Exchange money
Sep 24th, 2011, 12:23 PM
#21
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A couple of things here....for once I agree with flanneruk, he basically does have it right but there is a caveat to it. Most American credit card agreements, most but not all, establish two separate accounts within the account. One for cash advances and the other for purchases. If you pay off the purchase balance within the grace period, usually 25 days, you never pay a penny of interest on it but be careful...once interest starts accruing on purchases, it continues one additonal billing cycle even if you pay off the entire purchases balance on the next billing cycle..you get nailed at that point for all the accrued interest on purchases.
Now as far as cash advances are concerned. Even if it's 20%, it's a daily charge. So if you withdraw $100 in a cash advance transaction on a credit card from an ATM and pay it off immediately on returning home, say three weeks later, flanneruk is absolutely right. The interest charge is a little over $1...the key of course is not to string it out. But what you do have to watch out for are fees on top of the interest. Wells Fargo Bank, criminals that they are, I believe charges $5 for any sort of cash advance and that escalates as the amount of the advance increases on top of the interest. Citibank, Chae, Bank of Amerca are other banks that have large fees on top of the interest for cash advances on their credit cards. So that is something you have to ask about and be aware of.
As far as exchange rates, for the most part visa/mc use the interbank rate as listed in the paper or at xe.com. They add 1% mark up to cover themselves, so they claim, for currency fluctuations. Many of the same near criminal banks we mentioned above, now add an additional 2% fee to the interbank rate for god knows what as they have nothing to do with the conversion for a total of 3%. There is one good guy in all this, namely Capital One, which not only does not add a surcharge on currency transactions but eats the visa/mc 1% fee. Whether it's a cash advance or a purchase, if your card is issued byone of the near criminal banks listed above, you pay 3% above the interbank rate. However, when you exchange cash, a good rate is 10% above interbank and some places charge 15% above interbank rates. And watch out when they say no fees. They add the fee to the percentage mark up. In the UK, a good place to exchange cash is at Marks & Spencer whose Bureau de Change have good rates..
Also watch out for a scam known as dynamic currency conversion. I won't go through all the particulars here but there was a recent thread on this SCAM and how many of the near criminal banks we referred to above also charge the 3% even if your bill is in US dollars.
Finally, different countries really have adopted the "American" way of credit cards in different manners. The UK, especially London, is just like any American city. Almost everybody takes credit cards for just about everything. Arrived at Heathrow, charged my oyster card top up on my credit card. Checked into the hotel, credit card. Topped u p my mobile phone at the convenience store, credit card. Ate lunch at Pret a Manger, credit card. Picked up theatre tickets, credit card. Stopped at a convenience store to pick up snacks for half time at the theatre, credit card. Ate dinner at a moderately priced restaurant, credit card. I was in London for about a week, made one £20 ATM withdrawal and didn't need another red penny (or is it pence?)...howerver, I wouldn't count on this ability in many other European countries such as the Czech Republic where credit cards may not be the same way of life they are in London (Germany, Holland are much more cash societies, in France they sometimes look at you like man you're crazy if you try to charge something for less than 10€ although I've never had that problem in London for amounts as long as they are over £1.
It reminds me of the story of Queen Victoria going down to the dock for the first America's Cup race ready to greet the first British ship to cross the finish line. Suddenly a lone ship came around the bend heading for the finish Her majesty asked her adjutant which of her ships that was. He looked through his binoculars and said, "I'm afraid your Majesty it's the American ship." She then asked, "Which of our ships is second?" He looked through his binoculars again and said, "I'm afraid your Majesty, there is no second." When you travel the best way to travel is with credit cards. There is no second best way to travel!
Now as far as cash advances are concerned. Even if it's 20%, it's a daily charge. So if you withdraw $100 in a cash advance transaction on a credit card from an ATM and pay it off immediately on returning home, say three weeks later, flanneruk is absolutely right. The interest charge is a little over $1...the key of course is not to string it out. But what you do have to watch out for are fees on top of the interest. Wells Fargo Bank, criminals that they are, I believe charges $5 for any sort of cash advance and that escalates as the amount of the advance increases on top of the interest. Citibank, Chae, Bank of Amerca are other banks that have large fees on top of the interest for cash advances on their credit cards. So that is something you have to ask about and be aware of.
