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Money advice from financially adept Fodorites

Old Dec 11th, 2005, 12:30 PM
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Money advice from financially adept Fodorites

I can't believe I'm going to ask this question since it sounds like one a college freshman might ask...I know not to exchange my dollars for Euros here in the U.s., but what makes more sense; exchanging actual dollars at a German bank or using my ATM card in Europe? I say using the machine is still cheaper even with the finance charge because banks and currency exchanges tack on a higher pct. charge. My wife says ATM charges are much higher than they used to be so we should take our USD out here and exchange it over there.

And does it make ANY sense to take out cash with a credit card?
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Old Dec 11th, 2005, 12:32 PM
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Take out cash with a credit card? And pay a highly inflated rate of interest on it from the day you take it out?

Yes, it would be crazy.
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Old Dec 11th, 2005, 12:42 PM
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Hi Z,

Unless your bank is charging you about $5 per withdrawl and adding a 3% "conversion fee" the ATM card is still the best.

If your bank is doing the above, change banks.

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Old Dec 11th, 2005, 12:46 PM
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I usually take a small amount of Euro to get started so I don't have to look for an ATM right away...enough for the first day or so of travel (E200.00). Your bank will be able to advise what service charge you will pay per transaction for ATM withdraws. My experience is that you get the best wholesale rate of exchange by using ATM and the fee is usually very low 2.00 to 3.00 per transaction. Be careful of daily limits if you intend to pay your hotels by cash as some banks will limit the amount you can withdraw. Most credit cards now tack on a few extra points onto the exchange rate so expect to pay more once your bill comes in...for the convenience. If you take a cash advance, you will pay the premium interest rate from the day of withdraw until the credit card balance is paid off. Remember that any payment you make on your credit card will go towards credit card purchases but will not pay off the cash advance..this way you will continue to pay interest on the money you take until your full credit card balance is paid off. At least that is the way most of the Canadian banks work.
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Old Dec 11th, 2005, 12:51 PM
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To save on the ATM fees for using a "foreign" ATM (one that is not owned by your bank), take out the maximum amount available to you at one time. For example, if your bank allows you to withdraw up to $200 per day, take out $200 in 1 transaction, instead of 4 transactions of $50, as that will minimize the "flat fee" that your bank will assess per transaction. If you can get your bank to increase your withdrawal amount do so. When I am away I have my bank increase my withdrawal amount to $500 per day.

Also, use your ATM card for purchases in stores, and if necessary you can withdraw money when making a purchase (no ATM fee assessed) just like you can in the US.

Lastly, check with your bank and find out what the flat fee is per transaction.
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Old Dec 11th, 2005, 01:00 PM
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Zeus--You ask a question which my husband and I finally solved for ourselves only this October. We've always taken dollars on trips and exchanged for Euros as needed, which meant risk of theft by pickpockets as well as time spent in exchange kiosks or banks.

This fall we used an ATM card to get Euros while in Germany, and it's the way we'll go from now on! The total cost to us via ATM use was 1% plus the exact exchange rate--money exchangers charge a percentage fee for their service, plus they often give a disadvantageous exchange rate, in effect charging another fee. So we were pleased with the rate we got.

And though my husband brought dollars as a backup, we won't do that in future, thus exposing less cash to potential theft. Plus, some ATMs were accessible after regular banking hours.

What we did do in advance was set up a new ATM/checking account, with funds dedicated solely to travel (thus shielding our "real" checking account from fraud, card theft, etc.). And I got an assurance from the fellow at the bank that we would be reimbursed in case any "extra" charges got tacked on with use of our ATM card, though as it turned out none appeared.

I wholeheartedly recommend use of an ATM card for currency exchange!

We went to Munich in October; where are you planning to go? Wherever it is, I hope you have a great trip!
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Old Dec 11th, 2005, 01:06 PM
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I haven't exchanged money on my last two European trips - always used my credit union's ATM (debit) card to withdrawl local currency at an ATM (my CU never charges a fee to use someone else's ATM). It's been accepted everywhere except for one ATM, so I used the one across the street. On my last trip I noticed a 1% conversion fee on every transaction at a European ATM. I don't know if this could have been avoided using certain ATM machines or not. Supposedly Bank of America has agreements to allow their customers to withdrawl money for no fee at all at certain international ATM machines. Just do some research before your trip - call your bank and CC companies.

If your bank offers no free or cheap solution, dump the bank and join a credit union. At least you'd get the 1% fee I got, only 40 cents for a $40 withdrawl.

I also used my credit union Visa card on my last trip - same 1% conversion fee. (many other companies charge 2% or even 3% so check with your bank/cc company). I think it was accepted everywhere.

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Old Dec 11th, 2005, 03:11 PM
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Yes another vote for ATM and credit cards in terms of the cheapest option. When using your credit card be aware of the dynamic conversion scam. There is a lot in this forum about it. Just type in dynamic conversion in the search box.

Happy travels.
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Old Dec 11th, 2005, 04:02 PM
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This question comes up a lot and every smart traveler agrees that the ATM is best. As mentioned before, there is only a 1% markup on the exchange, and it won't get any cheaper than that. Take US$ only as a back-up in case something strange happens where your ATM card won't work. The odds of that are extremely slim, but having the extra cash will give you peace of mind if nothing else.
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Old Dec 11th, 2005, 04:10 PM
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My credit union charged me $1.00 per withdrawalat ATM machinesin Italy and France.
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