Euro Travelers Checks

Old Mar 25th, 2002, 07:58 PM
  #1  
Laura
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Euro Travelers Checks

One last note on our Provence/Paris trip. My friend got her travellers checks in Euros - I know there was a thread about this recently. I can report that they are not widely accepted yet in restaurants or shops, either rural or urban. She had no problem cashing them at a change or AmEx counter, but when we tried to use them to buy food or gifts, they were not easily accepted. They may be in time, but not yet.
 
Old Mar 25th, 2002, 08:09 PM
  #2  
janis
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With a few exceptions, it is almost never a good idea to get Trav Checks in the currency of the country(s) you are traveling to . If one needs travelers checks at all is is almost always better (and much chaeper) to get them in your home country's currency.
 
Old Mar 25th, 2002, 08:13 PM
  #3  
xxxxx
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I'm not a fan of traveler's checks at all, but I disagree with Janis. If they are in your home currency they will be even less accepted in Europe, or if accepted at all, you will take a real beating on the exchange rate they give you. The idea of having them in your home currency so you can use the unused ones when you get home doesn't make much sense to me. Just use all the ones you have left at your last stop on your hotel bill, so you won't have any to take home.
 
Old Mar 25th, 2002, 08:24 PM
  #4  
janis
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xxxxx: the point I tried to make is "If one needs travelers checks AT ALL . . ." get them in the currency of your home country. One should not rely on Travelers' Cheques for day to day money - they are the most expensive form of spending money. And if you buy them in a "foreign" currency at home you pay a large premium - either in a lousy exchange rate or in a fee.

Because so many small establishments do not accept them, you don't use travelers cks to buy things, but convert to the local currency. So between them being cheaper in your home currency (especially if that is the $) and only needing them for emergencies it is a no brainer.

Use ATMs and credit cards and you save a LOT of money.
 
Old Mar 25th, 2002, 08:41 PM
  #5  
Bob Brown
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I never have known travelers checks in any denomination to be accepted by businesses on the Continent. I have had better luck in London, however.

Has anyone ever had French franc or Italian lira checks accepted in restaurants?

One of the loudest commotions I ever heard was in Venice when an American fellow tried to pay his check with a US dollar denominated American Express check. I can still hear the owner screaming. I cashed the check for the fellow and then took it over to the AE office to redeem it.
(I wish I knew what he was saying, it might come in useful sometimes.)
 
Old Mar 25th, 2002, 08:58 PM
  #6  
stan
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I haven't done this for a few years, but many branches of AAA (American Automible Assoc) have fee-free AE travelers checks in foreign currencies. They worked well in Switzerland where the small hotel I stayed at only accepted travelers checks in the Swiss currency. When I go to France I take along the fee-free AE travelers checks in US dollars for spending money, and exchange them at change places I've found on previous trips that have the best rates and no commisions. But for most things I just use my credit cards.
 
Old Mar 25th, 2002, 09:41 PM
  #7  
Sjoerd
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Travelers Cheques are NOT legal currency and very few establishments accept them. This has nothing to do with the euro. In Europe, cash is king, and debit and credit cards are accepted almost everywhere. TC's are an instrument of the past.
 
Old Mar 26th, 2002, 06:10 AM
  #8  
Patrick
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I just called my local AAA. Today they are selling Euro Travelers'Checks at a rate of 91 cents to the Euro. Yesterday a charge went through my Citibank MasterCard on a prepayment in Italy. The rate I got (even with the supposed extra charges Citibank makes) was just under 89 cents to the Euro. In brief then, the Travelers' Checks are still costing more than 2% more than using your credit card -- even greater savings if your credit card doesn't charge any fees, which mine supposedly does, but I can't seem to confirm. This also does not count any fee you might run into to cash your travelers' checks in Europe.
It is always interesting when people say that AAA doesn't charge any fees for their Travelers' Checks, but you are still at their mercy for the price they sell them at to you.
 
Old Mar 26th, 2002, 06:30 AM
  #9  
ppp
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Yes, Patrick. It also would be interesting to know how much would AAA pay for an Euro denominated TC. I wouldn´t be surprised if they don´t pay more than 85 cents! Loose 2-3% when you buy, another 2-3% when you sell the unused TCs and it´s not difficult to conclude that TCs are among the lousiest deals around!
 