As far as exchange rates, for the most part visa/mc use the interbank rate as listed in the paper or at xe.com. They add 1% mark up to cover themselves, so they claim, for currency fluctuations. Many of the same near criminal banks we mentioned above, now add an additional 2% fee to the interbank rate for god knows what as they have nothing to do with the conversion for a total of 3%. There is one good guy in all this, namely Capital One, which not only does not add a surcharge on currency transactions but eats the visa/mc 1% fee. Whether it's a cash advance or a purchase, if your card is issued byone of the near criminal banks listed above, you pay 3% above the interbank rate. However, when you exchange cash, a good rate is 10% above interbank and some places charge 15% above interbank rates. And watch out when they say no fees. They add the fee to the percentage mark up. In the UK, a good place to exchange cash is at Marks & Spencer whose Bureau de Change have good rates..
Also watch out for a scam known as dynamic currency conversion. I won't go through all the particulars here but there was a recent thread on this SCAM and how many of the near criminal banks we referred to above also charge the 3% even if your bill is in US dollars.
Finally, different countries really have adopted the "American" way of credit cards in different manners. The UK, especially London, is just like any American city. Almost everybody takes credit cards for just about everything. Arrived at Heathrow, charged my oyster card top up on my credit card. Checked into the hotel, credit card. Topped u p my mobile phone at the convenience store, credit card. Ate lunch at Pret a Manger, credit card. Picked up theatre tickets, credit card. Stopped at a convenience store to pick up snacks for half time at the theatre, credit card. Ate dinner at a moderately priced restaurant, credit card. I was in London for about a week, made one £20 ATM withdrawal and didn't need another red penny (or is it pence?)...howerver, I wouldn't count on this ability in many other European countries such as the Czech Republic where credit cards may not be the same way of life they are in London (Germany, Holland are much more cash societies, in France they sometimes look at you like man you're crazy if you try to charge something for less than 10€ although I've never had that problem in London for amounts as long as they are over £1.
It reminds me of the story of Queen Victoria going down to the dock for the first America's Cup race ready to greet the first British ship to cross the finish line. Suddenly a lone ship came around the bend heading for the finish Her majesty asked her adjutant which of her ships that was. He looked through his binoculars and said, "I'm afraid your Majesty it's the American ship." She then asked, "Which of our ships is second?" He looked through his binoculars again and said, "I'm afraid your Majesty, there is no second." When you travel the best way to travel is with credit cards. There is no second best way to travel!
Sep 24th, 2011, 01:10 PM
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Flanner UK's calculation smay work in europe but the credit card rules are very different in the US and the cost will indeed be much higher. there is often a flat fee for a cash advance as well as interest - which can be as much as 25% - and will apply to the entire amount on the card, all new purchases as well as the cash advance.
Much better to charge only on a card which has no balance and which you do NOT take a cash advance from. The ATM/debit card should be attached to your checking account and you must have the money you will be spending in the checking account (ATMS in europe don;t allow you to move money between accounts). A bank ATM is europe does not charge anything. You bank will charge some sort of fee - how much depends on the bank and on the type(s) of accounts and balances you have. (SOme people here complain that Citibank is ery expensive, but we are charged no fees for using Citicards - probably due to the mortgage and other accounts we have there.)
All banks and credit card companies charge you a small percentage above the Interbank exchange rate (this is the "official" rate published in the newspaper and online, and which is used only for transactions of millions of dollars or more between financial institutions. You will usually pay 1% to 2% more than this. For perspective, bureau de changes will usually charge you 9-10% over this rate for cash that you change. They may say no fee, and there will be NO FEE, but a really awful rate of exchange.
And if you're very naive and not used to large cities/street wise (NEVER let go of your purse - even in a restaurant or hotel until your bedroom door is locked behind you - among a bunch of other things) your chance of being careless and losing everything increases exponentially.
Finally, as far as the amount of money you are taking - I assume that all of your entrance fees to sights are included - otherwise you may find that you are eating premade sandwiches out of supermarkets. (We do one splurge dinner in each city we visit and an upscale dinner for two with quite a moderate wine will cost at least $300.) Remember that prices for meals in world capitals will be significantly higher than they are in a tiny town. Also, realize that soft drinks are very small and very expensive - about $3 for a tiny soda (US doesn;t have sizes that small). And while local wine and beer can be reasonable, hard liquor or mixed drinks are VERY expensive due to very high tax rates.
