Are credit cards a good choice for spending American money in Europe?
 

I'll be travelling through Belguim,Switzerland, Austria, and Germany next April and am thinking about money matters. My preference is to use credit cards when I can because then I'm not worrying about how much of the various currencies to have, not wanting too much or too little. I also don't have to always be figuring exchange rates and wonder if the exchange was accurate or if I'm being ripped off. And, I've read that the ATMs work well and are abundant, but I'd rather not worry about finding one. So, I'm wondering if credit cards are a good option and safe in terms of the European vendor not ripping me off or the credit card company miscalculating exchange rates. What did you find to be best? Thanks for your input.

In my travels, I have found that I get the best exchange rate from my credit card or ATM. I always hold onto my receipts, that way if there is a discrepency, the credit card company can look into it. I've never had a problem on six European vacations.

Chris, Anna is spot on correct. As a retired banker, I can assure you that your credit card will give you the best rate of exchange without a hassle of worrying about rates. Too, you can "play the float" because their bill will come along within 30 to 60 days, a very low-cost loan, in effect. More you should worry about the declining value of the dollar in coming months. Just get enough money (through ATMs, if possible) to carry you through a few days at a time. Whatever you do, don't buy any foreign currencies through American banks. Their so-called "trip packs" are a great waste of money at too-high rates. Get yourself some walking-around cash upon arrival in each country and have a great time. Only street vendors in Europe do not take credit cards today. Some small Mom-and-Pop businesses...like small restaurants...also have not entered the credit-card age. A generation ago, it was a different story, but you will be surprised how modern and efficient most European retail establishments are when it comes to relieving you of your dollars.

We just finished our first "no-travellers-checks" trip. It *did* feel odd, but it worked. We carried back-up USD [in our money belts!]In England, Paris and Budapest we had no problem finding ATM's that accepted our debit card [and only had trouble once with the withdrawl limit that debit cards have -- in England where *everything* eats money] You do need to be sure your card's logo and the machine logo match though. <BR>A note on the importance of carrying ANYTHING important in your money belt. I lost my wallet in Budapest [not sure whether it was lost or stolen actually, but the result was the same.] Fortunately I keep my passport and ALL my credt/debit cards in my money belt. I lost some Hungarian forints as well as my driver's license, but the forints were replaceable and I didn't need the latter! I cannot emphasize enough. No matter how alert you are, either there is a thief more alert, OR you will make a mistake. <BR> <BR>***DON'T CARRY YOUR PASSPORT OR CREDIT CARDS IN A WALLET. PERIOD.*** <BR> <BR>We use the over the belt-loop kind of money-belt. You look silly fishing stuff out [and don't do it on the street obviously], but better silly than a ruined trip! <BR>

By all means follow the above advice and use your credit card whenever possible. However, use an ATM for ready cash. They are not at all difficult to find, and they give the same advantageous conversion rate as the credit card. The credit card companies, however, usually charge a fairly high fee for cash advances. Check the very fine print, probably at the very bottom of the back side of your last statement, to find just what their charges are. Usually there is a transaction fee of from 2 to 3 percent with a minimum of $2 or $3 - I have seen it as high as $20 and once $30, more frequently $10. Obviously, this is a pretty high price to pay. Also, there is a finance rate charged on top of that, i.e., you are charged interest from the time you withdraw the cash until you receive your bill. Using your ATM card you will just be charged the same transaction fee as you are charged at home when you use your card anywhere other than at your home bank. In our case, we are fortunate that our local bank charges only $1, and that is all we are charged in Europe. Sure beats paying say $10 on a $100 advance. We usually take about $200 in cash and maybe $500 in travelers checks, just in case of dire emergency - such as having your credit card stolen, which has happened. It's safest to carry two different credit cards - you carry one and your companion the other. Fortunately, the countries you are visiting are amongst the highest safety-wise in Europe, so you shouldn't have a problem - just a wonderful trip. <BR>

All of the advice above is good. The most readily accepted US-based cards for use in Europe are Mastercard and Visa. American Express is also accepted in many places, but not as many as MC and V. Surprisingly, Diners Club – which seems fairly rare in the US – is rather prevalent in Europe. Discover would be an essentially worthless piece of plastic in Europe. My wife and I typically travel with one AE and one V each (4 different cards between us) and have never had any problems.

Credit cards are the way to go, for sure. Let me add, it is good practice to carry extra Visa/Mastercard and/or American Express cards with you separately in case of loss or theft. I also keep a list of my charge card numbers and telephone numbers to call to report a loss or theft. It is also good advice to make copies of your passport, driver's license, and tickets as well. Take nothing to Europe that you really don't need, i.e., personal check books, retail store charge cards ... Sears, JC Penney's, Blockbuster, your library card and such. Leave those fat wallets and big pocketbooks at home. And do carry a money belt, around your waist, under your clothes.