Old Mar 26th, 2002, 06:44 AM
  #10  
Jeff
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Message: I just called my local AAA. Today they are selling Euro Travelers'Checks at a rate of 91 cents to the Euro. Yesterday a charge went through my Citibank MasterCard on a prepayment in Italy. The rate I got (even with the supposed extra charges Citibank makes) was just under 89 cents to the Euro. In brief then, the Travelers' Checks are still costing more than 2% more than using your credit card -- even greater savings if your credit card doesn't charge any fees, which mine supposedly does, but I can't seem to confirm. This also does not count any fee you might run into to cash your travelers' checks in Europe.
It is always interesting when people say that AAA doesn't charge any fees for their Travelers' Checks, but you are still at their mercy for the price they sell them at to you


Just to make it clear, yes you indeed were charged an additional 2% on your Citibank charges as the Euro was trading just under 87 cents about a month ago and the three per-cent mark up (1% legitemately by MC/Visa and 2% illegitemately by Citibank) would be approximately 89 cents. You send like you a skeptical of the people who keep telling you that you are thorwing money away if you use a credit card from the crooks at Citibank...
 
Old Mar 26th, 2002, 06:58 AM
  #11  
cd
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I recently purchased euro travelers checks at my AAA and will never do it again. I had to cash them at a bank as no one accepts them. There are ATM machines in the airport and certainly the way we will go from now on, along with credit cards.
 
Old Mar 26th, 2002, 08:14 AM
  #12  
Patrick
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No, Jeff, not skeptical. It's just that I've never been able to get a straight answer from Citibank as to what their exact exchange rate is or what they might add. And the same was true for the companies I called to compare their exchange rate. No one could ever tell me exactly what their rate was on any given day, so I still don't know if their exchange rate is the same or less than Citibank or others who charge a percent or two over what may be a different rate.

I am perfectly happy paying an extra 2% if necessary, as I value my frequent flyer miles from American. If it weren't for my credit card purchases, I wouldn't have a totally free round trip in Business Class this summer from Miami to London, then to Amsterdam, and returning from Paris. This translates to over a $7000 value, for 90,000 miles. Ignoring what the "experts" say frequent flyer miles are worth, my flight translates to a value of about 8 cents per mile, so I really don't mind paying a little less than 2 cents per mile to get them. The little bit of extra to get those miles seems worth it to me. And I still say that since 88 cents is a better rate than you could get exchanging cash or travelers' checks, then I'm not really upset.
 
Old Mar 26th, 2002, 10:22 AM
  #13  
Jeff
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It's just that I've never been able to get a straight answer from Citibank as to what their exact exchange rate is or what they might add


It's written in the agreement. MC or Visa actually does the conversion and it is done at the interbank rate at the instant the charge hits the MC or Visa system. It has nothing to do with the bank that issued the card. MC or Visa then add a 1% conversion charge to the converted amount and the charge is presented to your bank.

Let's say you charge something in the UK for £10. The British merchant deposits it and receives £10 (not really as there is a discount rate at every step in the process but we'll ignore it) and is out of the loop. The British bank, seeing the charge is not on it sends the charge to the Visa clearing house and gets its £10 so it is out of the loop. The Visa clearing house now converts the charge using the day's interbank rate. Acording to the paper, the interbank rate today is 1.4256 so it is converted to a charge of $14.26. Then then add on the 1% charge of .14 and the charge is now $14.40. That is the amount that is presented to your bank. It makes no difference if the charge was made in New York, London or Timbucto. The excuse the banks use about currency fluctuatons is a downright lie. They receive a charge for $14.40.

It is here the unethical banks now add on an additional 2% charge approximately 29 cents. So they bill you for $14.69 and may or may not put the exchange rate on your statement.

There are disclosures in the agreement you receive from time to time from your bank's credit card department. But to make a long store short, the two major banks not putting on the additional 2% charge are MBNA and Capital One.

To show how tough the situation is, my Visa card is issued by First USA. Now First USA does apply the additional 2% charge but exempted the British Airways Visa card from it. I read on tis board several weeks ago that United Airlines, whose card is also issued by First USA would begin putting the charge on the card. So I called First USA to try to find out if they were doing the same to the British Airways card.

Well the customer service rep who answered the call said they were already adding on the 2% charge. Obviously he was just a First USA rep to whom the calls are routed. I said no, it wasn't being charged. He said yes it was. I asked to be transferred to a supervisor.

The supervisor gave me the same old song and dance (the charge is a currency convesion charge to protect the bank against currency fluctuations, foreign charges cost the banks more (how, I don't know) and that this is an industry wide practice. I explained to him that the bank had exempted the British Airways card from this asinine sick charge. He excused himself, called the marketing department, came back on the phone and sheephishly explained to me I was right that the British Airways card has been exempted from the fee and that at present there was no intention to add the fee.

Moral of the story, the customer service reps don't have a bloody clue. They and the banks lie through their faces. But if you take a few moments to read the enclosures or to listen to what experts such as myself tell you on these boards, you can save money (at least the 2%) on foreign charges.
 
Old Mar 26th, 2002, 11:57 AM
  #14  
Jason
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Jeff : A good explanation.
The interbank rate changes continually, no? Also the rate used might not be at the time the credit card is actually "run thru" (could be the next day?)
Obviously the fluctuations from day to day are normally very small in any case.
 