Much better to charge only on a card which has no balance and which you do NOT take a cash advance from. The ATM/debit card should be attached to your checking account and you must have the money you will be spending in the checking account (ATMS in europe don;t allow you to move money between accounts). A bank ATM is europe does not charge anything. You bank will charge some sort of fee - how much depends on the bank and on the type(s) of accounts and balances you have. (SOme people here complain that Citibank is ery expensive, but we are charged no fees for using Citicards - probably due to the mortgage and other accounts we have there.)
All banks and credit card companies charge you a small percentage above the Interbank exchange rate (this is the "official" rate published in the newspaper and online, and which is used only for transactions of millions of dollars or more between financial institutions. You will usually pay 1% to 2% more than this. For perspective, bureau de changes will usually charge you 9-10% over this rate for cash that you change. They may say no fee, and there will be NO FEE, but a really awful rate of exchange.
And if you're very naive and not used to large cities/street wise (NEVER let go of your purse - even in a restaurant or hotel until your bedroom door is locked behind you - among a bunch of other things) your chance of being careless and losing everything increases exponentially.
Finally, as far as the amount of money you are taking - I assume that all of your entrance fees to sights are included - otherwise you may find that you are eating premade sandwiches out of supermarkets. (We do one splurge dinner in each city we visit and an upscale dinner for two with quite a moderate wine will cost at least $300.) Remember that prices for meals in world capitals will be significantly higher than they are in a tiny town. Also, realize that soft drinks are very small and very expensive - about $3 for a tiny soda (US doesn;t have sizes that small). And while local wine and beer can be reasonable, hard liquor or mixed drinks are VERY expensive due to very high tax rates.
Sep 24th, 2011, 02:32 PM
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nytraveler..a bit too much generalizing....not all banks have only one account for purchases and cash....as a matter of fact, I would wager more banks than not separate the two accounts and thus it depends on what fees the bank charges for cash advances whether the arithmetic flanner and I did is correct....I have several credit cards that have no cash advance fee whatsoever...and have separate accounts for purchases and cash. The large banks, of course, tend to have the largest fees. But I would never use my main bank for any of this stuff because no matter how careful you are, there is always the chance of a debit card number or ATM card number being compromised and your main account raided. While for the most part, you will get your money back, it's a hassle to change the automatic payments, to wait for new checks with the new account number and all the other things that go along with this.; Therefore it is helpful to have opened, as I have, an account with an internet bank and Keep $1.01 in the account (no minimum balance required) and just before travelling transfer cash into the account for whatever cash I might need (as noted it depends on the country...some countries are much more 21st century in the use of credit cards than others) and I can alway hit an internet cafe to transfer money in (have never had to but that option is open).
TGhen you say all banks charge something aove the interbank rate and that's simply not true. I know from recent travels that Capital One charges the interbank rate (I am sure their bean counters have found that is the claim to fame of capitla one credit cards and the large number of accounts attracted to Capital One offsets the loss they incur by eating the visa/mc 1% fee). I have been using another credit card serviced by FIA (which is the old MBNA which was bought out by Bank of America) that was originally offered by Charles Schwab. This card also does not charge a fee for foreign transactions, eats the 1% visa/mc fee and gives a 2% bonus on all charges....to me it makes foreign charges 5% cheaper as I get the 2% bonus and don't pay the near criminal 3% foreign transaction fee imposed by Citibank, Chase, Bank of America and the evil banks of that ilk. Unfortunately, that credit card is being withdrawn fro circulation as of 31/10/11 and am looking for a replacement. I have found a few that do the rewards, Bank of America is offering to replace the card with its cash rewards card, but then you don't get 2% on everything, although you do on groceries and 3% on petrol although limited for each quarter, you get 1% rebate on everuthing but unfortunately you apparently will have tyo pay the near criminal 3% Bank of America foreign transaction fee. On one of the blogs I frequent, we are still looking for a replacement card and haven't found one yet. The closest I've come up with is an Amex offered by my Fidelity brokerage account which is a credit card with a 2% rebate on everything. But although Amex charges on its cards a 2.7% foreign transaction fee, this card charges 1%. It's a lot to ask for a credit card with all these perks but that doesn't mean we'll stop looking (I just charged to this card with time running out a $5,000 medical bill.....what I do is not have the medical group submit my bills to the insurance company for reimbursment directly and then bill me for the difference; I submit the bill to my insurance company, ask for them to send me the insurance payment and then and only then pay the medical group, a bunch of crooks they are. Easiest $100 I ever made! I will let you know if and when I find a replacement credit card (no annual fee, no fx fees and 2% rebates)...
