cheryllj

Oops - I posted the part about using credit cards, not ATM cards. Oh, well, it's the same on my account anyway. I wasn't charged a transaction fee for foreign ATM withdrawals.

kayd

I have used ATM cards from three different US banks at European bank ATMs (in Italy, France, Spain, Holland, Denmark, Ireland, UK) to withdraw cash from my checking accounts and have never been charged a fee by the European bank (at least a dozen different ones). The sole transaction fees (if any) have been those of my own banks, and all conversions were within 1% of the published interbank rates for the dates in question. Just because this has been the case for the past ten years does not mean that it will always be true, though.
If I use my banks' ATM cards at the the ATMs of other banks in the US, I will be hit with fees from both banks on each transaction.
My only experience using US-issed ATM cards is in North America and Europe (always at banks, not convenience stores), and I am not familiar with practices elsewhere.

Using my ATM/debit card for foreign purchases (hotel, restaurant, store) would incur the same 3% surcharge that a credit card purchase involves, and I think this is common among US banks.

I never use a credit card to obtain cash because, as cheryllj said, that would be taking out a loan from the credit card company, not withdrawing cash from my bank account.

BigRuss

Motorino -- I interpreted your 1-4 list as applying to credit cards and it did not touch upon the immediate interest charge issue and that issue is the #1 reason to never obtain cash on credit card (even in your home country). If I misread or overlooked something, that's on me.

As for the 5 euro charge you suffer at ATMs, that's not applicable to US debit cards.

StCirq

<<US bank always charges $3+. >>

ABSOLUTELY NOT TRUE, assuming you're talking about a debit card. I pay NO fee to use an ATM in Europe and NO fee to my bank here in the USA.

If you're talking about using a credit card to withdraw cash, that's another story, but that's a totally dumb thing to do to begin with.

klondike

Many of the restaurants in the area of Baden-Württemburg, Germany, that I live near do not take credit cards, period. Always have enough euros on you to pay for a couple of meals is my recco.

logos999

If a restaurant accepts credit cards, it must be expensive. First thought, go somewhere else.

Paul1950

EU banks do not charge foreign users for using their ATMs to get cash. At least none of them have ever charged me (I was last in Europe in April), and I am fully capable of reading and understanding my bank statement. But the VISA/MC network does charge a 1% transaction fee. You probably will be charged more by the owner of a non-bank ATM if you have to use one for some reason.

Your home bank might or might not charge additional fees for using an overseas ATM--either a flat per transaction charge, or another 1% or 2% on top of the VISA/MC network fee. My bank (PNC) does not; it only passes on the 1% VISA/MC network fee.

Using a credit card for purchases (not to withdraw cash from an ATM) is similar in that the VISA/MC network charges 1%. The issuer of your credit card might or might not add another 1% or 2% on top of that. My credit card issuer (USAA) does not, it only passes on the 1% VISA/MC fee to me.

Either way, there is no way the average consumer can regularly get a better overall total cost for buying foreign currency than using a bank ATM in places like the EU where the local bank doesn't add on fees. Using either bank ATMs or making purchases directly with a credit card gives you the interbank rate plus the 1% VISA/MC network fee. Whether there are other charges depends on how greedy your home ATM card and credit card issuers are.

november_moon

We pay for hotels, car rentals, and larger purchases with a credit card, but we use cash for everything else. It is just easier for us - we don't have to worry about whether a restaurant or attraction takes cards and it helps us stay on budget. No credit card sticker shock when we arrive home.

winnick

Paul1950 has it right.

I just returned from France, and just got my VISA statement as well as my bank statement, though I was able to log on each night to verify the daily transactions, at least those that posted.

First, many ATM's in Europe, basically depending on the bank, will not let you dispense whatever number of Euros you want. At some ATMs I was limited to 300 or 400. At others I could get 600 or 800. Although my bank has a sufficiently high dollar amount that I can withdraw (after exchange rate conversion, it is up to the ATM's bank to determine what they will dispense. I found HBSC to have the highest limits.

My bank charges $3 per ATM use so on a 300 Euro draw you are paying an extra penny per Euro. On 600 you're paying an extra 1/2 cent.

My bank, just like my VISA card (which I have from a different bank) adds 3% to the exchange rate. When the Euro was at $1.22 I was paying about $1.2566. I never was charged by the ATM provider.

Now, to be honest, if the ATM provider did charge I wouldn't know it as the charge would be buried in the exchange rate. But since I watched the rates every day it does not look like that ever happened.

On credit card use. Never take a cash advance. And that is exactly what's happening if you use the credit card in an ATM.

My VISA bank charges 3% for each foreign transaction, whether it's in Euros, or dollars. As long as I made the transaction out of the United States I'm hit with the fee as is everyone else.

So, why use one over the other? Besides needing to have cash for those times where credit cards are not accepted the credit card exchange is the best available at the time of the charge (unless they don't submit the charge at that time), whereas if you take 500 Euros from an ATM then that whole 500 bears the exchange rate of that moment.

Another reason, depending on your situation, is if you earn points or miles for card use you will lose those points every time you opt to pay cash, just like if you were eating out in the US.

ellenem

With all this talk about transaction fees and percentages applied to debit card withdrawals and credit card charges, using a debit card for cash and credit card for charges will still get you a better rate of exchange than exchanging dollars for euros in the U.S. before your trip—such an exchange would incur even higher fees.

If you feel you must have some cash on hand for arrival, then for best value just exchange a small amount, perhaps $100, or whatever is necessary to get you out of the airport and to your first hotel.