Old Mar 26th, 2002, 04:27 PM
  #15  
Christina
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this topic is a little overdone but ... Janis is right and xxxx is wrong. If you use TCs, get them in your home currency. It does make a lot of sense for many reasons. It's a bad idea to use them directly anyway; of course no one will accept them as payment in US$, but they don't much in any currency, they are just a way to transport money conveniently and safely. You do not take a beating on the exchange rate in Europe, it is better than in the US where you'd have to pay a conversion fee if you get them in euros or another currency, they aren't free, and that conversion rate may be worse than in Europe and you'll have to convert them back if you have leftovers. I use them as backup and like them fairly well, I don't have as many problems as other people and seem to find good exchange rates without too much trouble. Yet another advantage of having them in your home currency is that if you are going on another trip in a short time, you can just use the leftovers for the next country.

AAA does not have fee-free checks in foreign currencies because they don't give the bank rate on the exchange rate; they tell people there's no fee but it's in the rate, as I think Patrick noted (I have gotten quotes and compared it to same-day bank rate and found a 2-3% difference).
 
Old Mar 26th, 2002, 07:04 PM
  #16  
jennifer
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Hi, I am trying to weed through the discussion on this forum because I am planning a month long trip to France this coming May and am not sure what to do about travelers checks. From what I can gather I should use my Credit card whenever I can, and maybe have a couple travelers checks that I can take to banks in france to cash into Euros when I need more money along the way. Is the conversion there better so that I will get more euro for my US dollar? Thanks for any help you can give me!!
Jen
 
Old Mar 26th, 2002, 08:00 PM
  #17  
Bob Brown
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Hi Jen. This topic comes up often.
First travelers checks in my opinion are out of date. They are not widely accepted in Europe; to convert one to spending money you usually have to take it to a bank, where you probably will pay a fee. You already paid a fee when you bought one way or the other,usually because the seller did not give you the bank wholesale rate of exchange. So he made 2 to 3% on the deal, at least.

My procedure has been this:
1. Before leaving, I acquire the minimum amount of currency of the first country I visit. I do this so I am not forced to hunt up an ATM machine right away. I usually have just enough for cab fare and a little extra. I know I am paying about 5% extra over here, but this is purely done for my personal convenience, and I know that it is costing me a little.
2. I use my charge card where and when I can. UNLESS, your bank socks you with an extra 2% profit charge, euphamistically called a conversion fee, I would have one with me. BUT ask you bank if it adds a fee onto the 1% that Visa or Master Charge already add. You get the bank wholesale rate, plus the 1%, when you use your credit card. That is of course the most favorable exchange rate that the little trader can get.
3. I use my ATM card for daily spending money. Part of the problem with ATM cards is that some banks charge a fee for using your card at another bank's ATM machine. My bank, BOA, last I heard, charges after the second transaction.
4. I carry a few US dollar travelers checks as an emergency reserve.
I can acquire them at no extra charge and they are easy to use once I get home.

Before you dash out and start getting a credit card and an ATM card, make sure what your bank charges you to do that kind of business. They are getting sneakier all the time about slipping in those extra fees. The 2% conversion fee to me is particularly obnoxious and has already caused me to drop the use one credit card.
 
Old Mar 26th, 2002, 09:27 PM
  #18  
Sharon
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Jeff, do us a favor and quit copying portions of other people's posts into your replies. It's visually confusing when you're scrolling through a thread. Thanks.
 
Old Mar 26th, 2002, 09:48 PM
  #19  
alicia
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OH OH, I just got a packet of Euro traveler's checks thinking I was being smart to use them "as is", rather than going through the hassle of exchanging US$ travelers checks into local currency at an exchange store.

For those of you who went to a bank to get "real cash" in exchange from your Euro trveler's checks, did you pay a large commission or fee to do so? What can I expect? A hassle and more fees? I'll be in Italy, specifically. Using credit cards and cash in London.

Thanks,
Alicia


 
Old Mar 26th, 2002, 11:34 PM
  #20  
stan
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If you're a member of AAA, you can get fee-free AE TCs. They wave the purchase fee, so if you get them in US currency, it's 100% free. If you get the TCs in a foreign currency, then they make a bit on the exchange rate, but at least they wave the purchase fee. I've never been charged a fee to cash AE TCs in France or Switzerland, either in US or the country's currencies, they were treated same as cash. My platinum credit cards (Citi and MBNA and AE Optima) haven't charged me any fees for foreign purchases in the past, and I always got the best rate with the credit cards. But I still take some TCs for emergencies, but only since I can get fee-free ones in US dollars. I haven't been to Europe in 2 years, so maybe my info is out of date.
 

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