Euros

People seem to recommend buying euros in Europe at machines instead of here before you go. Using machines in Europe last year it seemed to me that I paid more between the machine charges and my visa and bank charges. It was also inconvenient especial when a machine ate my card. What am I missing?
Dorothea

Posted by Dorothea
Riva, Maryland, USA
25 posts

Let me ask another question. If I could buy euro's today here the price is $1.28. I know that is a good price. I do not have to pay a fee but it will cost me .29 cents for each US dollar. If I get from a bank machine there will I be paying what ever the US price is that day for euro's or is it just dollar for dollar. In other words am I paying $1.28 if euros are going for $1.28 here that day or am I getting &1.00 for each dollar. Thanks to all
Dorothea

Posted by Lee
Oregon
1635 posts

FYI-ATMs in Greece don't charge a fee. Offhand I'd say you're not using the right ATM card. Find a bank that doesn't charge for international ATM transactions. Know that even with the right card you still have to pay the transaction company (VISA, Mastercard, etc.) a small fee, but that's all. I opened an account at Charles Schwab just so I could transfer money online from an outside bank to the free Schwab checking account that came with an ATM card, one that has no transaction fees. Make sure the card is activated and that you inform the banks of your travel plans so they don't freeze your cards for suspicion of ID theft. Take an ATM card from another bank with you as backup. Arrange it so you can transfer funds online if needed. Don't use a credit card for cash withdrawls unless you don't care about the higher interest rates and the cash advance fees.

Posted by Ray
Portland, Oregon, USA
1333 posts

hi, on my first trip i did some experimenting when it came to cash, cash with drawels (w/d) and such. > i bought Euros from my credit union. upto 2% USD/transaction and 2 USD per non CU ATM. 6.00 USD charge for foreign currency exchange. > i paid for things with my Visa
> i w/d $$ from ATMs in Europe. what it came down to was that others peoples/banks hands were in my pocket evertime. i should say that i did check with my credit union before i went and they do have foreign transaction fees and such. the same with buying euros. so, if youre going to make a habbit of going back over there, it maybe worth it to do some experimenting on different methods of buying/paying. happy trails.

Posted by DH
San Antonio, TX, USA
67 posts

First don't use VISA credit card. That is aloan. Use a debit card. My debit card fees were 3 Euros on a 300€ withdrawal. Do not know just how the machine ate ur card.

Posted by Lee
Oregon
1635 posts

$.29 for each dollar is a 29% commission. I can't imagine anything being more expensive! Even BofA only has a $5 flat fee at a foreign ATM, so if you withdraw $500 that's only a 1% commission on an up-to-the-minute exchange rate.

Posted by Agnes
Alexandria, VA, USA
616 posts

Figure out the ATM fees your bank would charge you. Always use a debit card, not a credit card. My credit union debit card charges 1% on each transaction ($0.01 for every $1.00 withdrawn) - your proposal would be 29 times that much...run, run, run away from that idea. ATM machines rarely eat cards anywhere - except when someone doesn't respond within a certain timeframe. In that case, the machine swallows the card for your own protection - so no one else would be able to use it after you.

Posted by janet
Philadelphia, PA, USA
429 posts

Dorothea, the advice given is accurate and sensible. Conquer fears, take prudent steps & u will be fine AND save $$. Quiz your bank about ALL charges. Example: Wells Fargo charges 3% PLUS $5 transaction fee = $14 to get $300 worth of Euros. WOW! Best low-cost bets: Open Schwab online account or Credit Union acct (Google shows 71 CU's in your area!!). Added tips (1) if shaky about ATM problems, only use ATM attached to a bank, DURING BANKING HOURS. That way, if there's a "glitch" you can immediately ask help from bank staff. (2) Carry your current card as back-up. (3) Many banks have $500 withdrawal limit (only €390); ask to have it raised to $750, thus u can go less often; (4)Tell banks u will be withdrawing in Europe, so they won't freeze your account ... and check to make sure they have this info in the computer. Then go... spend ... enjoy!!

