With the account I have a regular flavor of ATM card, not debit. Looking at the Direct Banking web site I cannot see that it is possible to get a debit card with the online services, perhaps you need a physical location to access a checking account for a debit card (that's an assumption on my part because the debit card I do have is for a checking acct at a local bank).

For my trips to the UK the Capital One ATM card has been fantastic! The exchange rate seems to be the interbank rate and No Fees (I make sure to use it only at bank ATMs so no fee from them either).

Now, using it at home I would need to find a Capital One branch to use the card with no fee and I've none anywhere near me so I keep it for travel.

The other nice thing about the Cap One money market account is the interest rate is higher than my local bank (even as low as rates have gone, it is still a bit higher).