Is the ATM no longer the sure-fire best way to exchange $?

I agree with Chuck and Bob. Whatever charge there is for withdrawing money from an ATM is outweighed by the safety and convenience. Carrying large amounts of cash around is way more risky and inconvient. So, maybe the ATM fees are not the only issue that needs to be looked at when deciding which way to go.

Like you said, do the math. Some banks charge a flat fee plus a percentage for an international ATM transaction - which is why I ditched Wells Fargo. My bank charges a flat one percent, it's pretty easy to find small banks or credit unions that offer a similar deal. Some accounts charge nothing, but those normally come with minimum deposits or other restrictions. An $8 flat fee plus a poor exchange rate seems pretty expensive to me. Many banks will waive fees for their better customers, it's always worth asking, but do you really want to carry a wad of cash rather than get it as you go? A lot of banks also offer free travelers checks. Remember, friends don't let friends carry travelers checks. No one wants them, you can barely get them cashed at a bank, and then you have to visit a bank during their limited hours.

Dina, not sure about States, but here we have banks that will waive any foriegn ATM withdrawal fees if you have a certain type of account. I have one such account , the only condition is I have to keep a minimum balance of a certain amount.
So I think alot of it will depend on which bank you deal with and it will pay to do the research to find the best deal.

My bank does not charge me a fee when I access cash overseas. So the only cost I have is the exchange rate, which, since it is being done electronically, it is a good exchange rate. Just some things to think about if you go this route: If you exchange all your money upfront in the US; depending on the length of the trip, you will be carrying a large amount of cash around. If you plan to spend time in countries with different currencies, you have to carry both currencies (or all 3 if that's the case). What do you do if you spend more than you anticipated? You will need to access cash somehow. What do you do if you spend significantly less than you anticipated? (used credit cards more). Do you hold the excess until your next trip or do you convert it back which results in another fee? Just food for thought. Happy Travels.

Do the math. Most people who make these statement don't know how to do the math or understand exchange rates. I have cards that do not charge any fee so obviously they would be the best. The best exchange rate I have found in the US is arouond a 5% markup. Even if the debit card is adding 3% it is still a better deal As far as I know, the ATM is still the cheapest and most convenient way to obtain local currency.

I've done it all ways. After ripping me off on the exchange rate and charging a fee, my local bank was like a pack of loan sharks. We once exchanged some American Express travelers' checks (many yrs. ago) in Europe at an American Express office. They tore our heads off. A bank ATM is the best rate that you'll get in Europe for exchanging funds. Anytime you have to talk to a bank teller or use an exchange, they're going to get you for $10 or even more. I still try to put rooms, gas and food on my Capital One Visa. Their exchange rate is far above most other credit cards. The main problem is putting enough $ in the checking account before you leave. I have to have a laptop or notebook with me so I can move money around as my retirement income comes from 4 different sources.

All credit/debit cards basically have the same exchange rate when used in Europe. Those exchange rates are determined by the network that the credit card uses. The small differences will be caused by the timing of the transaction on the network.

I suppose it is possible that some banks charge in excess of 4-5% in fees for using a foreign ATM. But I've never seen a bank or travel service offer currency exchange for less than 5% (either in fees and/or poor rate). The exchange rate for an ATM transaction will be within 1% of the interbank rate. That doesn't vary. My bank charges me about 2-3% in fees, including a flat $2 fee for each transaction. So if I withdraw more each time, the percentage is lower than if I withdraw only a little. If the flat fee is $8 to exchange thousands of dollars, then really the only variable is the exchange rate. If their bank gives them a rate within 3% of the interbank rate that day, then they at least break even. There would not seem to be a way to make if cheaper to exchange ahead in the US, unless their bank charges outrageous fees for ATM use. In that case, find a new bank...

As noted by Chuck: " If you exchange all your money upfront in the US; depending on the length of the trip, you will be carrying a large amount of cash around." The rest of the arguements are minor compared to this key feature.

It never hurts to do the comparison, and there might be random cases where exchanging might beat ATMs, but I don't think it can be said accurately that ATM is no longer the best way to go. For most people in most situations, the ATM is still the best choice. And it's a matter of finding a low or no cost card to use. My main account is with a small local credit union who charges me absolutely nothing - and I have no type of special account, just a basic checking and savings account. My other travel account, an online bank, charges 1% on foreign ATM transactions, but reimburses fees from out-of-network ATMs in the States.

A different issue can arise when exchanging through the bank before you leave. On our first trip to Europe we needed cash for an apartment the day we landed. We paid a $7.00 exchange fee at our credit union and they procured our Euros for us. When they arrived we had three 500 Euro bills. It was the biggest headache and worry to get them exchanged for smaller denominations. We actually paid an exchange in Paris to break the bills.

I second what Nancy said. I use credit unions for my personal banking - I belong to 3. I use the checking acct at one CU specifically for travel; they issue a VISA-logo ATM/debit card. They allow ten free ATM withdrawals per month - after which they charge $2 per withdrawal whether it's in Peoria or Prague. There is NO additional fee for foreign ATM uses. For foreign currency ATM withdrawals there's the standard VISA 1% currency conversion fee. Period, that's it. That was my experience 2 years ago when I used the card at ATMs in the UK, and I just now confirmed it by reviewing that CU's current fee schedule. I think that if your checking account is at a bank that hammers you with an "ATM fee for overseas withdrawals," in addition to the 1% VISA conversion fee? You should find a federally-insured credit union, read their fee schedule (it's online although sometimes you have to root around for it, or you can call them and ask), and sign up if they don't charge extra fees for ATM withdrawals in other countries.