All of the above advice is excellent. <BR>But, let me add a little. In Romania and other former iron curtain nations, including Russia, US greenbacks have great bargaining power. In Russia, there are several billion dollars floating about as surrogate currency. <BR> <BR>I always have a few travelers checks for emergencies. We arrived in Zurich, headed for the train platform, and decided to make a few purchases. A branch bank was at hand, so I whipped out my card. Surprise, the ATM did not work and my train leaving soon. Travelers check to the rescue. <BR> <BR>At another place, the only card that would work was a Visa debit card, and it would only function at ONE of the two banks in town. <BR> <BR>My suggestion is to have both a standard ATM and a debit card and a few dollars in travelers checks. And, for Russia, a few green backs might help, preferably new, unmarked, untorn, and in the $10 and $20 denominations. My German friend who goes regularly to Romania would not be caught without them. <BR>

An interesting article from yesterday's New York Times travel section (12/20) notes that the country's largest issuer of Visa and MasterCard charge cards, Citibank, has just hiked the "transaction fee" for non-dollar-denominated purchases from one percent to two percent, and has "reserved the right" to hike it to three percent. <BR> <BR>This means exactly what it says: when you buy something in Frankfurt using a Citibank-issued charge card, you're paying a 2% premium for the privelege. Now, the question becomes whether the exchange rate you'll get at the Bureau de Change on the street is less or more than two percent from the interbank exchange rate. <BR> <BR>You can get an idea by looking at the Wall Street Journal's cross-currency conversion chart in that newspaper's "C" section before you leave. That chart fairly well reflects the "wholesale" conversion rate between the world's principal currencies. <BR> <BR>To make the example easy, let's say that the Journal says the wholesale conversion rate of Florins to dollars is 2 to 1. You buy a rare glockenspeil for 200 Florins. Your Citibank Visa will report the transaction as costing you $102. Suppose the Bureau de Change outside of he glockenspeil shop is offering to buy $100 of US currency for 196 Florins. Then the transaction is a wash, whether paid for by cash or charged. But if the Bureau de Change is paying 198 Florins for $100, pay cash because you're getting a better deal. If it's 194 Florins for $100, use a credit card. Got it?

Forget the last message. You are better off using credit cards and ATM cards 95% of the time. The few times you are not is not that much to worry about. One key thing on ATM cards. Be sure you only have a four digit PIN. Some banks in Europe will not accept more than four digits. If you have more than four, have your bank change the pin for you before you leave. I always calculate my exchange on both when I get the bill or statment in the US. I always come out better with ATM or credit card. The bank only charged $2.00 per ATM on a recent trip and we still came out ahead with this added in. <BR>

Thanks everybody for your excellent advice! It seems, then, that credit cards and/or ATMs are the principle way to go. And, good advice to carry a few travelers checks, just in case! Thanks also for the advice on bringing extra credit cards and copies of driver's license and passport carried seperately in the event of loss or theft. One more question for you. If I use a travelers check at a store in each country to attain some local currency, will I get a good exchange rate? Thanks so much for all your outstanding input!

Hi Chris, <BR> <BR>usually you cannot use a travellers check that is in US dollars in a store, like you can in the US. You will need to exchange them somewhere and have a bunch of options, depending on where you are. You can change them at a bank or an American Express office. At least in England you could exchange them at a money change office, although these offered signigicantly worse exchange rates. Sometimes you can exchange them at the concierge of your hotel, but again this is likely to be a poor rate. However, I admit I go with whatever is most convenient, not wanting to waste my time on line at the bank. Of course, that's why ATM cards are the best way of getting cash when you travel.

I realize the potential benefit to traveler's checks, but do not use them any more. Typically, I leave the US with $300 - $400 in cash -- several $1 bills, a few $5 bills, a few $20 bills and the rest $50 bills -- split between my wife and myself. Then upon arrival (we don't do tours -- so our schedule is our own) -- I try to find a working ATM before leaving the Airport Terminal. I get the local equivalent of about $100 -$150 in the local currency, and split it up between my wife and myself. Typically this is enough to get us to the hotel and provide walking-around money for most of the trip. I use the $1 bills for tips to the hotel porter, taxi driver, etc. (giving the same amount I would in the US) until I get a "feel" for the local currency. The rest of the US bills, I put away for the remainder of the trip. However, if I have no success finding a working ATM for several days, the rest of the US cash is converted into local currency as needed.

