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Exchanging money vs. using credit card

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Jun 19th, 2011, 08:08 PM
  #1
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Exchanging money vs. using credit card

When exchanging $200 US dollars in China, which is the most sensible method? Should I use an ATM, exchange travelers' checks or cash, or just mostly charge things on a credit card? Travel will primarily be in ( rural?) Tianjin.
Many thanks for all answers.
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Jun 19th, 2011, 08:13 PM
  #2
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Time will be spent in Shenyang and a little in Beijing. Basic question is which method has fewest fees? Thanks.
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Jun 19th, 2011, 08:32 PM
  #3
 
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ATM to get cash is the best way. Don't use credit card because dynamic currency conversion is like a plaque there (many threads on this in this forum), and fraud is also not uncommon.

Travelers' cheques are from the previous century. Nobody uses them anymore.
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Jun 19th, 2011, 11:12 PM
  #4
kja
 
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Check with your banks to determine their currency conversion rates. I have a credit card that doesn't ever charge for currency conversion; none of my ATM card charge less than 10%. And keep rkkwan's advice in mind!
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Jun 20th, 2011, 03:55 AM
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With "mandatory" dynamic currency conversion happening at many merchants, you are going to pay for the fees even if you card supposedly has no fee.

10% for ATM? Never heard of that.
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Jun 20th, 2011, 05:04 AM
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For small sum expenses and withraws then I think through the ATMs will be best as there are a lot of the around. For settling your hotel bills etc, then IMO credit card. I normally make sure that the merchant charge the card in the currency of the country I'm at. Several times, all around the world, the merchant see that you're from a forein country and would charge you in your native currency. A big no, no IMO.

Other benefits of charging with your credit card are the special perks that certain credit cards give out when you use them. For example, accident insurances, fraud protection etc..
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Jun 20th, 2011, 06:24 AM
  #7
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Thanks for the tips. ATM sounds like way to go - will check with bank on fees.
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Jun 20th, 2011, 07:00 AM
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There are several different fees you need to look into.
For ATMs, what does your bank charge you to use a foreign ATM?
Does the ATM you are using also have a fee? does your bank refund it?
What does your bank charge on foreign currency conversion?

If you are in rural areas, other than hotels, you will need cash rather than a credit card for purchases, and in markets, you always need cash..

For credit cards,
What premium does your card charge on foreign exchange?
Does your credit card give you any benefits (cash rebate, miles, etc) that off-set that?
And, of course, you have to refuse "dynamic conversion" (mark it clearly on the credit card slip, and follow up with the card issuer if dynamic conversion is used anyway.
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Jun 20th, 2011, 07:03 AM
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kja, I've never heard of a card charging 10% on foreign currency exchange. Most cards charge 1% - 3%. Perhaps you are adding in the cost of using a foreign ATM, which can greatly increase the cost, especially for small withdrawals. Many large banks charge US$5 per withdrawal.
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Jun 20th, 2011, 07:26 AM
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I am heading to China in September. Someone who went on the same tour I am taking (Beijing, Shanghai, Chengdu, Xi'an) said that they spent more time looking for ATMs than it was worth and recommended I take travelers checks that the hotels will exchange. That seems strange to me. From what I read ATMs are plentiful?
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Jun 20th, 2011, 07:46 AM
  #11
 
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ATM are quite plentiful in large cities, and all of the cities you mention are large.

While I've never tried to exchange a travelers check at a hotel in China, in the rest of the world that is a way to guarantee that you get the worst possible exchange rate!
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Jun 20th, 2011, 09:05 AM
  #12
 
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Thanks, Kathie. I'll stick with my ATM card then. What is funny is they have told me they got the "same" or "better" rate using hotels. I've traveled enough in Europe to know better, but thought maybe things are different in Asia.
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Jun 20th, 2011, 09:50 AM
  #13
kja
 
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I misspoke - my ATMs charge 1%, not 10%. Sorry for creating confusion!
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Jun 20th, 2011, 10:34 AM
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'With "mandatory" dynamic currency conversion happening at many merchants, you are going to pay for the fees even if you card supposedly has no fee'.