Posted by Ray
Portland, Oregon, USA
1333 posts

hi, also, RS books mentions about using ATMs. If you use one at an OPEN bank, at least you can go in and have them get the card for you. No way that can be done if there isnt a bank attached and not open. i agree with the above. Go ask alot of questions regarding internation fees and such. look at whats charged for buying here. If you bank charges you a flat fee, it MAYBE less expensive to do it that way instead of piecemealing it. But you will need to know how much $$ you will need overthere. you wont be able to get away with NOT paying something to someone. afterall people make $$ on currency and conversions. with regards to your last question. YOU WILL NOT GET 1 euro for 1 USD. That was many years ago! If you us an ATM overthere, you will get whatever exchange rate that system is using. I can guarantee you that it wont be 0. if i remember correctly, those travelex will exchange for you too. I think they will wavie the "fee" if you convert x amont of USD. i think it was 500 or more. But im sure they are still making $$ on the exchange rate. One thing though was that if you kept the recept, they would convert back at the same rate. This would be only good if the exchane rate is in your favor. youre not going to win here. The only thing you can do is to MINIMIZE the bleeding. happy trails.

Posted by Lee
Oregon
1635 posts

Unfortunately it's not always possible to be able to wait to find an open bank with an ATM outside, so if you think this advice is good for you be sure you withdraw enough money to tide you over until you can get to the next bank. Personally, that's not something I've ever had a problem with so it would not deter me from taking money from an ATM away from a bank, and more than likely that's going to be where most ATMs will be anyway, away from a bank.

Posted by James
Frisco
1769 posts

I would be surprised if anyone at the bank could open the ATM to retrieve your card, even if the ATM were located in the bank lobby.

Posted by James
Frisco
1769 posts

I would be surprised if anyone at the bank could open the ATM to retrieve your card, even if the ATM were located in the bank lobby.

Posted by Douglas
Oak Park, Illinois
2372 posts

Banks use what is known as an interbank exchange rate. It is the actual rate used throughout the day that banks use to convert money for each other. For all intents and purposes, it IS the exchange rate (and is almost the same as other exchange rates you'll see published online). The question is what rate the banks give YOU and what fees they add. Some banks offer no fees, but the rate they offer you is 10-20% higher than the interbank rate. Some charge you the bank rate but add fees. A few charge you almost nothing. ATM's use the interbank rate and most regular US banks add 1-3% on as a foreign transaction fee plus whatever out-of-network fee they have. Typically the total extra cost to you is 3-5%. The same applies when using a credit card for purchases. And never use a credit card at the ATM since that is a cash advance and you are charged 15-22% on that from the day you withdraw until you pay it off. As you saw, to buy euros here, your bank was going to charge you 29% as a fee above the bank exchange rate. A horrible deal even by almost any comparison. Most banks charge 5-10% to buy euros in advance. It is a good idea to keep a second ATM card with you in case something happens to to your main card. Occasionally a machine will eat a card for various reasons. If that happens, your account is still active and you can use your backup card (at another machine of course). You bank will issue you a second card on request before your trip. They will often also temporarily increase your daily withdrawl limit, which can help get you more cash or avoid numerous small withdrawls if each has a fee.

Posted by Bruce
Whitefish, Montana
610 posts

"If you use one at an OPEN bank, at least you can go in and have them get the card for you." The statement is not universally correct as an ATM kept my brother's card and bank staff were unwilling (unable?) to return it....all during open hours.

