First off, this is a great forum with lots of useful information for travelers like me. Thanks to all contributors !

I have read on numerous websites, that using an ATM card from a US bank (e.g. Bank of America) to withdraw CHF from an ATM machine in Switzerland, e.g. Zurich offers the best exchange rate. This is better than the rate offered by a currency exchange company in the US, e.g. Travelex or from a bank in the United States. Please name some banks whose ATMs offer these great conversion rates.

However, all my US ATM cards charge a 2% (VISA) or 3% (Mastercard) foreign transaction fee for using them at ATMs in Europe. Is the exchange rate at local ATMs in Europe so much better (than at banks in the US) that it covers up for the 2 or 3% foreign transaction fee ?

Another option that avoids the foreign transaction fee is to carry USD in cash and take it to a local bank e.g. Credit Suisse in Zurich and buy CHF. Do you know if their exchange rate is the same as what is offered by ATMs ?

thanks !
sushshants

You need to switch to a bank that doesn't charge you fees for doing nothing.

And no, taking cash could be even worse than an ATM card with those high fees. Plus, if Switzerland is anything like France or Italy, the banks aren't in the business of exchanging money any longer, and won't do any business with you if you're not a customer.

Join a credit union that doesn't charge transaction fees.

YOU don't understand, the ATM doesn't do the conversation rate, some international network does and it is the standard bank rate, pretty much, regardless of the ATM. So forget about choosing some particular ATM, as long as it is one belonging to a bank, which should be obvious.

YOU could easily ask Travelex or go on their website to find out their exchange rate (or call up your bank to find theirs), but generally it is around 7-13 percent in the US, at any place I've checked. But in any case, you are never going to find an exchange company in the US that will give you CHF for less than a 2 pct markup, really.

Most banks won't exchange money for non-customers, anyway, so I'd forget that option. If they did, it would be a service they would be making a profit on, they wouldn't do it to be charitable. So they would probably charge around 10 pct, also.

Christina, I guess you are saying that as long as an ATM is operated by a bank, e.g. Credit Suisse it should offer a standard conversion rate.
Is there a way to find out this conversion rate for buying CHF using a US ATM card ?
Does this site show those rates ?

http://www.xe.com/currencycharts/?from=USD&to=CHF

I did find out conversion rates in the US for buying CHF and they are worse than the rate on the above site, even when I add the 2% transaction fee.
I am just not sure if I ATMs in Switzerland offer the same conversion rate as the above site for buying CHF.

You need to switch to a bank that doesn't charge you fees for doing nothing.>

Naw too much hassle for no real reason - simply use your checking account ATM card and then you only have what your local bank charges for a normal ATM use abroad - nearly always IME a flat $5 max fee and you can change up to about $300 a day or more if you make advance arrangements with your bank. some credit unions don't even charge the ATM fee - European ATMs do not charge anything - it is your local bank.

<And no, taking cash could be even worse than an ATM card with those high fees.>

IME in Switzerland the currency exchanges in train stations change money at about ATM rates - not quite as good but not with the huge discrepancy as in other countries and last time I was there two years ago banks definitely did change money - still not as good as ATM rates but not nearly such a difference for cash vs ATMs as is typical in much of Europe.

Switzerland still have the Swiss franc - so unlike countries in the Euro Zone where the currency exchange business is way down all foreigners coming to Switzerland must change money and thus perhaps the reason why banks still have Change windows (perhaps in the past two years they do not but I doubt that given the Swiss franc being a unique currency.

I always use ATMs hooked to my checking account but only if I need the whole $300 - I would never use an ATM to change say $40 because I would still pay the same $5 flat fee (at least in my case and others I know) - when I need just a few dollars I head to the nearest Swiss train station where they change without any service charge last I new and at near going bank rates. so carry some cash but try to use the ATM checking account aspect or if needing to buy something on your way out for a small amount then use a credit card as you only pay the 3% not a flat fee for that.

<<nearly always IME a flat $5 max fee >>

Not accurate. This varies from bank to bank and from account type to account type. Usually there is a flat fee AND there is also a conversion surcharge equivalent to the Visa or MC surcharge discussed above.

The simplest facts are these:
(1) an ATM at a European bank changes your dollars into local wampum at the international currency exchange rate and will only work if the ATM is on your cash network (Plus or Cirrus, these are the Visa and MC of cash networks).
(2) if the ATM transaction is tied to your bank account, your bank adds a transaction charge of ___% and may add a per transaction charge of a flat fee (example: Chase charges $3 plus 3.5%, thus I use another card). This means that if you check your balance, you'll be hit with the flat fee charge so know that you have enough beforehand. Evidently, PalQ has a good deal with a bank that charges only the fee. This is rare in the US.
(3) Visa and Mastercard have nothing to do with the amount of charges on <b>ATM debit cards</b> tied to your bank accounts - those charges are determined by your banking institution.
(4) if you withdraw money on a Visa or Mastercard CREDIT card, you will pay the Visa/MC exchange fee (2%, 3%, whatever) <b>PLUS interest on the money withdrawn that accrues at the moment you withdraw it</b> and that interest rate is usually different from your APR on credit purchases (check your user agreement).

