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matthewl Dec 26th, 2011 09:10 AM

cash vs plastic

I will be taking a three week class in Florence with my two friends.

My friends and I had planned on converting $1500 to Euro at our local bank for a flat fee of $7.50 to use as spending money. Once at our apartment we plan to leave the bulk of the cash there and carry small amounts at a time. We all have our own credit and debit cards to use as a backup also.

My parents don’t like our plan because they are worried that I will get mugged while carrying the money from the airport to my apartment and that the apartment could get robbed with all the money in it.

The whole point of our plan was to avoid a bunch of annoying transaction fees for using our cards. I don’t think we will get mugged our have our apartment broken into. My two friends have already converted their money.

Is this plan unwise?



Michael Dec 26th, 2011 09:17 AM

Definitely unwise to convert euros in your local bank; the fee is the least of the cost--the conversion rate might be very disadvantageous. Use the ATMs once in Europe. To know what your bank will charge you in total, go to to find the daily exchange rate.

If your bank charges outrageous fees for ATM withdrawals abroad, check to see what your local credit union offers, assuming that there is one available. If you have a BofA account, there is one bank with numerous branches in Italy where you can withdraw money without paying any fees.

Travelnut Dec 26th, 2011 09:18 AM

If you don't need a huge wad of cash (euro) upon arrival, why add risk to your travel? You can get cheaper euro out of an ATM when you get there, albeit in smaller doses. Ask your bank to raise your daily withdrawal limit while you are traveling.
If you use a credit card for some things, the 'fee' is only 3% (foreign curr conversion rate for most c.c.s) yet you are willing to pay 7.5% up front for cash.

PalenQ Dec 26th, 2011 09:22 AM

I would not leave a lot of cash in any accommodation unless it is in the hotel safe and documented by staff.

And check the exchange rate any bank in the U.s. is giving - often much much poorer than your ATM card will get once there in zillions of ATMs - just like at home but the optimal exchange rate IME - the $7.50 fee is meaningless - the effective exchange rate you get is - just use ATMs at Florence airport or if wanting cash change dollars to euros at airport bank - again almost always will come out dollars and dollars ahead.

and yes pickpockets do troll airports.

Again the transaction fees for the ATM will be much better overall in typical cases than any rate American banks will pay - you will have a flat free of whatever your local bank charges to get up to about $250 a time at ATM - my bank charges $5 flat fee

and credit cards charge a 3% fee typical on the amount again much better off bottom line - more and more credit cards do not even charge fees and credit cards, like ATMs give optimal exchange fees almost certainly higher than your local bank is giving.

Veteran travelers ONLY use ATMs and credit cards and rarely carry more than a few hundred dollars of cash - practically every place you go will take credit cards and use ATMs for spending cash - again get out the max each time to avoid the per ATM use fee.

janisj Dec 26th, 2011 09:24 AM

As Michaelsays, You will probably do much better using your debit/ATM card to get cash as you need it. Not only will that be safer, the exchange rate will likely be much better.

That $7.50 is the 'fee' but the bank more than likely also uses an inflated exchange rate.

Remember -- the European banks don't charge a fee to use their machines. Who do you bank w/?

(all of the above assumes you are from the USA. For some other countries, the answers might be different)

matthewl Dec 26th, 2011 09:26 AM

Thanks I didn’t think of the exchange rate fluctuating.

It wasn’t a 7.5% fee for up front Euros it was a $7.50 flat fee no matter if you were to convert $100 or 1000

nytraveler Dec 26th, 2011 09:27 AM

That is an absolutely terrible plan.

First, carrying that much cash is just asking for trouble.

But, more important, you will get an awful rate of exchange (usually 8 to 10% off the interbank rate) at any bank in the US. If you use credit cards or pull money from ATMs you will likely pay 2 to 3% above interbank. With your method you are throwing about 5% of your money out the window.

matthewl Dec 26th, 2011 09:33 AM

Wow thank you for all the great and fast replies. i really would have wasted a lot of money.

