prmbrown

I've read several threads on Fodor's about transaction fees and exchange rate markups on credit card and debit card usage abroad which caused me to inquire more closely into my own situation and I thought I would pass along what I learned.

I was most concerned about ATM withdrawals and thought it would be most logical to look at my bank statements from my last trip to Europe and see what fees were disclosed. There were none but I called the number on the back of the card anyway and was told that fees were set by the bank not by the processor. Okay, I made a trip to the bank and was told that there was a 3% fee and that it was aggregated into the withdrawal amount but there was no up charge on the exchange rate. I wasn't terribly pleased about the undisclosed transaction fee so when I talked to my broker, Fidelity Investments, I asked if they had ATM cards or what they called cash cards and what he told me was almost too good to be true. First, there are no fees and by that I mean absolutely no transaction costs whether a percentage or a flat rate. Nor is there an up charge on the exchange rate. Also, Fidelity pays the foreign ATM fees so it is truly a costless transaction. After verifying several times that I completely understood what I was being told, I said okay how do I apply? Thinking there would be the usual lengthy application form I was again much surprised that all one does is check one box on the account page and voila you're done.

I will add parenthetically that I had to make a deposit in Euros to a French bank and Fidelity also handled that for me at no cost.

I am sure some of you are Fidelity customers and many are not but I would assume it's a competitive world and what Fidelity does is likely to be a policy at other like firms. Hopefully, this quick and easy solution to retrieving cash overseas will be beneficial to some of you.

justineparis

In France there are NO fees for using an ATM.. so that's not a gift from this side. Same with UK,, unless you use one of those stand alones in a bar or restaurant type place.

Bank fees are from this side of pond.

I am confused about the French bank account.. its very hard to get one for a non resident.. never heard of this being something one would do..

Christina

How generous to say they pay the foreign ATM fees when there AREN'T ANY!!! Now to be honest, there are some in Mexico, actually, as I found out last summer. All the major banks there charge about 2 pct for foreign ATM card withdrawals. SO that's on top of your own card (mine doesn't charge anything). But I suspect Fidelity may come up with some way of claiming those aren't foreign ATM fees if you go to MExico.

But this is good advice if you have Fidelity, it sounds like. Kind of odd pricing on their end -- I have an ATM card but my bank charges the same if it's an ATM card or debit card, never heard of two types of fees (for the same type transaction, cash from an ATM). Unless it were really two different types of accounts, banks have lots of different account types, depending on your balance, usually.

I thought it was illegal for banks to not break out separately and disclose the fees you are paying, like they are. It certainly is duplicitous, in any case. Most people will be clueless since it will involve a different currency and won't realize they are paying a 3 pct fee for an ATM withdrawal. Maybe it's only illegal for credit cards to do that, don't know. It still isn't good customer service, though.

Fidelity's own website claims they have a foreign transaction charge, and that even includes if you got it charged in USD but it were in a foreign country (some sneaky banks do that):

<<There is no annual fee on the Fidelity® Visa® Gold Check Card. Other institutions may assess ATM fees for use of ATMs in their network. Fidelity® Cash Management Account customers or Fidelity accounts coded Premium, Private Client Group, or held by customers with householded annual trading activity of 120 or more stock, bond, or options trades, will be reimbursed for ATM fees charged by other institutions.
Please review your Fidelity Check Card Agreement (PDF) for specific information on reimbursement caps or limits. For each foreign transaction, there is a foreign transaction fee (currently, 1 percent of the transaction for non-U.S. dollar transactions), which will be included in the amount charged to your account. This charge may apply whether or not there is a currency conversion.>>

However, that 1 pct is charged by the network, I believe, and it isn't unusual for banks to charge that to you.

greg

Brokerage accounts often offer cards favorable for oversea usage. You can find out what actually got tacked onto your transaction without having to decode convoluted definitions of "fees." Use http://www.xe.com/creditcard-charges-calculator, and you can find out how much over the official rate you got hit. You will not see exactly 0% even if your transaction was no-fee due to timing differences but should be a small fraction of 1.0% centered around 0.0%.

Kathie

Christina, you must only travel to Europe. There are local ATM fees in many places.

In my experience, brokerages have the best deals for withdrawing money from foreign ATMs. Currently, in Europe, the banks don't charge for use of their ATMs, but that is different elsewhere in the world. Countries in SE Asia, which used to have no fees on the ATMs, now have charges averaging $5 per withdrawal. My brokerage (Trade) pays that back to me. My brokerage does pass on the 1% fee but that's all.

AlessandraZoe

Yep, Kathie, that's why I'm a Schwab fan.

junstineinparis--I am assuming the OP had to do a wire transfer into a French bank account to rent an apartment, mainly because we were in a similar situation.

My daughter's lodging was supposedly being taken care of by her abroad school in France. Well, within a few weeks after her spring semester was over in the US, I gathered that the French school's coordinator had a few brain cells missing, and we hurriedly sought to land a place for four months for the upcoming Fall semester. And it was a good thing we did: she had one of the few lodging success stories of her group.

I had to use a French rental agency to get the place we wanted (there was no direct owner listing), and they requested I do a wire transfer for the first part of everything. I stupidly used my local bank who handled my regular ATM, who charged me money at the outset, money over the sea (because they use an intermediary), and later on, money for the hit the agency received from the French bank.

I was gobsmacked. I knew I had at least one more upcoming wire transfer, and I also wanted to pay cash for the rest of the rent upon arrival.