Posted by pat
victoria, Canada
7819 posts

Shop around, can't help because I am Canadian, but I have bank that charges me nothing for foreign ATM withdrawals.. ( TD Savings account) ,, as long as I keep a certain balance in account cost is 0, and in France ATMs cost also nothing, so not sure how your fees added up so high... did you use your VISA card to take cash advances,, that's the worst way ever of getting money anywhere and should be reserved for hospital visits and car crashes( in other words dire emergencies)

Posted by Dorothea
Riva, Maryland, USA
25 posts

My communication can be bad as I just saw when I reread all. The rate for euros was $1.29 when I wrote the last question. My bank was not charging $.29 per dollar. That was just the exchange rate which is now $1.28 which is great. If I do not have to pay extra fees and just the exchange rate I think that is a better deal then machines in Europe as euros usually cost more there plus bank fees on both ends. Thanks to all for your help.
Dorothea

Posted by Agnes
Alexandria, VA, USA
616 posts

"If I do not have to pay extra fees and just the exchange rate I think that is a better deal then machines in Europe as euros usually cost more there plus bank fees on both ends." Dorothea, I'm not sure you realize that some kind of fee will be folded into that "exchange rate", whether the bank tells you that or not. They will not give you Euros here for free. Moreover, I don't know how you'll be able to estimate exactly how much money you will need. And then there's the issue of carrying around huge bills which you'll have to break there anyway - banks here will not give you small coins. Euros don't "cost more" in Europe - the only "cost" will be based on which ATM you choose - that's why you need to figure out how much your bank will charge for using an ATM overseas, and you need to chose the ATM and/or debit card that will cost you the least in fees.

Posted by Lee
Oregon
1635 posts

NO WAY is purchasing EURO here in the U.S. going to be cheaper than using an ATM in a country where it is the normal currency. That's just not how banks here do business. Agnes has it right. There will be fees calculated into what they charge you for the currency. You just won't realize it. At the very least there will be an up-front charge for the currency you buy that will end up costing you more in the long run. As stated earlier, find a bank with no- or low foreign ATM transaction fees. Open an account that comes with a Debit Card. Deposit enough money in that account to cover your expenses but have money in another account w/Debit Card available in case of problems. You won't have to worry about keeping all your currency safe this way and you'll get the best exchange rate available.

Posted by Barb
Andover, MN, USA
110 posts

If the value of the euro is $1.29 today that means that it COSTS $1.29 to buy ONE euro. Any bank/financial institution makes money exchanging so add about another percent or two. The price you see of $1.29 is bank to bank - not what we pay. Use a debit card at the ATMs and withdraw large amounts - most US banks (at least Wells Fargo) charge $5.00 USD for each euro withdrawal no matter the amount. But you don't get the $1.29 rate but it is as good as it gets. I bought 300 euros last week in the US at $1.29 but it cost me $1.36. That's about what you can expect+-. Each European bank also usually charges a small fee too when you use their ATM. Make sure your bank knows where and when you are going and what you daily withdrawal limit is. Good luck.
Barb

Posted by Douglas
Oak Park, Illinois
2372 posts

"Each European bank also usually charges a small fee too when you use their ATM." This is not true. European banks do not charge fees for using their ATM's. Some non-bank machines do charge, most notably the Travelex Machines at London's Heathrow, but that is the rare exception. And FYI to the other posters - the OP claims (here and in PM) that her bank told her they will sell her the euro at cost.

Posted by janet
Philadelphia, PA, USA
429 posts

Here is the most useful website explaining clearly what fees are charged for ATM cards AND Credit cards, and a list of over 100 banks national, regional and credit unions comparing their charges. Especially the section "Additional Considerations Concerning Fees" it clearly explains the "foreign transaction fee(s)" charged. AND it says, even if you use a card by the Greediest Banks (such as Citibank,Wells Fargo, Bankamerica etc etc), you STILL do far better than you do by obtaining cash in advance from your bank, or by exchanging your currency at airport currency-exchange bureaus. http://www.flyerguide.com/wiki/index.php/Credit/Debit/ATM_Cards_and_Foreign_Exchange#Schedule_of_Foreign_Transaction_Fees_By_Bank_for_Debit_and_Credit_Cards As mentioned Capitol One seems the best bargain for an online account; if you can find a nearby Credit Union (many many states now have CU's open to ALL state residents), they're the most economical "bricks & Mortar" choices.