Credit Cards vs ATM Debit Cards

Use both. I use my credit card for large purchases like paying the hotel bill. I use the debit card at ATMs for daily spending money.

Thanks for the reply. I was planning to use both so glad you agree.

I also use a combination of both. ATM/debit card to get cash and credit card for large purchases. With that said, make sure you know what fees, if any, your bank/credit card company will charge. Your bank may charge 1% for debit card use, but your credit card company may charge 5%. In this case, it makes more sense to use your debit card for purchases. Capital One does not charge foreign exchange fees, so consider getting one if you don't already have one and typically credit unions have minimal charge for transaction, including cash withdrawals.

It's difficult to answer specifically for your case without knowing what your respective fees are.

I think there is some previous conflicting advice. Debit cards should only be use to obtain cash from an ATM and not for routine purchase since you less fraud protection with a debit card. Credit cards can be used as you would normally use a c card in the US. Strictly speaking the networks used -- Plus, Cirrus -- adds the 1% or a little less to the base exchange rate. After that all the fees are determine by the card issuer. Most credit cards will add 1 to 3% and debit cards can be more since some issuers will impose a withdraw fee along with a currency conversion fee. Check very carefully with your various card issuers.

Some Capital One credit cards do use charge a fee and many credit unions do not add fees to debit card usage. It it worth it to do some shopping around.

On our last trip less than 5% of the trip went on credit cards. Cash is king and you can often get cash discounts of 5% or more on hotels if paid in cash.

Hi Dan,

We've RARELY use a CC on our trips, though we do bring them just in case . We always pay with cash withdrawn from our checking account from an ATM.

Paul

Dan,
I suggest that you only use a debit card at ATMs, not for purchases. If a debit card is compromised the thieves have access to your money as opposed to a credit card that is compromised and the thieves have access to the bank's money.

See http://flyerguide.com/wiki/index.php/Credit/Debit/ATM_Cards_and_Foreign_Exchange
for charges by different banks.

A correction to Frank's post: the networks (Plus and Cirrus) do not add the the base exchange rate (well at least since they were sued several years ago).

Ah !!! Harry. Have to keep having to explaining this to you. Plus and Cirrus were not sued and do not have to reveal their fees. Visa and Mastercard were sued and have to reveal their fees that are added. Granted Plus and Cirrus are wholly own companies of VISA and MC but in the eyes of corporate law are independent companies and the law suit over fees did not include them so they continue to bury their 1% fee in the exchange rate that is passed along to VISA and MC. Most people perceive of PLUS and VISA being one and the same but they are not.

Steve,
I am directing this reply to you since Frank has shown that he is unwilling/unable to read my references.
If you look at the settlement document at http://www.ccfsettlement.com/documents/mdl_1409_settlement_agreement_1384141.pdf
page 22 paragraph yy
"“Visa-branded Card” means Credit Cards or Debit Cards bearing the name
Visa, Plus, Interlink or any other brand name in the Visa family of brands"

Page 28 iii
"MasterCard and Visa each agrees that it will not engage in
Embedding with respect to issuing Members in the United States"
See page 11 paragraph s for a definition of embedding.

Dan, we use a debit card for getting cash at ATMs. We have had great success using Banca di Roma ATMs because we can usually withdraw 500 Euros at a time (I withdraw 500 and my wife withdraws 500 each time.). Caveat: Be sure to up your limits on your card through your bank before you leave. And, consider the exchange rate in determining your upper limit. 500 Euros may remove $700 from your account.
John

Steve,
Check the document http://www.ccfsettlement.com/documents/mdl_1409_settlement_agreement_1384141.pdf
page 10 paragraph o
“Defendants” means the Bank Defendants and the Network Defendants.

page 8 paragraph f
“Base Exchange Amount” means, with regard to a Foreign Transaction,
the U.S. dollar amount that results from applying the transaction amount in foreign currency to
any factor(s) (however selected, determined, or characterized, and without regard to whether, or
the price at which, such currency was obtained from one or more third parties) used in
calculating the transaction amount in U.S. dollars for that transaction.

The above shows that the networks and Visa (not just the banks) are subject to the restrictions of embedding (messing with the rates).

Steve you are looking at the wrong part of the VISA quote. Look at "The Visa rate is selected from a range of rates available in wholesale currency markets"

All the above does not stop banks from charging us it just stops them from hiding the charges. This makes something like http://flyerguide.com/wiki/index.php/Credit/Debit/ATM_Cards_and_Foreign_Exchange
possible to shows us what the transaction really cost.

I use only one credit card in hotels or in shops. I pay cash in restaurants and every other place. My ATM card is an ATM card only, which I use at banks only for cash. I only use bank ATM's when the bank is open, so if there is a problem I can go inside for assistance.

Also, I inspect the ATM card slot for any tampering. If it looks ok I use it. Also, sometimes I wait for other people to use the machine before I use it. I do not want to appear paranoid, but thieves are increasingly creative.

Buon viaggio,

RB

Capital One does offer a Money Market debit card that doesn't charge any fees and even pays you interest. The catch is that you have to set up the account several weeks in advance and deposit into it all the money that you think you might use.

Don't forget to call all your banks to tell them when you'll be in Italy and find out what the daily limit is per ATM card. Take another ATM card as a backup just in case. And you'll need a four number PIN for the machines, which are called "bancomat" in Italy.

My banker strongly advised me to avoid using a debit card for much of anything other than ATMs. It only takes one dishonest clerk or server to access all your accounts.

Use your ATM/debit card and pay cash for things. You get a better price from all the vendors when you pay in cash and no surprises (hidden fees)when you get back home.

Living here, we use a local ATM card often. We have a debit card from our US account at B of A, but use it very rarely. For purchases in stores we use CASH... or our Mastercard Capitol One card - no fees and a good exchange rate. ATM's are the best way to get cash, but we do not use our US debit card in stores. In over two years we've had no security issues using any of these cards. For more info on using ATM's in Italy, CLICK HERE

Use our atm card for cash w.d. and Cap. One MasterCard for anything we don't pay cash for. Same reason Ron above stated.

I have both the Capital One Visa and the Capital One Money Market account that another poster mentioned. Have used both in Europe, Mexico and Canada and no fees in any location.

I'm also planning a trip to Italy in 2010 and recently read this bit of interesting information on the State Department website under the Italy consular information page:

The U.S. Secret Service in Rome is assisting Italian Law Enforcement authorities in investigating an increase in the appearance of ATM skimming devices. These devices are attached to legitimate bank ATMs, usually located in tourist areas, and capture the account information stored electronically on the card’s magnetic strip. The devices consist of a card reader installed over the legitimate reader and a pin-hole video camera mounted above the keypad that records the customer’s PIN. ATMs with skimming devices installed may also allow normal transactions to occur. The victim’s information is sold, traded on-line, or encoded on another card such as a hotel key card to access the compromised account. Here are some helpful hints to protect yourself and to identify skimming devices:

1) Use ATMs located in well-lit public areas, or secured inside the bank/business
2) Cover the keypad with one hand as you enter your PIN
3) Look for gaps, tampered appearance, or other irregularities between the metal faceplate of the ATM and the card reader
4) Avoid card readers that are not flush with the face of the ATM
5) Closely monitor your account statements for unauthorized transactions