Credit card that doesn?t charge 3% fee for converting Euros
 

Seems both my credit card and bankcard charge a 3% fee to convert from Euros. Are there any credit cards that don't have a fee or have a lower fee? Also, how is it best to pay for things? Charging, paying w/cash, paying with travelers checks. And what about getting US$ traveler checks and converting in europe, vs. getting euro travlers checks in the US? Which has the best exchange rate?
Thanks

A while ago someone posted that an MBNA Mastercard charges perhaps 1% exchange rate. You could see if that is available.

I am in Canada and every card I have seems to charge in the range of 2.25-2.75%. However, my American Express gives cash back so I use that one anyway.

Check with each of your credit cards, but I think it is across the board now. You might want to see what your bank's ATM charges are- mine were prohibitive, so I have opened a different account for this purpose.

This 3% fee started about 2-3 years ago. I had called my credit cards to authorize the foreign use, and never knwe anything about this policy. I came home to a bit of a shock. Luckily I didn't spend much, just a few meals. Everything else was in cash.

Visa & MC charge 1%. Most banks add another 2% just for the heck of it. MBNA, USAA & Capital One don't (at least last time I checked). Amex has a total of 2%.

Don't bother with TC. Difficult to use and expensive. Just use your ATM card everywhere to get cash in the local currency. You'll get the best possible exchange rate. Just ask your bank how much they will charge for withdrawals from banks out of their network. European banks won't charge for using their ATMs, but your bank might.

Anne

Do check with your bank and see if they have reciprocal agreements with other banks in europe for ATM use. Bank of America does not charge if we use BNP Parabis in France or Barclays in the UK.

Just checked this a few weeks ago before an overseas trip. Three of mine charged a total of 3%...Only USAA (Mastercard) charged the lower rate of 1% !. The 1% is MC, and USAA charged 0%.
Most banks charge an additional 2% on top of the usual MC and Visa charge of 1%.

I did call and ask my bank about ATM withdrawels. I am charged 1.50 fee from them, plus whatever the fee is at that ATM machine, plus a 3% fee. So once again I get hit with the 3%. And that is with the banks that 'share' the same system as them.

We are going to Europe for a month, so we are going to have a lot of expenses. So I'm willing to open a new checking account for an ATM card, or open a new credit card if it will help save some money.

Is there any ATM cards that don't charge a fee plus 3%??

Maybe I'll call Bank of America to find out about their ATMS... any other ideas are appreciated!

I can confirm that MBNA and Capital One do not charge extra % for foreign purchases. They will charge their customary cash adv fee if you use them at an ATM.
My Wachovia check card allowed 3 free non-Wachovia withdrawals/month, then a $2 fee per withdrawal was assessed for ATMs in Europe. Purchases (ie. hotel room) are treated like credit-card purchases, no extra fees.
Once you go to Europe, and think you will return, get 100E or so before leaving to fund your first day the next trip. Much better than a)buying in the States before departing or b)finding ATM at airport - I like to hit the ground running.

My bank doesn't charge a 3 pct fee for my ATM card, I know because I just used it in Europe about a month ago. It's a local bank in Maryland, though, so I don't know that I would change banks just for that. They do seem to charge about a one pct rate over the interbank rate, though, from my calculations.

I have two credit cards and neither one charges more than the one percent MC/VISA fee -- I have a AAA VISA and a Capitol One Miles One Mastercard.

The AAA Visa card is issued by MBNA.
Last I asked, it charges 1% for non US dollar transactions. No add on.

I just checked with AAA Visa (MBNA),
and was told zero conversion fee.
My American Express wanted 3%.

MBNA doesn't charge you any "additional" fees, but the standard 1% is there in the conversion rate.

My Amex cards definitely have a 2% charge in the conversion, no more no less.

My bank, a local bank in Massachusetts, does not charge a fee for ATM withdrawals abroad, nor does it add 3% for conversion. It is definitely worth shopping around and opening an account to avoid these fees.

