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Currency Exchange: What a RIP - OFF !!!!!

Currency Exchange: What a RIP - OFF !!!!!

Sep 12th, 2003, 01:03 PM
Original Poster
Join Date: Aug 2003
Posts: 17
Currency Exchange: What a RIP - OFF !!!!!

Is anyone else just really pissed off with the exchange from US to Euros?

My husband and I will be leaving for Italy very shortly. We've been planning the trip for months and have realized that the US dollar has not been strong but it just seems like everyone is cashing in on the fee for "rate of exchange". If we use travlers checks theres a certain percentage tacked on just for them to cash them, Then, if we use our ATM card, I realize there's the few dollar charge to use the machine BUT then there is anywhere from 2 to 5 % "rate of exchange" tacked on and I believe they do the same for your debit card.

Any tips, what's the best thing to do? Has anyone beat the sytem?
cemcem is offline  
Sep 12th, 2003, 01:14 PM
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Hi cemcem,

What is this about "there is anywhere from 2 to 5 % "rate of exchange" tacked on and I believe they do the same for your debit card"?

I have been under the impression (delusion?) that ATMs provide currency at about 1 pt over the bank rate, without any additional charges.

As far as using your debit card, it is your bank that might be adding additional points to the bank rate.

I suggest that you not use TC's for the reason you mentioned, and use charge cards as often as you can (MC and VISA add one point, MBNA doesn't add anything to that, AMEX adds 2 pts) and ATMs when you must have cash.
ira is offline  
Sep 12th, 2003, 01:16 PM
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Posts: 5,271
What to do...quite simple

1. Call your bank and see if they charge for using an ATM in a foreign country. If they do, open an account with an internet bank that doesn't (USAA is one). Transfer enough money for the trip (BTW USAA has a free checking account, provides an ATM card which allows I believe 10 free withdrawals from ATM's world wide without charge and reimburses you up to $15 a billing cycle if domestic banks tack on the nasty $1.50 to $2 charge for using their machines, European banks do not).

2. Check your credit card company. Hopefully it is not one of those banks charging the additiional 2 to 3% charge for foreign currency. If they do, go to a bank (USAA is one) that doesn't and immediately apply for a credit card to use only for foreign transactions.

3. Bring about $300 in US currency to serve as a back up.

4. Use credit cards everywhere they are taken even for small amounts. If using one of the credit cards that doesn't charge the additional fee it is the best you will be able to do.

5. Use the ATM's to get spending cash for those few places that do not take credit cards. You can pull out 50 Euro at a time as you will not be spending that much cash using recommendation 4 above.

6. Don't worry about what is going on with the Euro vs the dollar. You can't do anything about it.

Just enjoy.
xyz123 is offline  
Sep 12th, 2003, 01:17 PM
Join Date: Jan 2003
Posts: 8,289
The only bank charges at European ATMs are made by your own bank. The European banks do not charge a fee. ATMs and credit cards are the way to go, with travelers checks taken only as "just-in-case" emergency funds.
HowardR is offline  
Sep 12th, 2003, 01:24 PM
Join Date: May 2003
Posts: 8,201
We found that there were no additional charges from the bank when we used a debit card, and just a 1% charge for using a credit card in Europe this summer. The exchange rate was pretty good.
abram is offline  
Sep 12th, 2003, 01:27 PM
Join Date: Jan 2003
Posts: 4,995
The debit card is, by far, the best way to get cash when you are overseas. I believe it is accurate to say that most of us use credit cards when making purchases and debit cards to get cash. Exchanging money back home, except for perhaps $100 or so to get started, is the costliest way of getting euro.

There's been lots written on here about this subject; try a search to get other opinions.
grandmere is offline  
Sep 12th, 2003, 01:30 PM
Join Date: Feb 2003
Posts: 52
I have read in a recent travel magazine that American Express is the best credit card to use...not sure what Ira is referring to? Citibank Visa/Mastercard and USA Bank 1 (I think that is what is was called) are the worst with the highest fees. MBNA was somewhere in the middle.
patsy is offline  
Sep 12th, 2003, 01:35 PM
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Take travellers checks in case of an emergency only - most likely you'll be able to redeposit them in your bank upon your return home.

ATMs will give you the best rate of exchange and there should not be a fee from the foreign bank. As others have stated, contact your own bank and find out if they charge a fee to use foreign ATMs. Also be sure you're using your banks ATM card, not your credit card to get money (you'll be hit with "cash advance" fees).

You'll also need a 4-digit (no alphas) PIN number for use outside the US.

Also ascertain from bank that you holds your credit cards, what percentage they charge and if they have a foreign currency exchange fee.

If you don't like what you hear, change banks for your credit cards.

It's also a good idea to have more than one ATM card (in case machine "eats" card) if for some reason one doesn't work.
Sep 12th, 2003, 01:39 PM
Join Date: Jan 2003
Posts: 5,271
Amex charges 2% on the interbank rate for foreign currency exchange. The problem with Amex is that while it is fairly widely accepted in Europe, there are many merchants who take MC or Visa but do not take Amex (London Underground and RATP in Paris are examples but there are lots more) so it might be a mistake to rely on Amex only although again it is widely accepted but not as widely by a wide margin as Visa/MC.

The biggest offenders in the extra 2% charge on credit cards are the big credit card banks (Citibank, Chase, Bank of America, Bank One (First USA)). They all impose the 2% additional charge whether they spell it out on the statements or not for a total of 3%. Other banks do too.

