My college daughter will be studying in Italy this summer. We are trying to decide best credit card and ATM card for her. Currently she has her own CC, but it is tied in with ours. So, we're thinking we should open a new acct. just for her. What about the CC which have limits on amt. charged? We're not worried she will be irresponsible, just wouldn't want the card to get in the wrong hands. Do you send more than one card plus an ATM card? Please....any advise?

The ATM card must be linked to a checking account to be able to draw money in europe. Otherwise you are taking a cash advance on a credit card -which will be VERY expensive.

What nytraveler said...she needs a checking account to which the ATM card is tied.

Get a joint checking account with her at a credit union if you can (fees are lower). When my daughter studied in Spain for five months, she took two ATM cards from two different credit unions. The one I didn't have access to was frozen not long after she arrived and there wasn't anything we could do about it. The shared account I could keep tabs on, make deposits when needed,etc. She also took a credit card. Notify all in advance that she will be in Italy and the dates.

I will be happy to share with you what I have learned from experience.

I suggest that you talk the matter over throughly with more than one financial business and get their advice. I advise you to do so because I think you need second opinions in this important matter.

We are actually dealing with two issues here: credit cards and what I call spending money plastic which can take the form of a straight ATM card or a debit/cash card.

Credit cards can be used to withdraw spending money from a bank machine, BUT such use is a cash advance and the card holder pays dearly for the advance.

First let's discuss credit cards.
All major banks issue credit cards, but bear in mind that the bank often adds on a fee of 3% to each usage.

I have a Bank of America Visa card, but to date it has yet to see the light of day in Europe because B of A adds 3% onto all credit transactions.

Instead, when in Europe, I use a Capital One Master Card. So far there have been no funny add-ons with Capital One. It has yet to fail me.


Second, let's discuss money plastic.
I personally carry 3 different card that I can use at bank machines. One of them, my Bank of America ATM card usually stays in my pocket when I am in Europe UNLESS I am in the UK, France, or Germany where I can use it at a partner bank.
Why? B of A tacks on a flat $5.00 fee for any transaction that is offnet - that is I use the card at other than a B of A machine or a machine at a partner bank.

Just about any ATM card or debit card usage will result in a 1% add-on, but that is the industry standard. The exchange rate is almost always the bank wholesale exchage rate, also known as the interbank exchange rate.

As a result of B of A's somewhat predatory policy, I have sought ways to avoid its $5.00 fee.

This year I will have with me a debit card issued by Fidelity Investments that is based on my money market account. Fidelity says I will not pay ATM fees. So far that has been true, BUT I have not had a chance to test the card in Europe.

One other possible ploy is to talk with a local Federal credit union. Many of these types of financial institutions issue debit cards. I tried one last year that was a Master Card. It worked in Germany, failed in Switzerland, and worked at most banks in Scotland.

Whichever money plastic you decide to get, make sure it says Interlink on the back as well as Cirrus or Plus and Star.

Bear in mind that ATMs are usually based on checking accounts, although in the case of my Fidelity card, I am using a money market account.

Regardless, the account that you expect to yield money overseas MUST be the primary account for that card.

I also suggest that your daughter have a way to have some emergency cash reserve. One way to handle it is safe, but expensive: travelers checks in US dollars. The expectation is that they will be unused.

I know that tcs are dinosaurs because most merchants will not accept them and the exchanger gets a fat fee for doing so. The safety side is that if lost, the checks can be replaced. Of course their are other ways, and that is one issue you can discuss with the bank or credit union before you decide just how you want to handle the situation.

Unfortunately, most US bank employees are ignorant as sin about international finance, so don't be surprised if you get some vague answers and dumb looks. I once saw a sign that said "Brains cost money; dumb looks are free." In this case, dumb looks can end up costing you money. That is why you need to be prepared before you start asking questions. Don't hesitate to nail them to the wall or to take a walk if you don't like the answers.

Well, that pumps my well dry. I am out of advice. Good luck, and I am confident that your daughter will grow academically and culturally.
I know I did when I was in Europe as a student many many moons ago.

OOPS bad There are other ways.
Phonetic spell + bad proof reading = dumb mistake.

I know better, but I flunked Proof Reading 101 twice.

Absolutely some of the best advise I've read.... on any board. thank you bob brown! This advise will come in handy for many, including me. We will be joining her at the end of her studies and I have a feeling momma and papa will be making more purchases for all the things she has been "waiting" for. Gosh, it stresses me to search for other CC's. I presently use Citi MC AA Advantage and Platinum AmExp (not often though) Dumb question, but where is the best place to begin the CC search?
I appreciate you sharing your "well" of information.

kybourbon: I will look into credit union idea. I'm not too familiar with them, but will certainly give them a try.

Fortunately, DD already has checking account with ATM tied to it (my name is on the acct. also)... would certainly make it easy to make deposits for her. She actually has established a pretty credit record, thanks to making car pymts. so this should help with getting her own CC.

True about TC. Last yr we tried to use them in Italy & it was almost impossible. But, I do agree they would be good for emergency.