Although I knew different banks charged different rates on overseas credit card transactions, I never enquired which had lower rates, etc., so am very glad that I can benefit from the collective knowledge on this thread! Travelnut- I too, have a Wachovia ATM card, and was wondering what they would charge me, as I just returned from Asia, where I used my ATM card a number of times, so that info. was very useful to me, and the MBNA card info. as well. thanks!

They all charge 1% as MC/Visa when converting foreign charges to US currency add a 1% charge to the interbank rate. This is reasonable as it is MC/Visa who are assuming the risks of currency fluctuations.

Once the charge has been converted within the MC/Visa system, the charge reaches your bank, assuming you are in the US, as a USD amount. At that point it makes no difference if the charge was incurred in London, Paris, New York or Timbuctoo. It is here that banks have figured out a way to rip off their customers. Many of these near criminal banks now add a 2% fee. Try to get them to tell you what this fee is for; they have no currency fluctuations to worry about, they don't have to move different currencies from branch to branch which are things which they use to justify the high fees they add on when exchanging USD bank notes for Euro or Sterling or whatever.

Just once, I would love to know what people are being charged for when the banks add an additional 2% to their charge which is what it is, a surcharge for using your credit card. Something banks prohibit merchants from doing (ah the hypocracy).

Of the big credit card banks, only MBNA and Capital One do not add an additional 2%. Yet many people call them and are told there are no currency exchange fees; there sure as hell are i.e. the 1% Visa/MC asses.

OTOH there are the ingorant fools who brag that they use Citibank credit cards (or Chase or Bank America or Bank One) and don't pay an additional fee. They don't read bulletin boards, they don't read inserts, they don't read articles on the net.

The banks lost a multi million dollar law suit because of their failure to notify customers about these fees; and they fought it like the dickens. Imagine, they don't want people to know how they are being ripped off.

The other problem, of course, is that when the fees were first instituted, they might have been still born if people had all voted with their feet and told these banks to shove it and moved to the banks, at least for their foreign charges, that don't asses an additional 2%. But the banks' surveys showed people are idiots and don't mind being ripped off.

Incidentally, just for the record, Amex charges 2% above the interbank rate. But do remember, there are many merchants in Europe who take MC/Visa but won't touch Amex with a 10 meter pole.

Also be aware that many credit union banks do not charge the additional fee; but some, who depend on the near criminal banks to do their credit card processing, do.

Hi eb,

As noted:

VISA and MC charge 1% over the bank exchange rate.

MBNA does not add an additional fee.

AMEX charges 2% above the bank rate.

European ATMs do not charge a fee to give you Euros. Your bank will charge you a fee for "out of network" use of your card. This can be anywhere from 0 to $3.50 each time you use it.

Your bank may add 1 - 2% above the exchange rate for ATM withdrawls.

Traveler's Checks, denominated in dollars, are useful for emergencies, but not much else.

We charge as much as possible and use ATM's only when necessary.

MBNA Mastercard and State Farm Visa don't charge the extra amount. Chase Freedom charges the 1% but then they tack the 2% on top of the amount that already has the 1% added so it's really more than 2%. That doesn't sound like much, but if you have a large hotel bill it makes a big difference.

I have found USAA FSB to be unmatched in terms of customer service. They are not a local bank, so they are used to dealing with people around the world.

Their credit cards give the very best exchange rate.

Their ATM cards have no fee for ATM usage, and they actually rebate any ATM fees imposed by local ATMs, up to, I think $15 a month. Of course, there is no local ATM fee imposed by european ATMs, anyway.

You can access your accounts on-line, and even transfer funds on-line.

We have used their services in travels to Europe, Asia, and Kentucky, and have been very satisfied.

I second the comments about USAA FSB out of San Antonio, TX. We live in Washington, but still use them.

A bit over a year ago, because of a thread here on Fodors very much like this one, I obtained a Visa card from the Motley Fool, the financial radio program. The card is issued through MBNA, so there's no additional fee beyond the 1% Visa fee, and the card pays 1% cash back on all purchases. Unless there's some hidden charge somewhere that I'm unaware of, that nets out to zero surcharge on foreign purchases.