Are you sure about that? Reasons I am asking is I am getting a capital one credit card because they supposed to absorb the dynamic currency conversion.

http://www.travelfinances.com/direct...e-information/
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Jun 20th, 2011, 10:47 AM
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Mohan, here is the fine print on your credit card offer:

"Visa and MasterCard are susceptible to “dynamic currency conversion” (DCC) fees charged by some international merchants which can add 3% or more to the total purchase. AmericanExpress cards cannot have “dynamic currency fees” added. The usual DCC fee added is between 3-5% but varies from merchant to merchant. Some merchants will not add DCC fees."

These "optional" DCC fees charged by merchants, 3-5%, will still be charged to you on your credit card bill. The card does not charge a currency conversionm fee, and even absorbs the 1% fee imposed by visa and mastercard. But the DCC is charged by the(crooked) merchant, not by the credit card company, so you still pay it.
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Jun 20th, 2011, 10:50 AM
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For reasons that even Citibank cannot explain, both my and dh's debit card were rejected in Sweden. They were fine in Estonia and Latvia on the same trip and they were fine in Asia and everyplace else. Fortunately our Atm card worked well. Money goes fast in Sweden. The American couple with three small children in front of us were not able to get any money out of that atm machine. Their pin were rejected over and over again. I hope they are OK. The moral of the lesson is plan B is a must.
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Jun 20th, 2011, 11:08 AM
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Thanks Kathy, Many merchants esp the ones in Asia and some in Europe don't take Amex, I know credit card company will take my money one way or the other, I am just wondering if Capital one is the best for travelers.
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Jun 20th, 2011, 12:01 PM
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Mohan, do you have a phone number where you can call your bank collect in case of problems? You should have a number for both your ATM card and your credit cards. Still, as you point out, one should always have a plan B. I always carry some emergency cash that I can exchange as needed.

The Capital One card with no conversion fees is a good one. But you still have to be vigilant about dynamic currency conversion.
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Jun 20th, 2011, 06:18 PM
  #19
 
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Mohan - each bank's debit card is aligned to different groups, i.e. Visa Electron, Plus network etc. Look in the back of the debit card to identify and look at the ATM to see if they have the same symbol(s).
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Jun 20th, 2011, 07:32 PM
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Check with your bank to see if they offer a "travel card"

A few of the major banks in Australia now offer these and I used one on my 2 trips to the USA over the last 12 months.

The card is fundamentally a Visa Debit card, but you load it with the currency of the country you are travelling to. The exchange rate is calculated at the time that you load the card so you dont have to worry about adverse exchange trends whilst you are away.

Of course this can work the opposite way, if your currency was to strengthen, but if you plan this in advance of your trip and load the card at the time of the best possible rate, you will minimise your chance of this happening.

The ANZ bank charged $12AUS to issue us with 2 cards and the rate they gave me was only marginally less than that days "inter-bank" rate. After this initial fee, the only further charge that we received was the ATM fee, generally $2, but we normally withdrew the maximum amout allowed ($800-$1000), so the % was minimal. There was no charges on purchases.

As we ran out of funds on this card, we also used our credit cards and even though the $Aus had climbed a little against the Greenback, we were still much better off with the travelcard after all fees were taken into consideration.If we had a credit card with a rewards system that we actually used, it may have tipped things the other way.

The big benefits of this card was locking in the exchange rate, the security and also having a back up card that we kept seperatly at all times. We also felt comfortable with knowing what we had to spend without having to do any mental exchange calculations as we could get a card balance at any ATM, or on-line. Any purchases were instantly reflected on our card balance and could be viewed on-line, unlike our other credit cards. It was accepted anywhere that VISA was.
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