" after doing the math, they will come out ahead by exchanging money in the US at their respective bank" They might deal with the wrong bank. That statement is not true for most banks (at least yet). In May (and I have not been sent any required notice that they have changed the conditions of my account), Wells Fargo was charging 3% over the Interbank exchange rate for foreign ATM withdrawals plus a $5 fee which amounted to 4%, total, on a ~$500 ATM withdrawal for foreign currency. With the right high balance (PMA) account, you get two absolutely free foreign ATM withdrawals per month. At the local branch, WF wanted 5% (set early morning, might vary during the day) over the Interbank rate for Euro. I've done some checking, and WF's rate for Euro is the best I have found. B of A was about 5½%, Travelex was 10% or more. But be careful, less used currencies, like Czech Koruna, are more (14% for Koruna at WF). I just checked the website for 1st Bank of Colorado, a local bank with no foreign exchange operation. They charge 1% over the IB rate plus have a "foreign" ATM fee of about $2, same as for any non-1stBank ATM withdrawal. That's 1.4% on a $500 international withdrawal. I made on withdrawal of Euro in May and got that rate.

Next time I see someone post something about getting a better rate at their bank in the US because of high ATM fees, I guess the appropriate response will be "find another bank" ;-) Lee - thanks for providing those examples. It reminds me that I need to review the fees charged by my bank here in France. Their rates probably have changed, and unless I go to the branch and ask, I'd never know.

I agree with the others - do the math, keep up with any changes your bank or credit union might make, and pay attention to your bank statements to make sure all the fees are correct. My credit union charges $1 per foreign transaction, which is fine by me. (I still prefer to buy some local currency here before my trip.)

We checked with our local bank here at home regarding their fees. They charged me $1.50 per foreign transaction, and I made 6-7 ATM withdrawals while in Europe. In Paris we used Paribas Bank ATMs and in Italy we used whatever BancoMat (ATM) we could find. No fees charged to our card from the European banks, and still only $1.50 per transaction from my bank. We exchanged a small amount of currency before we left home for incidentals, and we planned our currency exchanges in Europe accordingly. The Eurpoean ATMs are the best way to get a good exchange rate and carry around minimal cash. We also found that the Capital One Venture Card was the best credit card to use, as they did not charge a foreign transaction fee. Happy Traveling!

I'll be honest, if there is any subject on this board that makes my head spin it is this one. Personally, I'm on the ATM team, banks are going to get a part of your money, that's why they're in business, no problem with that, on the other hand I fully understand someone not wanting to give them anything. Seems like a never ending cycle with this subject. I hope I'm not the only one that feels this way.

Best invention ever (for international travel): The Jet Plane
Second best invention ever (for international travel): The ATM

The subject does get presented and discussed a lot but it is really pretty simple. The debit card at an ATM is the cheapest and most convenient way to obtain local currency. No one has every identified a cheaper place to obtain Euro in the US. Even with bank fees it still is cheaper just not as cheap as no fees.

I agree to have some of that countries currency when you get there. Last may I ventured into the Czech Republic from the Bayerische Wald. I had a rail pass for the German side that I got with my room there, but I had to buy a ticket to Prague at the station in Zelezna Ruda, on the border. I had checked before and the ATMs in Zwiesel did not give Koruna, so I bit the bullet and picked up $40 worth of Koruna in Denver at 14% over before I left. That got me to Prague where I used an ATM to get more. When I come back from Europe, I always bring along several hundred Euro so I will have some when I return. And, don't forget, there are fees and there are exchange rates. You'll probably get "charged" both. Fees are a per transaction charge, but ATMs rarely give you the exact international exchange rate. The other charge is a percentage discount from the Interbank rate. That is, instead of getting the exact amount of Euro for your dollars, the bank will give you 1%-3% fewer Euro and keep the difference. That's how they make money.

Remember the famous saying, "absolutes are always wrong"? The ATM is almost always the best, easiest, and cheapest way to get foreign cash. Can one find situations when it is not? Sure. But most of those are "exceptions that prove the rule" - unusual situations that just emphasize how, if one is not in an unusual situation, the ATM still wins. Of course, one has to check fees. And, I wouldn't be surprised that at some point, the banks figure out a way to change the system to the point that the ATM is no longer the way to go. But for now, it is.

" the banks figure out a way to change the system to the point that the ATM is no longer the way to go" Right now, with a 3% exchange rate and a fee of at least 1%, using some banks' (WF, Chase, USBank, etc) ATM cards is going to cost you at least 4%. OTOH, WF sells Euro at just 5% over. If those banks decide to raise their exchange rates by 1%, ATMs will no longer have a financial advantage, and you might want to get Euro here and take it with you. This would provide convenience by not having to find and use ATMs every few days or worry about cards not being accepted. Some people bulk at carrying large sums of money, but think about it. If you carry you ATM card(s) in the same place as cash, and lose the cards, you are in deep, deep stuff. Without a card, you can't get any more money. However, I use a local bank that only charges me 1% plus $2, so they will have to increase their rates an awful lot before ATMs are not a better deal.

Just steer clear from Capital One banking card. They charge 3% plus $2 per usage.

I was thinking about bringing 3000 euros with me. I have to pay for my apartment in cash up front the day we arrive. The thought of finding an ATM and trying to get out a large sum of cash seems daunting. I think it's fine for daily spending money but something has to be said for convenience.