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I'm more confused than ever about ATM card - what is this "conversion" fee banks charge???

I'm more confused than ever about ATM card - what is this "conversion" fee banks charge???

Old Jul 14th, 2006, 08:54 AM
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I'm more confused than ever about ATM card - what is this "conversion" fee banks charge???

Being a good little Fororite, I called my bank to ask what 'foreign transaction fee' would be applied when using my ATM card. I was told $3 plus what ever the local bank charged for using their ATM machine - maybe the equivalent of $1.75 or so (a guess on her part). So far, what I expected.

Next the bank agent told me there would also be a fee to convert the funds from one currency to another: either 50 cents or 2% of the converted US dollar amount, whichever is greater.

I've been trying to read up on all this, and this is all starting to make my head spin (and I haven't even started packing yet!) Is everyone who uses an ATM card getting hit with all these fees? It seems that my Visa's 3% fee will cost me less. What am I missing here?
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Old Jul 14th, 2006, 09:08 AM
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The bank is charging you to access your own personal funds. Do they charge you in the States to access money from your checking account?

They are ripping you off. European ATM's will charge you nothing. Your bank is charging you $3 plus 2%. So if you withdraw the equivalent of $500, it will cost you $13.00.

If you use your VISA to access funds, it is the equivalent of a cash advance, and you start paying interest the day of the withdrawal.

My bank in NJ charges nothing, zilch, nadda, zero fees/funds/conversion fees for ATM withdrawals from a European ATM.

Shop around and find another bank, or suck it up.
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Old Jul 14th, 2006, 09:11 AM
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See if you can join a credit union, after checking with them about fees. Credit unions charge a lot less. I never take my citibank card or Wells Fargoe card for use out of the country
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Old Jul 14th, 2006, 09:31 AM
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Yes, Budman - those were the numbers I got too, and I was pretty shocked to say the least. Not what I want to do if I can avoid it (ie I don't want to suck it up!). What bank do you use?

Are you saying the 3% on the Visa is to start paying back the interest or is there interest on top of the 3%?

Do most of you with no fees use bank or credit union ATM cards?
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Old Jul 14th, 2006, 09:41 AM
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I use my credit union ATM---no fees, no conversion charge.
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Old Jul 14th, 2006, 09:42 AM
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I bank with Commerce Bank which is in NJ, NY, PA, and VA. They are expanding into other areas.

VISA credit card charges 1% conversion fee when you use the VISA to charge purchases. It's your bank that tacks on the additional 2%. That's the 3% you are talking about. If you use your VISA credit card as an ATM card, in addition to the 3% fees you are paying, you start to incur interest on this withdrawal.

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Old Jul 14th, 2006, 09:47 AM
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I use a Schwab Investor Checking debit card to get money from ATMs in Europe. There is no transaction fee and no currency conversion markup.

For purchases, I use a credit card from the same source. Again no markup, and Schwab absorbs the 1% network fee.
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Old Jul 14th, 2006, 09:51 AM
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We use Bank of America and that is exactly what they charge. For every time we took money out of the ATM machine, we would get charged $5 ($3 + the local bank's charge) plus a 2% transaction fee. It is a complete rip off but unfortunately, that's what we had to use to get money out of our checking account. To avoid this fee, we used our credit card in most places and took out little cash on our trip. We have a Capital One Platinum Mastercard which is awesome --- they only charged us what the Mastercard fee is abroad and in Europe, we got a $1.23 (or so) exchange rate on all purchases, with no extra charges from Capital One. I feel like an advertisement but we feel that Capital One Platinum MC is the best option when travelling abroad.
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Old Jul 14th, 2006, 09:51 AM
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I will try to explain..

The two largest shared teller networks, Cirrus and Plus are owned by MasterCard and Visa respectively. When transaction occur in currencies other than that of the cardholder, MasterCard and Visa use an official rate, generally the interbank rate, to convert and then add a 1% conversion fee. This is far better than you can do exchanging cash yourself.

Now cirrus and plus prohibit banks from charging a fee if you have the audacity to use an ATM machine different from your bank's if the card is from a different country from your bank. Thus if you have a US ATM or debit card and withdraw from a bank ATM in the UK, say HSBC, HSBC is not allowed to charge you for the transaction (somehow ATM's in convenience stores get around this rule) anyway, the charge in this case in sterling is converted by cirrus or plus into US dollars (assuming you have a US based ATM card) and they tack on a 1% fee.

Now for years, that was it. But what would a banker be who did not figure out a way to screw his or her customers out of more money. So some near criminal banks such as Bank of America and others now add an additional 2% fee for what they call a foreign transacton conversion fee even though they have nothing to do with the currency conversion and assume no risks in regards to currency fluctuations, they receive the charge already converted to US dollars. This extra 2% or whatever is the foreign conversion fee. In addition, your bank may or may not add a fee of anywhere from 75 to $5 for each transaction. Bank of America, for example, gives you 2 free withdrawals I believe each billing cycle and then allows unlimited withdrawals from a list of banks with which they have agreements (Barclay's in the UK); for other withdrawals, they charge an additional fee.