Agree wholeheartedly with most of the advice above, particularly Bob Brown's. To be prepared for all contingencies, an ATM card and a debit card to backup your credit cards, and some traveller's checks, are all excellent to have along. Mastercard and Visa are definitely the best way to go whenever possible and it's best to have one of each. If you need to cash traveller's checks, it's better if they're American Express and you cash/exchange them at an American Express office. A few additional comments: In addition to having a four digit (no alpha, as most key pads are numeric only) PIN for each and every one of your cards (including the credit cards), there's a rumor that those beginning with a zero may not work. Don't know if this is true, but ours didn't work in Paris two years ago, and when changed they did. Use any leftover currency toward your hotel bill. When signing credit card vouchers, be sure to compare it with the check/sales slip and cross out any blank spaces and fill in the bottom (Total) line. SAVE all your receipts AND sales slips. As mentioned above, it is not unusual for charges to appear on your statement many months after the transaction. Be sure to compare each and every amount and check for duplicates. While it's not likely that any discrepancy will appear, there have been horror stories on this and other travel boards - particularly with regard to duplicate charges, the amount on the sales slip not matching the credit card transaction, and "extra zeros". While credit cards are widely accepted, there are still some excellent restaurants, museums, sights, and shops, even in the larger towns and cities, which do not accept them, and sometimes not even traveller's checks. For example, while in Switzerland, after extensive shopping, I found the perfect fondue set at a shop in Appenzel, and they did not accept credit cards or travellers checks (in Swiss Francs!), so I was glad to have the cash - on a Sunday (and positively treasure the fondue set). But, for the most part, your best bet is credit cards, then your ATM card, for the best exchange rates. That said, it is probably not prudent to be overly obsessive about it. Early on, I tried every which way and compared the differences all along the way and after returning home. Believe me, in the overall, it's not really worth spending your valuable time while there on worrying about it. In my experience, American cash is the least economical backup, along with credit card cash advances. The advice to leave everything at home you don't need (including your wallet) and to carry anything important to you in an under your clothing pouch could not be more prudent. It is especially smart to have photocopies of your passport AND extra passport photos, just in case. Note that moneybelts of the actual belt with a zipper compartment variety have been known to disappear in their entirety unbeknownst to their wearers until much later. But, by far, the best tip I've ever learned is to leave any flashy jewelry/watches, etc. at home. It's much better to dress to "blend" rather than to "impress". A friend of mine does not leave home without her stud earrings the size of pencil erasers (and, I have no idea whether they're "real"),and she has mishaps everywhere she goes (but keeps on wearing them)!

I wonder why no one has used the <BR>VISA travel card, we used it several <BR>times this year in Europe, Spain, Germany and Austria and it does work.You buy it at a bank in the USA and it works like any other ATM account. Almost every ATM machine <BR>in Europe will accept it and it is a wonderful way not to carry cash. You receive about 3 free withdrawals and <BR>then a fee is charged, not much, but <BR>the advantage is that you can carry it from european to european country or any other place. You always receive the currency you need. I highly recommended it and have successfully used it. <BR>. <BR>

One other ATM tip....if you are planning to use your ATM card in Europe, put your spending money in your CHECKING account. European ATMs do not give you the account options that US ATMs do; they will only allow you to withdraw from your checking account.

For Carola. Would you be so kind as to describe the Visa world card a little more? My bank does not understand what I am describing. <BR> <BR>Of course, it is the same place that argued with me that the Canadians use the same kind of dollars that we do in the USA, and that I could just send a regular bank check to settle the transaction. <BR> <BR>A further comment on my debit card experience. I was in a small Swiss town when I attempted to use my "plastic" to get money. To the best of my knowledge, one bank would accept nothing with Visa on it while the other bank would accept nothing with Master Card on it. The doors to the bank and the panel of the ATM machine at one bank were plastered with Visa stickers; the other only with Master Card stickers. At the time I was strictly a "Visa man". In Luzern, I found a branch of a major bank that had every logo one could imagine on it. I plugged in my normal ATM card and money came out. <BR> <BR>I agree, never cash at a hotel. In London once, I compared the rates. <BR>The hotel was making 5% more than the bank a few blocks away on the Kensington High Street. I hurried down to the Haymarket and found the Am Ex office.

I never heard of linking your Visa card to your checking account. I always used the standard credit cards ... American Express and Visa and never had a problem. I did have an account in Paris ... BNP which did issue me a Carte Bleu card which was an ATM card and a Visa card which I used in travels throughout Europe as well as when I was home in the US. That card did draw from my french savings account even when I was in the US which was a good way to bring money back home. Actually, for a frequent traveller to Europe, it's not a bad idea to set up an account in France. The Carte Bleu (Visa) card was acceptable everywhere. No matter where you go, even in Mom & Pop stores, they have these little hand-held machines you insert your card in and punch in your PIN code and it's done ... no signature required. Of course it allows you to transfer funds from the US to France and vice versa very easily.

My comment is for people with American bank accounts who want to withdraw money using European ATMs. Here in the States, when your are using an ATM, you have a choice of withdrawing funds from Checking, Savings, or Credit card. The European ATMs I've used gave the option of "bank account" and credit card only. The bank account it is refering to, is a checking account, not a savings account.

My experience is that credit cards are not accepted in many small towns in Austria and Germany. However, even in the smallest town there is usually at least one ATM machine to get local currency. While credit cards are almost universally accepted in larger cities, they are useless in more out of the way places.