Of the big credit card banks, the ones that don't are MBNA and Capital One. Lots of other banks don't either but that would include many of the credit union banks (although some have their credit cards processed by one of the big banks so there is no general rule to this).

xyz123 is offline  
Sep 12th, 2003, 01:40 PM
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Posts: 1,998
Rip - Off, May we inquire as to what you do for a living? Changing currencies is labor intensive. Someone has to pay for the person manipulating the monies. Shop around someone may do it for less! It will never be without paymemt. History notes people shaving silver and gold coins. Polite suggestion, skip a meal, buy one less gift.
GSteed is offline  
Sep 12th, 2003, 02:11 PM
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actually, exchange rate differences are not something I get upset about or bothers, no. Some misinformation above from a travel magazine re credit card costs, also (I have MBNA card and there are no extra fees).

It surprises me that being able to travel around the world and receive money instantaneously that will be deducted from your account back home, by simply sticking a card in a local machine you pay nothing for-- is a considerable service and convenience that some people thing should be given them for free. There are few other things that someone thinks should just be given them for no reason. There is software, labor and hardware all involved in these transactions, so a 1 pct fee on credit cards or $1-2 ATM fee by my bank is extremely reasonable to me for the service. It is just another travel cost and such a tremendously greater value and worth for what you get than many other things (ie, $5 cups of coffee at a cafe).

As others have pointed out, cemcem doesn't know the basic facts, so why get all bent out of shape over something you don't understand. My debit card has no extra rate tacked on, and I know that. Now how strange is it for something who is planning a major trip to Italy from the US to whine about a few ATM fees out of their entire budget and what they are spending.

I don't even whine about currency exchange fees when I choose to use them to exchange TCs (which is not often), as I know enough to be able to evaluate rates to get a reasonable return (I almost always can get them cashed for a loss about equivalent to the 3% or so on many credit cards). This isn't a big major item in my travel budget and I consider it a cost of travel, no different than the other costs.
Christina is online now  
Sep 12th, 2003, 02:18 PM
Join Date: Feb 2003
Posts: 52
My apologies, after re-reading the article I realize that MBNA does not charge a fee. Sorry I should have re-read the article before posting. American Express is still rated the very best but like someone else mentioned, it's good to have a back up Visa/Mastercard incase a merchant doesn't accept AmEx.
patsy is offline  
Sep 12th, 2003, 02:19 PM
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Posts: 376
I agree with Christina. I'm not sure what all of cemcem's fuss is about. I will not be charged a fee for overseas ATM usage by my bank (because I'm a long-time customer and I asked them to waive the fee, which they agreed to do.) and, so far, any overseas transactions I have made so far (deposits for hotel rooms, advance online travelcard purchase, etc.) have cost me between .75% and 1% above posted market rates the day of the transaction. We're talking, literally, a couple of dollars. Furthermore, you are not charged on the European side to use the ATM at all.

The only thing was even remotely pricey was getting some foreign currency in advance. Even then, for $500 worth of currency, I paid a little less than $20 for the CONVENIENCE of having local cash in hand when I land. Money well spent, I say.

Considering that this trip, as a whole, is costing me a few THOUSAND dollars, the few dollars I have and will spent in currency exchange here and there are, to me, well worth it.

Jennie is offline  
Sep 12th, 2003, 02:22 PM
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I'll step out on a limb here. It would be wonderful if you could freely exchange currencies for absolutely no cost, and we all like to pay as little as possible to exchange money. Many of the above comments are helpful. But again, let's be reasonable here:


When you go to a store and buy something, do you really expect the store to sell it to you at their cost? Can you imagine getting a deal on buying an item that is only marked up 2 or 3% above the seller's cost? When you stop and think about it, the exchange fees are pretty minimal, especially if you follow the suggestions to keeping them at a minimum.

Patrick is offline  
Sep 12th, 2003, 02:45 PM
Join Date: Feb 2003
Posts: 26
Hi cemcem,

I too bank, insure, etc. with USAA and they are great to work with. However, please note the following requirements to join: Who's Eligible
Active duty, National Guard and Reserve enlisted personnel, officers and officer candidates, and their families are eligible for membership in USAA.

Should you qualify they will also give you toll free numbers to use in all of the European countries to call in case of an emergency. i.e. If you are traveling to France they will give you a number to call in case you loose your card or it is stolen.

Have a great vacation!
Lil is offline  
Sep 13th, 2003, 08:16 PM
Join Date: Feb 2003
Posts: 786
Firstly try dealing with our exchange rate, the NZ dollar which is $1NZ to 0.52 cents euro and see how you like them apples.
Secondly, in MHO a trip to a far off country such as Italy with all the rewards that go with it is worth a million dollars to me as have all my experiences in Europe been thus far so I don't concern myself with the small amount lost in exchanging, it's something you have to live with no matter where you go. You will lose buying your money and you will lose when spending it so just go with the flow.
KathyNZ is offline  
Sep 13th, 2003, 09:17 PM
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I don't know..nobody at USAA ever asked me if I qualified when I opened accounts with them a couple of years ago.
xyz123 is offline  
Sep 14th, 2003, 06:05 AM
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Kathy, please don't fall into the trap of thinking that the actual number of one currency against another really means much of anything. If that were true, then a few years ago in Italy when we got 2000 lira to the dollar, it would seem that everything was 1/2000 the cost of what it would be in the US. Not true.
Patrick is offline  
Sep 14th, 2003, 06:44 AM
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Posts: 15,107

God, grant me the serenity
to accept the things I cannot change,
courage to change the things I can,
and the wisdom to shop around.
mrwunrfl is offline  
Sep 14th, 2003, 07:24 AM
Join Date: Sep 2003
Posts: 149
I agree with Christina and Patrick. You will pay some type of fee whichever route you take. I "purchased" some euros so I would have local cash when I get to Italy. What's a few dollars when you are spending a couple thousand on a trip?
jmb67 is offline  

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