Best exchange rates
 

We're going to London in March. How can we minimize fees for obtaining pounds at ATMs using credit or debit cards? And fees for charging purchases at restaurants or stores? My fees during a recent trip to Canada were a shock when I got my Visa statement.

If you try to optimize "rates" or "fees" individually, you have already fallen into a currency exchange industry trap.

You want to minimize the total cost, right?

In the time frame you have, you have avoidable as well as avoidable "costs."

First, what are the types of "costs" you did not like in your recent Visa statement?

ATM - avoidable
- using credit card to get cash. Don't use CC. This is a at least a triple whammy. Cash advance charge, immediate usury level interest rate, visa/mc foreign exchange charge, plus possible additional charge from your bank.

ATM-short term
- Use your debit card. It at least gets rid of the cash advance charges. If you have multiple cards, try using one that minimizes 1) per transaction charge using non home bank ATM 2) foreign transaction charge. If you have BofA debit card, if you use Barclays ATM in London, you avoid both charges. (At least when I checked last year.)

ATM-long term
- Open at least a checking account at a financial institution with traveler friendly terms. This is getting harder to come out ahead as banks are piling fees after fees not related to foreign transactions.

CC for purchase-avoidable
- Reject merchants' attempt to use dynamic currency conversion.
- If you have multiple cards, know their foreign transaction charge terms and use the favorable on.

CC purchase - short term
- unless you have Capital One of few other CCs that waive Visa/MC foreign exchange charge, it is difficult to avoid the 1% charge.

A very logical, well laid out synopsis; well done,

Capital One does waive the currency conversion fee, and I think many US credit cards tack on 3%, although some do 1% or 2%. When we were last in France almost 2 years ago, Capital One seemed to convert at very close to the bank-to-bank posted average rate for the day that the transaction was posted. We bought train tickets on-line twice this month, about 2 weeks apart, and the conversion rate was very close to what the newspaper reported for that day. We plan to use that credit card whenever we can while in Italy and France in a few months.

Allow me to add a caution (not for the first time) that Canadian holders of Cap One credit cards do not benefit from a waiver of fees.

Greg's concise review of the situation merits applause. Following his thinking, I reverse my usual strategy when abroad and use as much cash as possible. Withdrawing large amounts of cash on a debit card raises a question of personal security but it certainly does reduce the charges as opposed to drib-by-drab nibbles from the cash machine.