Debit cards and ATMs

Are you with BECU? Their credit card has zero foreign transaction fees. And their debit card charges less than 1% as foreign transaction fees. That is, a withdrawal of $100 cost 77 cents.

It is really best to have one of each rather than using a credit card to withdraw cash from ATMs or using a debit card for purchases ( although my husband's credit Union Verity rewards him for using the debit card for purchases and there is no charge.

Your main need is to use your current debit card for ATM withdrawals, which is not really an issue. That's what it's meant for and it works all over Europe in machines with matching logos (such as Visa or MasterCard, and other logos on the back).

I've also used a debit card for purchases in Europe with no problem, e.g., when that was the one card I had accessible in my wallet for the day. It's also sometimes worked when other cards didn't.

"As I understand it, cash is the preferred method of payment."

This is changing; more and more places will accept credit cards. Cash is certainly necessary in some situations. For this you would use your debit card at an ATM, as Laura said.

You don't use your debit card as a credit card (meaning for purchases); you use your credit card as a credit card. Similarly, you don't use your credit card for cash advances; get cash with your debit card. As Laura said, exceptions are just that - exceptional. In a pinch, you can make a purchase with your debit card, or get a cash advance on your credit card, but these should be back up methods only.

You can't easily open a bank account in Europe, and you don't need to. Your credit union probably has low or no fees for foreign ATM use. If it does have high fees, you can get an account with a different credit union, or with Charles Schwab online.

For more great money tips, read all the links on Rick's page, and you'll be an expert: https://www.ricksteves.com/travel-tips/money

Jenny - Your credit union may be blocking the use of the debit card outside the U.S. You need to call them in advance of any non-U.S. travel and they'll allow for use in the countries you'll be visiting. I can do this online with both the credit union and bank that I use.

What Harold says is important and does confuse many people. Outside the U.S., only use debit card to withdraw money from ATMs. Credit card is for purchases. I take two of each, just in case.

Also, I find it unusual that your bank charges you to use a debit card for purchases as a credit card. My bank actually gives cash back if I select "credit" when using a debit card for purchases. They get higher fees this way. I don't do this because I only use a credit card for purchases so I can get better rewards offered by other cards. Double check with your bank.

Jenny,

FWIW, I can't use my Canadian debit / ATM card for POS purchases in the U.S. - only ATM withdrawals. It's not a question "that Canada won't allow debit card usage of US debit cards", but rather that not all financial institutions have set up the data networks to allow that yet.

To keep it as simple as possible, you will not be using your Debit/ATM card as a credit card in Europe, use a Credit Card for that purpose, if you have no other card, I suggest trying to get a credit card, look for one with no Foreign Transaction Fee and no annual fee, there are plenty.

You also will not use your Debit/ATM card for POS purchases (Grocery or other stores, you would use a credit card for that.

You will use your Debit/ATM card to go to an ATM to get cash. For that, ask your Credit Union if they support use in the countries you are going to, and if so, what fees there might be. My Credit Union charges no fees or Foreign Transaction fees, some banks may charge a fee for use of a non-network ATM ( maybe $5) then a Foreign transaction fee of maybe 3% of the withdrawal.

If you have problems with your current bank, many look at online accounts; Capitol One Bank, Charles Schwab Checking, and Fidelity all offer services and have excellent rates with the bonus of no daily withdrawal limit.

As a general recommendation, I always travel with at least two different credit cards, and two different ATM accounts, you can get by with one, but I like the security of a backup.

so that I can use my debit card at ATMs without being charged a fee?

And just how do you think you can get euro to deposit in that bank without paying a fee?

If you are in the US, I suggest you open a Schwab brokerage account with a checking account associated. Get a debit card for the checking account. Then deposit funds into the brokerage account. (You can't deposit funds directly into the checking account.) You can transfer funds from the brokerage to the checking account OR you can just wait for the overdraft protection (no fee) to sweep the funds from the brokerage account to the checking account. as you use your debit card. No ATM fees. Any ATM fees that are charged by any financial institution are reimbursed by Schwab, so don't be afraid to use the ATM when you are warned of a fee. You receive the best exchange rate available at the time of use.

If you decide to go this route, explain to the CSR at Schwab your intentions...they will know the specific account products you need.

It's the best!

ATM Cards and Debit Cards are not the same. An ATM (Automatic Teller Machine) card is tied to your bank/financial institution account and is intended to work at your bank's ATM for deposits and withdrawals. You may also have cash withdrawal privileges at ATMs operated by financial institutions other than those affiliated with your financial institution subject to fees and conditions.

A Debit Card (typically having a Mastercard or Visa logo) operates similar to that of an ATM card in that cash can be withdrawn from an ATM terminal. The Debit card is typically attached to you checking account or similar demand account and can be used at cooperating Point of Sale stores etc. An ATM Card that is not a Debit card does not work for POS transactions.

Debbie gave good advice about the Charles Schwab Investor Checking for a Debit card. This has no foreign transaction fees and no ATM charges.