There are many enlightened banks around which don't try to screw their customers with these obnoxeous fees...my recommendation remains USAA Bank in San Antonio Texas which has a very free checking account I use just for travel..they give 10 or 15, I forget which, free transactions at ATM's anywhere in the world per billing cycle, do not add to the 1% mastercard charge and when the other bank imposes a fee, as noted irrelevent when it comes to European banks, absorbs up to $15 per billing cycle of these near criminal fees.

Hope that makes it clear.
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Old Jul 14th, 2006, 12:22 PM
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Compass Bank (a regional institution) charges 1% for ATM withdrawals in Europe - that's it. They do not charge for ANY atm use, USA or otherwise. If the debit card is used for foreign purchases, then they charge the 1% visa conversion + 1% more.

AAA Visa Platinum (MBNA) is only charging the 1% visa conversion on foreign purchases.

I don't use a credit card for cash/ATM withdrawals. All credit cards charge interest from the transaction date + a cash advance fee; on top of that, add the 1% visa conversion and any add'l % your bank decides to collect.
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Old Jul 14th, 2006, 12:27 PM
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BellCo Credit Union only passes on the 1 percent Visa conversion fee, on both their debit and credit cards.
But I think CapitalOne doesn't charge any conversion fee on its credit cards at all. Don't know if they offer the same for ATM cards. It's worth looking into, because those fees do add up.
 
Old Jul 14th, 2006, 01:06 PM
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I have a CapitalOne ATM card, and they charge for using out-of-network ATM's.
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Old Jul 14th, 2006, 01:23 PM
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My bank said that they charge 1% and that European banks charge an equivalent of about $5 to use an ATM. I liked the convenience. I only used the ATM one time. Credit cards or cashed out AmEx travellers checks the rest of the time.
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Old Jul 14th, 2006, 01:59 PM
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Sugardog: your bank is totally wrong. European banks will not charge you ANYTHING. If you were charged $5, the money went to your own bank.

Akila: Same w/ you. The European bank did not charge you a cent. Those $5 charges were BofA's normal fees - unless you use one of their partner banks.
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Old Jul 14th, 2006, 02:05 PM
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Sugardog, if you used travelers checks, someone made a fortune off of you. If you purchased the travelers checks in Euro, you got a bad exchange rate. If you purchased the travelers checks in $$$, you got a bad exchange rate when you converted them to Euro. Travelers checks are a thing of the past. ATM's are a thing of the present, but you need to find a bank/credit union that doesn't charge all of these excessive fees.
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Old Jul 14th, 2006, 02:05 PM
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Not European banks, but independent ATMs (such as in pubs and grocery stores) in Europe can and do deduct a transaction fee from your net proceeds. Only bank-affiliated ones can be relied upon to not levy a charge.
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Old Jul 14th, 2006, 02:22 PM
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sugardog,

janisj is exactly right. Even the girl at my bank told me that the bank in Mexico would charge an ATM fee. Of course I knew she was wrong as the bank has NEVER charged me an ATM withdrawl fee in Mexico or Europe. (point being, not all tellers know their stuff)

The reason why I even was asking the teller a question about fees is because after a trip to Mexico I wanted to know if I could expect a 2% or 3% conversion fee on my next statement. (My card has NO Visa or M/C logo-it's just a plain ol' ATM card) The teller said "yes", however, when I got my statement, there was no fee added. Apparently, if you have a plain ATM card, there will be no conversion fee. Nice surprise. Most people have the debit card with either M/C or Visa attached. I just don't think that she was hip to the information for those few of us that have a basic ATM card. BTW, This bank is Union Bank of Ca.

XYZ123:

On Fodors I've read a few times about USAA and after reading your post, I decided to look into opening a checking account. I found out that as of June 30, 2006, they will no longer be opening new accounts unless you're in the military or live in a certain Texas County. (I don't remember which one)
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Old Jul 14th, 2006, 02:26 PM
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One of the FEW benefits of using our BOA ATM card is that they do have a Global Alliance with Barclays in the UK, BNP Paribas in France and the Deutsche bank so we do not have any transactions fees. We also use a Capital One credit card to keep the conversion fees to a minimum. Deborah
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Old Jul 14th, 2006, 03:36 PM
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I posted this on another thread today but here it is again:

20 tips for using plastic on vacation

This article from Moneycentral is a comprehensive source of suggestions and warnings:

http://tinyurl.com/pzhp4
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Old Jul 14th, 2006, 04:10 PM
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I have never heard of a change from any European bank for using their ATM.

The $5 mentioned above is what Bank of America charges you for international withdrawls (plus 1% conversion), or at least that's true on my account with them (and yes it does seem like a "rip off").
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