The main piont being that although many people don't understand it, there is no such thing really s a visa (or mastercard) credit card...there is a citibank visa card, or a Bank of America credit card or a Capital One credit card and they all have different policies so one simply cannot generalize.
TGhen you say all banks charge something aove the interbank rate and that's simply not true. I know from recent travels that Capital One charges the interbank rate (I am sure their bean counters have found that is the claim to fame of capitla one credit cards and the large number of accounts attracted to Capital One offsets the loss they incur by eating the visa/mc 1% fee). I have been using another credit card serviced by FIA (which is the old MBNA which was bought out by Bank of America) that was originally offered by Charles Schwab. This card also does not charge a fee for foreign transactions, eats the 1% visa/mc fee and gives a 2% bonus on all charges....to me it makes foreign charges 5% cheaper as I get the 2% bonus and don't pay the near criminal 3% foreign transaction fee imposed by Citibank, Chase, Bank of America and the evil banks of that ilk. Unfortunately, that credit card is being withdrawn fro circulation as of 31/10/11 and am looking for a replacement. I have found a few that do the rewards, Bank of America is offering to replace the card with its cash rewards card, but then you don't get 2% on everything, although you do on groceries and 3% on petrol although limited for each quarter, you get 1% rebate on everuthing but unfortunately you apparently will have tyo pay the near criminal 3% Bank of America foreign transaction fee. On one of the blogs I frequent, we are still looking for a replacement card and haven't found one yet. The closest I've come up with is an Amex offered by my Fidelity brokerage account which is a credit card with a 2% rebate on everything. But although Amex charges on its cards a 2.7% foreign transaction fee, this card charges 1%. It's a lot to ask for a credit card with all these perks but that doesn't mean we'll stop looking (I just charged to this card with time running out a $5,000 medical bill.....what I do is not have the medical group submit my bills to the insurance company for reimbursment directly and then bill me for the difference; I submit the bill to my insurance company, ask for them to send me the insurance payment and then and only then pay the medical group, a bunch of crooks they are. Easiest $100 I ever made! I will let you know if and when I find a replacement credit card (no annual fee, no fx fees and 2% rebates)...
The main piont being that although many people don't understand it, there is no such thing really s a visa (or mastercard) credit card...there is a citibank visa card, or a Bank of America credit card or a Capital One credit card and they all have different policies so one simply cannot generalize.
Sep 24th, 2011, 04:47 PM
#24
Koryandleslie, if you are still reading, just a tip from our experience. Sometimes you can't get money out of the ATM with your card and you can't figure out why. This has happened to us numerous times, in many countries. Just keep trying. Try a different ATM, a different bank, wait until the next day, try pressing credit instead of savings etc etc. Just because the money doesn't spit out the first time, doesn't mean you won't be able to get any.
Also if you are taking cash, either US dollars or euros, split it up and hide it in various places. Some in your bag, some in your moneybelt, some in your shoe, some in the room safe (if there is one). Much safer than having it all in one spot.
Kay
Also if you are taking cash, either US dollars or euros, split it up and hide it in various places. Some in your bag, some in your moneybelt, some in your shoe, some in the room safe (if there is one). Much safer than having it all in one spot.
Kay
Sep 24th, 2011, 04:58 PM
#25
Sorry, should have added, don't keep trying like 10 times in one machine. Chances are it will keep your card and you'll have to wait until the bank opens and try and get it back, which could be a hassle (particlarly if you are just about to leave the city or country).
Good luck with it all and have a good trip.
Kay
Good luck with it all and have a good trip.
Kay
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