There was a slight error in the explanation of how to open the account. You do need to open a brokerage account in order to open a checking account, but there is no requirement to fund the brokerage account once it is open. You can open the account with no funds and then deposit directly into the investor checking account.

I use this account exclusively for my "travel money" I save up in it during the year and have the money available for my trips. I've used the card in Europe, Africa, and Canada with no problems.

This is changing

In 30 years of travel to Germany, I haven't seen much change, if any, at least in the economical accommodations. I wouldn't know about high priced places.

I use cash from ATMs for everything. I don't think I have used a credit card an average of once per trip.

In 2009, I walked to the Freilassing Bahnhof to buy a ticket to Salzburg Hbf. It was early morning and the ticket counter was not yet open and the (1st generation) Bahn automat didn't take cash, only cards. I had to charge a 2,20€ train ticket on my credit card.

Hi,

True that Germany is still more cash based than other countries in Europe. In Germany I don't believe you'll be charged 2-4% extra for the luxury of using a credit card. Thirty to forty years ago you could have trouble buying a train ticket at the ticket counter with your Visa or MC. Now no problem if you choose pay for a DB ticket or seat reservation with a credit card. As for the preferred mehtod of payment, say at food vendors in Germany or Austria train stations, I look for the credit card machine when it's time to pay, mainly to see if it is there, since for meals at the station food court, I pay with cash. You'll see practically everyone does likewise.

Keep in mind that in Germany an establishment will say it accepts a credit card, you hand over your MC card, it's not accepted, then you're told that only EuroCard is accepted, even though MC and EuroCard are the same, still they won't take your Mastercard. In Vienna you'll see lots of tourists pay with a credit card at meals, hotels, museums, etc.

Is it really worthwhile opening a new bank account and then either closing or maintaining the account, just to save a few dollars in fees? You will probably charge your major expenses, lodging & long distance transportation costs. The remaining costs typically aren't that much, maybe one or two ATM withdrawals per week.

It has been 4 and 7 years since traveling to Germany. We traveled with a German friend on our first trip and did see that he used cash for his meals while we used an American credit card for most of our meals and those were in the magnetic strip days. We did use cash at Kuchen and coffee stops and Euros were accepted without problem.

We also used American credit cards in our more recent Austria and Switzerland trips and can say that credit cards were generally accepted without comment or complaint. My zero FX fee Capital One is the economical FX option.

My credit union Debit card charges a 1% foreign transaction fee for cash withdraws, displaying the fee as a separate line item. Given that I can use my credit card (Capital One) for most including major expenses, the 1% fee on a couple of hundred Dollars or Euros is not a big deal. The bigger loss is the unspent FX. I don't worry about having FX on arrival but like to have FX to get to the airport. (I hear that my 1 GBP coins will soon be worthless).

I have a similar problem Jenny. My debit card is from a local credit union - one that I truly like. However, their debit card is nearly useless in European ATM's. On a recent trip, my card could only be used in Germany ( we were in Hungary, Slovakia, Austria and the Czech Republic in addition to Germany ). My debit card will have no ability on our next adventure ( Romania, Bulgaria, Croatia, Serbia ). My credit union apologizes for this, but states they are too small to accept the risk of fraud.

Suggest Schwab debit card. See other posts about the advantages.

Blue439, how do you know if your debit card is useless? I will be traveling this summer and was planning to take my debit card and cash because I don't have much in the way of credit. I'd hate to get there and find that my debit card doesn't work!

Aligunter:
...how do you know if your debit card is useless? I will be traveling this summer and was planning to take my debit card and cash...

Read: https://www.ricksteves.com/travel-tips/money/questions-to-ask-your-bank

Before your trip, notify your credit-card company and your bank (for
debit cards) that you’ll be traveling in Europe. This will ensure that
they don’t decline your foreign transactions. While you have them on
the phone, ask these questions:

The Basics:

Will my card work in the countries I’m traveling to?

What fees do you charge for withdrawals or purchases made in Europe?
Is it a percentage, a flat fee, or both?

Are other currency conversion or foreign transaction fees tacked on?

If my credit/debit card is lost or stolen, what is my liability?

What phone number should I call if there’s an emergency?

Specific to Debit Cards: What is my daily limit for ATM withdrawals in
Europe? (Change your limit, if necessary.)

And have a back up debit/ATM card/account if possible.

Thank you Edgar!

I didn't see any other comments on a travel card... We used a travel card when in Europe for 13weeks, and just kept loading it up every so often via internet banking. Our travel card from here in Australia didnt have any normal transaction fees, and there was only a very small fee for the internet transaction loading and only a 50cent fee for drawing out at ATM's...
My research found this so much more cheaper than using my bank credit cards or debit card...

Gary: Apparently, in Australia you can get pre-loaded cash cards that do not have high fees for overseas use. This is not true in America; the cards we can get have high fees, they have separate fees for EVERY thing you do with them (loading money, checking balance, withdrawing money at an ATM, point of sale purchase, foreign use, etc), and there are reports that they sometimes don't even work at foreign ATM's, despite the promises. Furthermore, as you see from the responses above, we can get credit and debit cards with low or no fees. So, that's why no one mentioned it - at least for US and Canada residents, credit and debit cards from places like TD Bank, Capital One, Charles Schwab, credit unions, etc are the way to go.