One way to get money with no charge is to have a Citibank account in the US. If you go to the Citibank ATM in Rome or Florence, you will get your money, a good exchange and no fees. I have used this method in Spain, Paris, and Mexico. The only problem is you have to find the bank during banking hours.

eddiB, the Citibank ATMs are accessible outside of banking hours -- you just need to insert your card to get in. I bank with Citibank and I like the fact that their foreign branches are usually located quite centrally (Bond Street in London, Champs-Elysees in Paris, etc.).

I heard from this forum that their credit cards are not competitive for foreign purchases though because of the fees.

Capital One does not charge a fee but Visa charges 1%.

I phoned both my Visa and Mastercard companies before we left for our trip on 7 May. Visa said they charge a 2% fee and Mastercard charges 1%. We just returned from our trip and used our Mastercard.

Do not get travelers checks. Use your ATM card. We took some US $ and wanted to convert them to Pounds. Went to the NatWest Bank in Edinburgh and they wouldn't do it unless you were a NatWest customer! Decided to just use the ATM card and put the $ back in the bank when we returned. ATM's are easy and everything else is either a pain or there's a fee. My bank charged me $3 for each ATM transaction so try to get enough money to last you several days at a time.

While we are ranting,

Why should a bank charge anything for an "out of network" use of an ATM?

It's not as if they are maintaining the ATM.

All that happens is an electronic message that debits your account.

How is this different from using one of their ATMs?

I'm not trying to be facetious, but the reason banks (or anyone) charges anything is because they can. If consumers were more informed, the banks would find they couldn't get away with it.

Although it is true that the banks have to build and operate the ATM networks (and they cost $millions), it is equally true that they save $billions in labor and overhead by not having human tellers handling things. I think they make enough money by having me do their data entry for them, so I won't pay transaction fees anywhere, as a matter of principle.

I have learned a lot on this thread and am grateful for everyone participating. I live in NYC and am currently using Bank One Visa (platinum card). Their foreign transactions fees are too high!!! I want to switch to MBNA or Capital One VISA (or Mastercard). Can anyone tell me how to apply?? Also, do MBNA or Capital One charge any annual fee? Do they cover all car rental insurances (like collision/theft/damage)? THANK YOU!!

Thanks to this thread, I checked with my credit union and GM Master Card about the "hidden" conversion fee when travelling aboard, and both said that they don't have any. Now, the ATM host machine might charge me a fee, which I guess I'll find out in a week.

When we used our ATM cards in Spain, my credit union card carried no fees. Bank of America charge $1.50. (Now, if we had gone to Bank of America branches in Spain we could have avoided the fee, but who wants to spend extra time just to get money!)

AnneO has the straight story on credit card fees. You can go to their websites and fill out an application online or contact them for an application.

http://www.mbna.com/index_main.html
http://capitolone.com/indexa.php

- Sharon

Currency exchanges are business services. An earlier exchange system simply charged a flat fee. A small charge incurred a large/standard fee. Today the % system seems most reasonable. I use comparisons of fees in my classes to illustrate ideas. The difference between a one percent fee and a two percent fee is how much? Banks are now charging fees for carrying accounts. Patrons carrying large balances have this fee waived. The bank has a balance number it uses to determine when it can cover its costs by lending that account balance. Remember when AX suggested keeping a TC in your billfold as a safety bit? What did they do with that float? Costing credit losses is expensive. Many of the extra fees that we complain of are caused by illegal use of the 'magic credit card'. If everyone paid all their bills, CC charges could fall to less than 1%.

I agree that USAA is the way to go!
I have been a member of USAA for nearly 35 years and their service and products are great!
All V and MC charge 1% and many banks add additional 1 -2% (Citi AA MC has a 3% fee) for conversions as has been mentioned.
ATMs are great if your bank has low/no fees and gives favorable exchange rates. Bank One charges $1.25 per w/d and the currrency exchange rates are pretty good (I think USAA may be a tad better).
Travelers' checks can be a ripoff if fee based and the exchange rates on those are often unfavorable.
M

>If everyone paid all their bills, CC charges could fall to less than 1%. <

And if the banks sopped flooding the mails with "pre approved" credit cards, they would be even lower.

Capitol One charges no fees. I was in France in May. They only exchanged at the going rate.