It used to be that only 4 digit pins would work, but that is changing. She needs to know the approximate exchange rate when withdrawing money so she can figure what her withdrawal limits will be. If the maximum at the ATM is 250€ and her bank ATM max is $300 she won't be able to withdraw the 250€ (250€=$395).

Because of the "relationship" we have our bank, our checking accounts are fee free, so there is no charge for foreign ATM withdrawals. You may want to check with your bank to ensure that your accounts are "coded" in the most advantageous manner. Our bank also has no currency conversion fees with debit card purchases.

Because the balance of the account for a debit card can be wiped out if lost/stolen without the PIN (all can be eventually resolved, but it's a headache), an ATM only card is useful as well (for the same bank account as the ATM/debit card).
(Some banks will issue only one or the other, but ours issues both.)

It is definitely advantageous to find a bank with the lowest possible ATM withdrawal fee (if you can't find one with none) so it doesn't cost $5 per withdrawal. The temptation is to make higher, but fewer, withdrawals, which means carrying around more cash at a time than necessary

Of late, Capital One is the only issuer of credit cards without currency conversion fees, but there are rumors flying that this is changing, though perhaps not for all of their various products.

I wouldn't bother with travelers checks. Just something else to keep track of...along with the numbers. And, all depending, they are not as easily/quickly replaced as you might think.

For me, plastic cards are easier to secure than paper travelers checks.

A debit/ATM card, ATM only card, and a credit card should be plenty.

In a real emergency, you can always wire her some money.

Of course, it's essential to have a list of the phone number for each card that can be used from Italy, in the event any are lost/stolen.

Although you have gotten a wonderful explanation from Bob Brown, I am going to add my two cents-from a parent who has had two kids abroad( in Italy and Sicily) and as one who travels almost everyweek to Rome.

Be sure that she arrives in Italy with two different credit cards and two different ATM cards. Do not have them tied to your personal accounts with higher amounts!As others have advised-Be sure that you are listed on her accounts before going so that you can add,monitor,etc. without any hassles. Advise her that when she is going out, that one set of cards ALWAYS stays home and hidden.

My son(first child) was studying in Torino,Italy and coming home on a bus from a soccer match-lost everything with his wallet when the bus lurched around a corner.(He went to college outside of US and had traveled extensively beforehand so was pretty streetsharp about stuff). We got the call in the middle of the night from him that the credit card taken from his wallet was OUR Citibank with high amounts that could be added.It took over 9 days to get a replacement ATM and credit card to him which was a real pain.(Always file a police report if you are robbed over there as it helps with credit card company replacements and insurance.) He had to borrow money from friends till he got the replacements as the 800 euros(emergency) worth of travelers checks would not be taken by any bank as he had no account there.Husband had been positive that he wouldn't need two cards of each,yeah right!

So when darling daughter took off for a semester in Sicily,she took doubles of everything! It worked out great .When she needed extra euros to pay rent, it was taken from both ATM's or when she was traveling to Tunisia or Malta, she knew if she got robbed that the second set was at home.

Both of my kids and including myself very rarely use credit cards overseas.Your really have to monitor where your card is at all times especially at a restaurant if the card is taken out of your view.Stores can be interesting too? Both of my kids realized that certain days of the week caused certain ATM's to be out of money-ie.Mondays in Sicily are really bad,so they learned to figure out what kind of money they needed a week ahead to plan accordingly.

If she is studying in Florence, it is wall to wall American students especially in the summer. She will have a fabulous time in Italy and will have memories for a lifetime!

Duty free makes some good points.

But, when I'm traveling alone, I head out for the day with just a bit of cash and one card. The rest is secured in the room/apartment.

Also, if you want to budget her spending, many banks will allow you to set a low daily limit/number of transactions.

My daughter is currently a student on her gap year backpacking around SE Asia and will be working in an orphanager in Vietnam during May.

We are from the UK, and our banking system is slightly different to yours from what I have read, but I hope that what we have done may help you a little.

Before she left she transferred her savings into one of my accounts. We opened a separate joint bank account into which I pay a certain agreed amount each week, and can top up if she needs more. I can check the balance here at an ATM and she can withdraw cash wherever and whenever she likes. So far this system is working well. This also means that if the card is lost or stolen I have all the account info and can get things sorted quickly from this end. And the bank we chose does not charge for withdrawals abroad, which is good as she prefers to draw out a small amount each day rather than carry a lot of cash with her.

She also has a credit card strictly for emergencies which is linked to my CC account. Do not draw cash out on a credit card unless totally desperate as you are charged interest immediately!

She also took with her the ATM card from her personal checking account, so she has a back up if necessary but she wasn't planning to use that account.

In the worst case scenario I suppose I would be able to wire some money over to her via Western Union or American Express.

Scan both sides of the cards and email this to yourself and your daughter so you both have access to all the relevant information if need be.

My daughter has been in France for the year studying in Strasbourg. Though she has a credit card she almost exclusively uses her debit card for all purchases and for ATM withdrawls.

We had been a faithful BofA customer for almost a lifetime but as poster above puts it- their "predatory policy" for customers wishing to withdraw money in a foreign country made me shop around for a better deal.