However, your post is a good reminder that different countries have different systems, so what works best for travelers from one place may not work best for others.

See https://community.ricksteves.com/travel-forum/budget-tips/aaa-visa-travel-money-card-mc-cash-passport-card

@ Gary: If the MasterCard Load&Go Travel Card is an example of a "good" Australian preloaded travel card, here are some of the details: the exchange rate say for euro is .6292 versus .68 interbank rate, there's a 2.50euro charge for each ATM withdrawal, a load fee of $5AUS and a cashout fee of $10AUS.

I sure would hate to see the fees on an Australian bank debit card if the travel card is a good deal for someone from there!

The issue we have with pre-loaded cash cards in the US is that they do not fall under the government's banking regulations. They are consider gift cards and not financial instruments such as debit and credit cards and, therefore, are not subject to full disclosure of terms that apply to debit and credit cards plus other requirements. And there is little protection for the pre-loaded cards other than what the card issuer promises. So if you lost it, you will not have the same protection that you would have a standard debit or credit card or recourse against the issuer.

Given the widely available access to low cost/no cost debit cards in the US, why would anyone consider a pre-loaded card? Only reason I can think of is if you have extreme bad credit that would prevent you from obtain a debit card. All things being equal there is absolutely no reason for using a pre-loaded card.

I have a pre-paid AAA "Travel Money" card, I use it, and here is why....my personal banking is conducted at a small community owned credit union. It is a wonderful institution with zero banking fees. However, their debit card has almost no international use capabilities. They are a small institution and claim they cannot assume the risk of fraudulent use.
As a result, if I need cash in a foreign land, my options are.....bring foreign currency with me, bring US cash with me and change it at a local bank or use my AAA Visa credit card to transact a cash advance. There are drawbacks to each of these options, as there are with the "Travel Money" card.
The "Travel Money" card costs $4.95. There is no fee to load the card, which can be done with cash or debit card at my local AAA office. The fees for use of the card are $3 each transaction plus 3% of that transaction.
In a real life use, if I bought the card ($4.95) and loaded $300 on it, went to Iceland and used the card to withdraw $200 in Icelandic cash from a bank in Reykjavik, that $200 would cost me $4.95 (cost of the card...a one time fee), plus $3 (use fee) plus $6 (3% transaction fee). My $200 cost me $13.95 and each additional $200 withdrawal would cost an additional $9 (use fee $3 plus transaction fee of 3%).
It would be foolish of me to open an account with a more sophisticated banking institution just to have international debit card access. It would've foolish of me to frequently use my AAA/Visa card for cash advances.....that is very fee driven. So, in my somewhat unusual - but not unique situation, the AAA Travel Money Card is my best option. I don't use it often, but it has proven to be helpful.

Blue, I suggest you widen you views of what is available before deciding a pre paid debit card that'll cost you $9 a withdrawal is the best option!

I have an account with Capital One 360 that has a debit card that allows me access to cash anywhere in the world without paying any fees to Capital One. It was opened online and is available to anyone with a US address. There are no fees to open the account, there are no fees to maintain the account, and the account stays open as long as it has a positive balance. You can initiate an ACH transfer from the Capital One side at any time to fund the account as needed also at no charge or any need t visit any physical office. (Using ACH means most banks will not charge you to pay out the money to Capital One.) When you open the checking account, you get a MasterCard Debit card which allows cash withdrawals at nearly any ATM in the world without paying fees. (The ATM owner might charge a fee, but Capital One never does.) You receive money at the current bank rate as you find on Google. Oh, and the account which holds your funds until you withdraw them from an ATM on your travels also pays interest which is around 10 times what the banks currently pay in the US.

In over 10 years of travel to Europe I have paid exactly $0.00 (that is absolutely zero) in fees to Capital One 360 and even made a couple dollars in interest. Capital One is only my travel account, I have another account elsewhere that is my main account because like you I find that other bank to be a friendly local hometown kind of place that understands most of my banking needs.

So, what then is the better option? Paying a fee after fee after fee? Or paying absolutely zero in fees?

You can use debit as well as credit cards in Europe.
If your cards do not have chip-and-pin technology, you will have to sign your name.
It's best to acquire a debit or credit card before leaving for Europe.
It's extremely difficult - in fact, impossible - for foreigners to open bank accounts in Europe.
There is usually a minimum amount required for debit or credit purchases - normally 10€ in France.
Take out the maximum daily amount every time you use ATMs, to avoid paying more fees than you have to.
You can also order foreign currency from your bank before leaving. 200 - 300 of any denomination should be enough to get you through a couple of days.

You can also order foreign currency from your bank before leaving.

My credit union doesn't do foreign currencies. If you ask, they'll politely tell you they've made arrangements so your Master Card-branded debit card will work perfectly nicely at more than 2 million ATMs around the world and expenses are lower in the long run for everyone that way compared to them getting foreign currencies for members directly.