I think it may have been DebitMN who clued me in to Schwab. I am eternally grateful. As long as one has an investment account, Schwab's investment checking debit card is a good deal. No foreign transaction fees; if foreign bank charges, they assume the cost; debit card charging power can be lowered to 1 penny.

As a result, our next wire transfer was super cheap, plus I was never charged for any fees for ATM withdrawals. It is my overseas "go to" card.

prmbrown

Justinparis,

Alessandra is correct. My remark about the bank was that I had to make a wire transfer to the gite owner's French bank not that I had a French bank account. Sorry for the confusion.

Michael

For those needing to transfer money for rental units, traffic fines to pay, etc., I recommend using xe.com (other companies offer a similar service). It is cheaper than using one's local bank, but one must be willing to fill out information similar to opening a bank account. Cheaper still is Transferwise, but that company will not allow the customer to specify the amount to be deposited, only the amount to be withdrawn (the deposited amount will vary according to the on-going rate of exchange).

prmbrown

I called Fidelity to inquire about the 1% non- US dollar conversion fee and indeed there is one. Apparently, Fidelity and others do not consider the 1% Visa charge as an ATM charge and it is non reimbursable. Other than that there are no other costs.

greg

>>> Apparently, Fidelity and others do not consider the 1% Visa charge as an ATM charge <<<

This a text case example of what I mean by "convoluted definitions of fees." ATM charge? Foreign currency fee? Foreign transaction fee? Conversion fee? Convenience fee? Non network ATM usage fee? "comfort" of charging your account in your home currency fee!

While financial companies pride themselves in coming up with definitions to indicate what they charge you is not something people consider undesirable, as far as you are concerned, what matter is how much they add to the official exchange rate irrespective of how they call them.

Dukey1

We have had this sort of conversation here in the past. Capital One bankcards, at least the one I have, charges no foreign transaction fee. When people questioned whether or not the bank was giving folks a poor conversion rate a lot of folks responded that the rate CapOne "gives" is no different than the rate given by issuers which DO charge a 3% conversion fee.

I notice Barclays now has decided that it isn't going to charge their 3% fee on some of their cards. Perhaps this is in response to competition.

Frankly, I have trouble believing any bank "gives" people much of anything without making revenue somewhere in the mix.

AlessandraZoe

Michael, I had checked into xe.com before I went the Schwab route. Schwab's transactions were cheaper.

I guess investing money pays off in more ways than in capital gains.

prmbrown

I guess this is flogging a dead horse but I have had several subsequent conversations with Fidelity about the one percent foriegn transaction fee and the latest is that the fee only apples to purchases and not to ATM withdrawals. So, ATM withdrawals are without fees, or up charges of any kind. I suggest you query your own brokerage company to determine what their policy is but it's the least expensive way to obtain cash in Europe that I have found.

Andrew

Andrews Federal Credit Union also charges 0% transaction fees and no per-use ATM fee. Anyone can join this credit union. I assume many here could also open a Fidelity account - or if they already happen to have a Fidelity account, this would the way to go. Andrews also offers a PIN-and-chip Visa card (signature required when a human being involved; PIN used for machine transactions e.g. at train stations and fuel stations). In 1-2 years, probably this will be the norm for US credit cards anyway but has been helpful up until now.

Christina

I just checked Andrews out as a consideration and find it curious that they don't mention foreign transaction charges (or non-Andrews ATM withdrawals) in their schedule of fees. IN theory, I had a car tell me once that since it wasn't mentioned, it meant there were none, but I don't like to infer things by omission -- especially since the Andrews schedule of fees specifically says there is no ATM charge at an Andrews or COOP ATM. If there were none at any ATM, I find that a suspicious way of wording it.

If you go into the terms and conditions, rather than fees, it seems to say that the foreign exchange rate is the Visa network rate which includes a 1 pct fee over the base govt rate, it says so. SO that's no different from Fidelity.

Andrew

Christina, let your "suspicions" run as wild as you like. There have been no foreign transaction fees for me and no ATM charges in Europe with my Andrews ATM card. I have checked and double checked the actual charges on my statements, even after asking Andrews FCU customer service whether there were fees ("no"). But if that doesn't satisfy you, feel free to get some other card - doesn't bother me a bit.

As for ATM fees, remember there are two parties involved when using an ATM machine that isn't owned by your financial institution: a fee could be charged by your institution and by the one owning the ATM. Andrews' schedule of fees says that the OTHER ATM could charge you a fee except in the case of an Andrews or COOP ATM machine. But in Europe, almost none of the ATM charge you fees (I've never been charged one - ever).

(A fee could also be charged by Visa for foreign transaction fees; Andrews either absorbs this fee themselves or has negotiated it away or something else. I have been charged the Visa 1% fee by other credit unions when using my ATM card in Europe but not by Andrews.)

Andrews themselves never charge an ATM fee. If you are in the US and use your Andrews ATM card at a machine that charges fees for non-members (e.g.Bank of America), then Bank of America will probably charge you $2 or $3 to use it. Andrews will charge you nothing.

Trophywife007

Has anyone tried Capital One checking? I was wondering if their policy of not charging the 3% conversion fee would still hold for atm transactions.

DebitNM

I have both Cap One and Andrews ATM cards. They function the same way - no foreign transactions fees at all. I am not sure the current Cap One checking account has the same as mine, which is now 4 years old. I know it changed when they merged with ING.

I have used both cards in many European countries without any issues and have always just been charged for the amount of foreign currency withdrawal at the days exchange rate.

Trophywife007

Thanks!

crckwc1

Overseas, we use our UBS Visa card both for purchases and for ATM withdrawals. Any fees that come with these transactions are refunded to our account by our UBS manager.