We were recommended to try Charles Schwab and both my daughter and I have been very happy with this account. It is a fee-free, interest bearing (for what its worth now), account with no foreign transaction fees and they will reimburse you for other banks ATM charges. I believe that the Fidelity Investments account that was also mentioned is similar to the Schwab account.

The only problem we have had is the Visa Fraud Protection people calling to discuss "unusual charges" on our account. No matter that we call Schwab and tell them we are traveling - the Fraud people are a separate contractor and have told me they are unable to flag the account from their end with the "traveling to Europe" note. The good news is the do NOT put a hold on the card, just call to try to talk to either my daughter or myself to discuss these charges. I either get Schwab to talk to them, talk to them myself, or ignore them. Of course, I had BofA call me as well recently to discuss a gas purchase in Indiana - I suppose they are trying to prevent fraud losses.

Anyway - I highly recommend the Schwab account, especially for people who travel.

Doesn't your daughter have her own checking account? Why not use the ATM card from there? If she doesn't have her own checking account, I would have to ask why.

As for the credit card, I would just review the fraud provisions and send her on her merry way. As long as you aren't worried about her being irresponsible, and you don't seem to worry about theft/loss at home, why worry about it in Europe?

If you have an AMEX card, I would consider getting her a card for that. It may not be as widely accepted, but they have the best support for travelers, so if something went wrong, she could get access to money and a replacement card much easier with an AMEX than with anything else.

In short, I would think the ATM card (I am assuming she already has) preferably with a debit card function, plus the CC she already has, plus an AMEX (if available) would be plenty.

Hi kk,

I suggest

2 Credit Cards - you never know when something might happen. CapitalOne is best for foreign transactions.

If she can't get her own card yet, it doesn't matter if it has to be tied to your account - she will be the only one using it.

2 ATM-only cards - again because something could happen.

About $500 in USD Traveler's Checks for emergency backup. They can be deposited when she returns.

I don't care for Debit Cards because (a) they take your money immediately and you don't get the 3-week float and (b) a thief can deplete your bank account immediately - which is bothersome.

The credit card search question is a good one. Almost all of the internet comparisons I see do not list anything about foreign transaction fees.

Most of the credit card rating publications are looking at the percentage you must pay on the unpaid balance, cash back, rewards, etc.

Unless you specifically ask the bank official about foreign transaction fees on the bank's credit card, that information is hard to come by. Don't be surprised if a local bank officer does not really know! I once had a discussion that got a little heated when a guy at a bank told me I could just send a normal check to Canada because Canadians used dollars just like we do!!!!

That is not the kind of information I want!!

Believe it or not, most of what I know came from reading this board and asking of questions at banks.

I found out about the Fidelity debit card because of information that I get routinely from Fidelity Investments because I put a little money there.

One key question to ask any credit card issuer is this: What is the liability if the card is lost or stolen and then fraudulently used?

On the Bank of America $5.00 fee business, I knew it existed because I am a B of A customer. For home banking, B of A is ok, but not ideal.

For foreign use, I try to avoid it using its services because of the costs unless there is a partner bank within range.

This year we are headed to the Czech Republic and Switzerland where there is no B of A partner bank in either country. In those two countries I am hoping that my Fidelity card will be sufficient.

On the issue of travelers checks. I admit they are dinosaurs. I was assuming that in the case of katiekate's daughter that she would be in a city where there was an American Express office. If not, then perhaps the checks are not the best idea.

It is a juicy game we play with a few bucks on the line. Some people argue that it is only a few dollars.
Well, if I make 3 bank withdrawals during the 9 days I am in Switzerland and 1 or 2 more while I am Prague, that is $25. Then if I purchase several hundred dollars worth of hotels, train tickets, car rental fees, etc. I could spend another $1,000. Add 3% onto that and we have $30.00 more. So we are talking about $50 to 60 without really gaining any additional service.

Not an earth staggering amount. Certainly it is not going to bankrupt me, but if you saw $60 lying on the street, would you pick it up and put it in your pocket?

Excellent point Mr. Bob!!!

hello...in preparation for my europe trip at the end of may i did some research on conversion fees on credit and debit cards and i stumbled into this information. according to the article, its information is correct as of dec. 2007.

http://www.bankrate.com/brm/news/cc/20050624b1.asp

Great information Camias. What card did you end up going with? Were you pleased with it (CC) during your trip or is your trip upcoming?

I have to confess to not fully understanding the frequent discussion on this forum with the cc conversion fees. For the average traveler, that is abroad for maybe 2-3 weeks per year, you have to ask if you are missing the forest for the trees.

One should weigh the overall costs and benefits of the card and how you use it.

- If you carry a balance, even if only for a month or two after a vacation or large purchase, then interest rates might be more important than fees.
- If you earn miles/points with the card, you should value that benefit against the fees. Same with cash-back cards
- What about annual fees? For some these are a no-go, others think the Amex Platinum annual fee is a bargain, due to the travel perks.
- Do you get a break on other banking fees, by keeping the credit card with your bank?

There are all sorts of considerations around which card to choose. And for many, the foreign fees may be the deciding factor. But I just think it important to remind folks not to lose sight of the big picture in a quest to save $50 on their next European vacation. Think about how well the card works at home, as well.