I have a checking account with td and pnc bank

avalon Dec 26th, 2011 09:43 AM

Neither my Britah Airways master Card nor my American Express credit card s from Virgin Atlantic charge the 3% foreign Transaction fees

chapla Dec 26th, 2011 09:47 AM

In Europe I use my debit card for limiting/managing my expenses!It's amazing how quickly you can spend 50 euros! In Italy, especially in Rome, I didn't feel comfortable using the ATMs on the street-I preferred those found inside the banks during banking hours.

Michel_Paris Dec 26th, 2011 10:19 AM

As others have stated there are always 2 possible charges in a currency transaction: the fee and the exchange rate. The bank/exchnage bureau controls both. No fee DOES NOT mean you are paying nothing, it means they make their money on the exchange rate, around 5% at my bank. The newspaper rate is NOT your rate. ATMs

Michael Dec 26th, 2011 10:27 AM

<i>No fee DOES NOT mean you are paying nothing, it means they make their money on the exchange rate, around 5% at my bank.</i>

Not true with BofA's partner banks or with my credit union's ATM card. At most the rate differs by 3/10th of a percent from the rate posted here: But does this apply only to U.S. accounts?

Pegontheroad Dec 26th, 2011 10:43 AM

I agree with the above. I usually charge larger amounts to my Mileage Plus Visa, even though I pay 3% on the charges. In the past 8 years, my Visa has earned 6 trips to Europe, so paying the 3% on foreign charges is worth it to me.

It would be more economical to pay for everything with cash withdrawals, but I do like those (almost) free trips.

My bank, Wells Fargo, charges a $5.00 fee for every withdrawal, so I usually charge the daily maximum ($500 in my case) and then keep it in my money belt. I've never lost money that way.

I keep smaller amounts in my pocket or purse, so that I have it handy when I want to spend it.

I'd never ever leave a large amount of money in my room.

doug_stallings Dec 26th, 2011 10:59 AM

Michael, the fee is for changing U.S dollars to euros in the U.S. That's where the fee comes in, not at the ATM in Europe. Everyone agrees that the exchange rate at a European ATM is not greatly inflated; you just have to deal with a foreign-transaction fee and perhaps a non-bank ATM withdrawal fee. It's almost always possible to avoid the latter by using a bank that's affiliated with the U.S. bank.

Michael Dec 26th, 2011 12:19 PM


Perhaps I was not clear. I have the impression that Canadians to not have the option to have deposits in no fee banks on their side of the Atlantic. I know that the use of an ATM is not charged in Europe unless the ATM is not affiliated with a bank.

Michel_Paris Dec 26th, 2011 12:26 PM

I must ask for more info. The'newspaper rate' is for very large transactions. Since banks are not charities, why would they run a business that loses them money? 3/10 of a percent makes no one money

Renaud Dec 26th, 2011 12:39 PM

Avoid carrying much cash. My wife asked what I thought of of couple of men checking out my butt while walking around Rome. Yes, they were looking for my wallet, or at least the wallet I was not carrying.

There are US banks with minimal ATM fees and good exchange rates. It can be annoying to see the value of the dollar decline while you are in Florence, but it is exciting to see the dollar improve. Fluctuation is the norm, but you will get a better rate in Florence than in most American banks.

As you see from the comments of most of the above, don't carry much cash. It is a roll of the dice that you are likely to loose. Be safe!

Michael Dec 26th, 2011 12:44 PM

I can only tell you what I have gotten as a rate. However, I believe that the rate posted on (I think that it is the same for any web posting) represents the average between the buy and sell rate, and the banks might be making money on that. Or it is simply a courtesy to their customer, in the same way that their ATMs are free for their own customers in the States. Some banks even reimburse charges occurred for ATM withdrawals up to a specified (5? more?) maximum amount of transactions. In addition the banks invest our deposits and mostly do not give any interest on checking accounts; that is money sitting in the bank until it is withdrawn.

qwovadis Dec 26th, 2011 12:50 PM

Go a lot actually trade these currencies daily.
for current exchange euro is tanking big time at $1.30/USD now
could be below 41.20 in a few weeks so hang on to USD as long
as you can.I carry currently 3 no foreign exchange Visa CCs Venture double miles on everything
Chase 60000 points with first use and 70000 points with first use.I will run with them all year fee free and close them.0% liability on these.