I am not sure if the following is true

(3) Visa and Mastercard have nothing to do with the amount of charges on ATM debit cards tied to your bank accounts - those charges are determined by your banking institution.

I have two ATM debit cards tied to bank accounts with two major banks. One of those debit cards has VISA and the other has Mastercard on it. They ARE NOT credit cards.
Hence I called to bank to determine fees for using that ATM card outside and they mentioned the 2 % and 3 % transaction fees imposed by VISA and MC respectively which they (the banks) cannot even waive since they dont charge those fees.

US based bank customer service reps almost always blow smoke. The often don't have any idea how foreign exchange works.

I have 4 different ATM cards through 4 different banks - all w/ visa logos, and they all charge different % and per-transaction fees.

Some 1%, some 3%, some no fees, some as much as $5.

And the cash machine makes no difference (as long as it is a bank owned ATM). You are asking for local currency and are getting local currency - no 'conversion' is involved. The conversion is made when the transaction is presented to your own banks system.

Bank of American is going to charge you a fee (on top of the foreign transaction fee) unless you go to one of their affiliates but I'm not sure they have an affiliate in Switzerland. A French affiliate is Parabas. You'll have to find out if they have a partner bank in Switzerland.

Using an ATM card you will get close to the conversion rate from the XE web site you posted. Conversion rates are applied when the transaction is posted to your account. So if you use your card on Monday and the rate increases on Tuesday and the charge/ATM is posted on Tuesday you will pay that day's rates. Exchange rates fluctuate daily but only by a small amount.

Visa does charge an ATM fee but banks usually add to that charge. I believe Visa has a 1% foreign transaction fee (that's what I pay when using my credit union ATM card. Then banks add an additional 1-2 percent.

Before you leave you need to notify your bank(s) that you will be using your ATM and credit cards outside of your home state. If you are transferring any place outside Switzerland then you should tell the bank(s) about any location you might be using your cards. For example, if you are flying to Zurich but connecting in Frankfurt first then tell your bank(s) that you will be in Germany and Switzerland. If there is any possibility of going to France or Italy then mention those countries too.

<(3) Visa and Mastercard have nothing to do with the amount of charges on ATM debit cards tied to your bank accounts - those charges are determined by your banking institution. >

This is true. Any charge at all (as long as you withdraw from a bank ATM) comes from your bank.

PQ's bank charges a transaction fee of $5 -- he says.

I don't know why anybody in the US insists on paying a bank both a transaction fee AND a conversion fee over 1%. When it is so easy to open a travel account at a credit union. Most credit unions charge no transaction fee and only 1% over the interbank conversion rate.

I opened a Capitol One High Yield Money Market Account just so I could get an ATM card on that account. I keep some money in the account where it earns a tiny bit. When I go to Europe I can use the card to withdraw local currency. No charges.

None!

I don't have a Capitol One account. I bank with a CU, and there is NO transaction fee. I pay 1% over the interbank rate. I would run screaming from any bank that charged me a $5 transaction fee, which is NOT normal.

The prices in Zurich would make the hairs on the back of Mark Zuckerberg's neck stand up.

I wouldn't be worrying about $5.

You can't even get two pieces of chocolate at Teuscher on the Bahnhofstrasse for $5.

If you are American and you use your credit card in Switzerland, you will be asked to make payment in $ or CHF. Always say Swiss Francs!!!!!

You will be charged TWO conversion fees by most credit card Cos. if you choose dollars.

Especially Bank of America.


Tschuss,
Thin

International banking is complicated -- just think about the 2007-2008 financial meltdown -- and you become a small digit in that equation when you change money.
Maybe I can simplify a little bit.
Moneychangers make profit two basic ways. One, the bank charges a transaction fee, either a percentage or a flat fee, to take money out of your account and convert it to foreign currency. That's set by your home bank.
Two, the bank buys foreign currency at a lower rate and sells it to you at a higher rate, keeping the difference for itself. Over-the-counter moneychangers do the same thing, often with a wider and therefore more expensive spread. The effective wholesale rates quoted by currency agencies such XE fall somewhere in between the buy-and-sell rates, depending on the ebb and flow of currency markets. Expect to pay at least three per cent more than the wholesale rate when buying, and lose about 3 per cent when selling. You can try to shop around but there is not much chance of negotiating a significantly more favourable exchange rate face to face, until you rise to multi-millionaire status.
However, as previous posters indicate, you can open a chequing account back home with minimal transaction fees for withdrawing foreign cash.
One other way to reduce the expense when abroad is to stop automatically using your plastic, whether credit or banking card. Take a substantial sum from an ATM, then for smaller purchases pay cash, a quick and convenient modern invention.

<One, the bank charges a transaction fee, either a percentage or a flat fee, to take money out of your account and convert it to foreign currency. That's set by your home bank. >

Or in the US, the bank may charge BOTH a transaction fee AND a percentage of the amount. As reported further upthread.