Cash conversion / Credit Cards - what is best?

All restaurants accept credit cards, but some might not know what to do with a card without the chip. For cash, use your ATM card (not your credit card) to withdraw money from your checking account. Check what your bank charges per withdrawal; if it is like the BofA ($5 per transaction except with a member bank such as BNP), look for an alternative--mine is the local credit union. Up your limit on daily withdrawals from your checking account, although most limits should cover the withdrawal for a daily payment at the B&B.

Use ATM machines once there to withdraw cash from your checking (not savings) account. Tell your bank in advance where you're going. If your limit isn't adequate for your daily cash needs, ask your bank to increase it temporarily. Make sure you have a 4-digit pin. Use your credit card for large purchases. If you need a LOT of money to pay the B&B, consider getting an international draft in euros before you leave and take it with you or mail it in advance. Be prepared in that case to pay the landlord a few euros for depositing it, as he will be charged by his bank to do so.

I suggest that you open an account with www.xe.com/fx. I use mine to send gift money to relatives in the UK and to pay the deposit at B&Bs that don't accept credit cards. Money is taken from my checking account by electronic transfer. A bank draft in the currency of my choice is send directly by US mail to the recipient of my choice. The exchange rate is only slightly higher than the international rate on the day the transaction is initiated. There are no other fees. If you don't want to mail a large sum of money in advance, you could have the draft made payable to the B&B but mailed to you at home. Take the draft with you and hand it over in person. For security reasons it takes some time and effort to set up an account, but everything goes swiftly and smoothly after that.

The most commonly accepted credit cards are VISA and MasterCard. Most restaurants will accept them. Use credit cards for major purchases and get cash from ATMs for everything else. Ask your bank to increase the daily withdrawal limit on your debit card so you can limit the number of times you have to visit an ATM--and be charged a fee by your bank for doing so. Be sure to notify your credit card providers and your bank when you will be in Europe. If you don't, your cards may be blocked for what some computer thinks is fraudulent use.

I have followed this topic carefully for some time now and have made numerous calls to banks (B of A, Capital One among others) and here is a summary of what I consider to be your best options:
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Credit Cards

1. While your bank may not charge a currency conversion fee, Visa and Master Card does on all transactions made outside of the US whether the charge is in dollars, euros, pound sterling, or any other currency.

2. Most banks, particularly the large well known variety, add 3-5% service fee to all international charges or fixed fees per transaction or both. You will pay this in addition to the 1% Visa/MC currency conversion fee.

3. Many smaller banks or credit unions pass along the 1% MC/Visa currency conversion fee but few add any additional fees of their own.

4. These fees are non refundable. If you return an item or are issued a credit on your card, you will incur new and additional fees on the credit transaction.

5. Capital One is the only credit card issuer of which I know that not only adds no fees of their own to international transactions but absorbs the Visa/MC currency conversion fees. Using this card is the least costly means of doing business (making purchases) outside of the US. What Capital One may charge for those carrying monthly credit card balances is another matter.

6. Discovery cards are not accepted in France (or Europe in general). American Express is accepted by hotel chains and more exclusive restaurants. AE is not widely accepted outside of well trodden tourist paths.

7. The only way to really know what you are paying for the privilege of using your credit card while traveling is to ask a knowledgeable representative at your bank. This website may help one understand the costs of international transactions:
http://www.xe.com/ccc/
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ATM Cards

1. Few if any French banks charge for withdrawing money from their ATMs. This means transactions are at or near market rates with no fees.

2. Few US banks will miss the opportunity to add fees and charges to international ATM transactions. The B of A/BNP alliance has been well discussed on this forum but it is not the only way to obtain euros at market rates. Again, many smaller banks and credit unions do not charge for international ATM withdrawals.

3. There have been several posts by those using 6 digit pin, ATM cards in France. This should clarify the 4 digit pin only myth that has been discussed many times of this forum. The fact that ATM withdrawals must be tied to a checking account and not a savings account appear to remain valid for all French ATM transactions. If you have difficulty making withdrawals from one ATM, try somewhere else.

4. When in need, remember that virtually all French post offices have ATM machines available.

5. Daily limits may make using ATM machines as a primary means to obtain funds for prepayment of apartments difficult. These limits are generally set by terms established by your bank, not necessarily a French bank.

6. The only way to really know what withdrawals will cost is to ask a knowledgeable representative at your ATM issuing bank.
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Travelers Checks

1. In my opinion, ATM machines have made Travelers Checks obsolete.

2. Travelers Checks are expensive to buy, difficult to spend, and are generally exchanged for cash at rates less favorable than cash rates.

3. Overall, I find no compelling reason to use them.
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Cash

1. There may be many valid reasons which require one's obtaining large cash amounts in euros; rental or apartment deposits/advance payments being one of the most common.

2. Generally, the most cost effective way of obtaining large euro amounts is to trade dollars in Paris (acknowledging the obvious risks). I have found the following offer the lowest overall cost to the traveler who needs such an exchange:
http://www.ccopera.com/
http://www.fcochange.com/
http://www.bureaudechange.fr/index.php

3. Bank of America customers may be able to exchange dollars for euros without a fee before departing the US. I might be a good idea to ask your bank what charges are involved with cash exchanges.

Thanks to all for the wealth of knowledge...

Sarastro - you have really done your homework on this topic! Great to know about CapOne, thats the one I use the most.

THANKS! I will be contacting my banks, but thanks for getting me started!

I neglected to mention that the effective costs of using the three recommended exchange bureaus outlined above is about 2% to 3% of the exchange. Ignore the no commission come on. They make their money on a degraded exchange rate. Still even a 3% cash exchange penalty is less costly than what most people will pay for the privileged of using their credit cards.

While your bank does set an initial daily limit for ATM withdrawals, you can ask your bank to increase it when you need large amounts of cash for something like a B&B payment, as StCirq suggested above. Alternatively, you can spread out your withdrawals over the week you are staying in the B$B, assuming that you don't have to pay up front.

Make sure that you are using an ATM or debit card to get cash from an ATM, not a credit card. Credit cards treat such transactions as loans and charge finance charges from the date you withdraw cash.

Good luck finding a knowledgeable representative at your ATM issuing bank. This message board has had numerous stories of people questioning different representatives at their banks and getting conflicting stories about foreign currency transactions.

Nikki - funny about the 'knowledgeable rep' piece... I had the same thought. How do you truly know that they know what they are talking about! Most companies are really lacking in the Cust Serv departments these days... maybe I will be lucky finding some written documentation on their website!