Capitol One Credit Card vs. Citibank ATM -- hidden fees?

You might check to see which banks in Italy own Citibank (or which Italian banks Citibank owns, either way). If you use an ATM of these banks, you shouldn't be charged a fee. Because of Citibank's relationship with Targobank, a German bank, Targobank account-holders can use their cards at Citibank ATMs and aren't charged a fee. (This is the way I understand it, at least.)

IF you have no currency conversion fee, no user fees, etc, credit card and a debit card, then there will be no difference when converted to US dollars. However, you often can get a discount for using cash especially in hotels. Often that discount is 5% or more. So that makes it worthwhile to pay cash. We pay cash most of the time simply because it is more convenient. When you bought Euro from Chase, there was mark up, a fee, profit (whatever you want to call it) buried in the exchange. Chase bought the Euro for 1.45 and sold them to you for 1.51. Same as the local merchant who buys at wholesale and sell at retails. It is business.

You might call Citibank back and ask again if there is a foreign transaction fee (usually 1-3%) on ATM withdrawals and if you will ALSO be charged a fee for using an ATM in Italy. The ATM's in Italy do not charge a service fee to make a withdrawal but many US Banks will charge a few dollars per withdrawal PLUS the foreign transaction fee. Most US Banks and their credit cards, such as Bank of America, American Express, Capital One etc. charge a 2-3% foreign transaction fee but Capital One does not. American Express Platinum is another and I have read of one or two more, such as Schwab. To sum it up, they are different charges so be clear with them as to what you are asking to ensure that you are both on the same page.

I have been using my Capitol One credit card for almost 3 years. No fees and the exchange rate, when I remember to check it, is always within 1% of the mid-market rate - usually higher, but occasionally lower! In the U.S., you always get a poor rate on foreign currency purchases. Ask them how they determine the exchange rate on ATM withdrawals. Be sure to notify Capital One and Citibank of your travel dates before you leave home. Otherwise they are liable to freeze your account and it's a hassle to call them from abroad. . . plus an inconvenience when your card is denied.

All ATM cash withdrawals will result in a fee, regardless of the card used. Also, credit card companies charge interest starting the day of the withdrawal, unlike regular purchases which only attract interest if you don't pay off the bill. Capital One has zero fees for regular purchases overseas (I have one of their cards). You need to read your card agreement to see what the charge is for cash advances (as they are called), and the interest rate they'll charge. Mathew

"All ATM cash withdrawals will result in a fee, regardless of the card used. " No. I have a Capital One BANK account, in addition to my Capital One credit card, and ATM withdrawals against that account incur NO foreign transaction fee and NO ATM fee.

Also, Charles Schwab Bank, which is part of the Charles Schwab broker, will have no ATM or foreign transaction fee. Their exchange is within .5% of the rate reported by bloomberg. I check it every time I did a withdraw. The rate went as high as 1.49 in the May. In the last few weeks it was around 141 to 143. Today is 142.282. I think Citi charge you a lot. It you want to check out the history of the exchange rate. Put in FEX as a stock in yahoo finance for the stock price.
Have a good trip.

There is some misleading or possible misunderstood comments in earlier postings. If you use a CREDIT card to withdraw cash that is consider a cash advance (LOAN) and a whole bunch of expensive fees kick including interest from day of withdraw - it is a loan. If a DEBIT card is used then it is your cash, not a loan, and only fees, as determined by the card issuer, are added. Some debit card issuer do not add any fees. Bank owned ATMs in Italy do not add a user fee as is common in the US when using an ATM not owned by your card issuer.

Kathy, The original questioner was asking about fees for a Capital One credit card, so I answered that question. To be crystal clear, I should have written "All ATM cash advances against a credit card attract a fee". You are quite right that if you have a debit card for a bank account you can (with some homework) avoid ATM fees -- because you're withdrawing your own money vs. getting a cash advance against a line of credit. Ciao, Mathew

I've made a several purchases in the last week for tickets/tours on my Capital One Debit card (mastercard) in Euros and the exchange rate seems to be at the going exchange rate. 1.41.. on thursday and 1.42.. yesterday. Assuming ATM withdrawals in Italy would convert at the same daily exchange rates.

Thanks for clarifying that point, Frank. When I read it, I thought it was misleading as well, but I knew the difference between a credit card cash advance and a cash withdrawal from a debit card, but others may not have read between the lines. It probably caused a little anxiety in more than one person who read that post who is trying to maximize their travel dollars and minimize fees along the way.

Karen, I think the exchange rate (not fee) for all the big banks are the same. Or close to it. It is the daily rate from the open market plus a small build in profit (or broker fee). So if you see the rate from Bloomberg ( market rate) is 1.41, than I will expect the banks use 1.415 as the rate. The .005 is like a broker fee. Also, if they charge you exchange fee or ATM fee. It will on top of it.
The closing market rate on 8/5 is 141.58. on 8/6 is 142.25.