I do NOT travel with Debit Card too risky for "skimming"
Always carry back USD in my money belt just in case.
ATM local currency if needed from big bsnks only
and pay off quickly as they are treated as cash withdrawal.
Works GREAT for me... other good tips.
Beware all money changes extra fees over 30% sometimes
expecially around airports biggest scam in europe.

Good luck!

qwovadis Dec 26th, 2011 01:04 PM allows you to graph this Euro was
$1.40 just a couple of months ago now $1.30 soon
probably to be below $1.25 to 1 USD.

These are the honest correct FOREX rates
Changers and many banks give you an inflated bogus
exchange rate.So know exactly what the daily rate is and walk if you do not get it.Visa credit cards are required always by law to give you the FOREX rate many with no foreign exchange
fees like above..

qwovadis Dec 26th, 2011 01:06 PM wise leaving lots of cash in your apartment is EXTREMELY unwise.

Magster2005 Dec 26th, 2011 03:42 PM

Agree with all of the above that it is much better to get cash from ATMs as you need it and use credit cards.

To avoid the foreign fees, open a Capitol One credit card and a checking account with an ATM card (you can open both online). I have no affiliation with Cap One, I just love avoiding the 3% foreign transaction charge on my credit card purchases and eliminating the $5 per withdrawal foreign fee on my ATM transactions.

Have a great time in Florence!

Michel_Paris Dec 26th, 2011 08:10 PM

Banks don't give 'bogus' rates, they quote customer rates to make a profit, my bank being ~5%..and that is OK, they need to make a profit.

to calculate their profit margin,look in newspaper to get the international rate.
my bank is a large bank, so they would be getting near that rate. Unless XE is alo very large, they would pay more for euros, then need to add on a profit margin above that.

more for me to research:)

madameX Dec 26th, 2011 08:22 PM

Agreed with all of the information above. We keep a Capital One account specifically for foreign charges, i.e. no exchange fee.

Also: before leaving the U.S., we get enough of the local currency to get us where we want to go, and perhaps for a meal. I remember arriving at Charles deGaulle one morning on a Sunday or Monday. All of the ATM's were out of cash, and the exchange businesses get a hefty fee and had very long lines. I was glad I had enough euros to take a cab to my hotel and work from there.

(Yes, I know there are cheaper airport shuttles, but I treat myself to a cab when I'm jetlagged.)

The point: perhaps convert enough currency to get you settled in your destination, but I would not convert a lot in advance.

kybourbon Dec 26th, 2011 08:57 PM

>>>>Michel_Paris on Dec 26, 11 at 4:26pm
I must ask for more info. The'newspaper rate' is for very large transactions. Since banks are not charities, why would they run a business that loses them money? 3/10 of a percent makes no one money<<<<

Many of us in the US can and do get the interbank rate you see in the paper or on or when we use our ATM cards in Europe. Most get that rate because they are using their ATM card from their credit union. Credit unions do not charge the fees that banks do and don't mark up the exchange rate. I get the interbank rate for transactions on my credit union issued Visa and Mastercards also. You can compare the rates on your statement to the actual rates for that day by using the history function on xe or oanda. Just pull up the rates for the date of the transaction on their websites.

matthewl - You will be better off using your ATM card in Italy for money even if your bank charges a 3% rate. If you bank at a credit union, you will get a better rate (most only tack on 1% to the interbank rate at most). When you get money in Italy, be sure to use a bank ATM. You must have a 4 digit pin. You also need to know what your maximum withdrawal is and convert to euro. If your limit is $400 you will need to figure out about how much that is in euro so your transaction won't be over (currently $400 is 305€).

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