paying w/euros or cc

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May 18th, 2007, 05:13 AM
  #1
esd
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paying w/euros or cc

Please refresh my memory! It seems I read here that it is better to pay your hotel bill with cash (euros) than it is with a cc because the cc company will not give you a good exchange rate and may even add a fee. Is this correct? And, if so, I may have to get euros before I leave home and what is the best way to do that. I will use my atm card over there for spending money but I may not be able to get that AND enough to pay a 3 night hotel bill my 4th day there.

Thanks so much for any help and advice you can offer!!!
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May 18th, 2007, 05:17 AM
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I boarded the plane to Europe with only $4 USD in my pocket and no euros. I went to the ATM in Rome at the airport and got Euros. I was happy with the exchange rate. However, whenever I purchase something for more than 30 Euros, I always use a credit card.
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May 18th, 2007, 05:43 AM
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esd...

It is the exact opposite...you get a much better rate for using a credit card even if you're using one of those near criminal banks that add a surcharge for foreign currency conversion when they don't do any foreign currency conversion.

In most of Europe, exchanging one currency for another is converted using something called the interbank rate with an additional charge of at least 10% if not more added on; then some exchange places add on a fixed charge per transaction. ugh

Using a credit card, mastercard or visa convert the currency using the same interbank rate but adding on a fee of only 1% which is justifiable to protect them against foreign currency fluctuations. The charge is then sent to your home bank and at this point, never wanting to miss an opportunity to gouge their customers, many banks now add on an additional 2% fee for doing nothing; the currench has already been converted. This makes a total of 3% above the interbank rate much better than changing cash.

Why would you want to exchange cash at a rate of 10% over the interbank rate and not use a credit card where with some planning you can find a credit card which doesn't even pass along the 1% mastercard/visa charge.

The best way to travel is to use credit cards everywhere they are taken supplementing with withdrawals from ATM's to cover those few (and they are becoming fewer and fewer in much of the civilized world) that don't accept credit cards.

Without going into it again, do a search on dynamic currency conversion to see what you have to watch out for and why some people think it's better to pay cash rather than use a credit card but dcc can always be avoided.
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May 18th, 2007, 06:20 AM
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xyz123- you are great at explaining the issue clearly. Thanks.
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May 18th, 2007, 06:35 AM
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And I get miles with British Airways on my credit card!
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May 18th, 2007, 06:48 AM
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Until my recent trip i always benefitted from using my ATM card rather than charge card. But at least in this case it has changed:

my ATM now charges 3% plus a $3 ATM fee (local bank charge - none for ATM in Europe)

whereas my CC charges a flat 3%

so cards, which, except for Capital One which seems to charge 0%, are better in my case than ATMs

these charges seem universal. Both CC and ATM exchange rates in my case were similar though they can vary so it's really hard to tell unless you call your ATM bank and CC and pointedly ask the charges.

either of course is better than Traveler Cheques or changing cash.
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May 18th, 2007, 06:48 AM
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But the big issue that everyone missed is that we have always received a significant discount 3 to 5% when paying hotel bills in cash. Given that most credit cards are adding 3%, this is a good savings. And with cash you can often deal a little bit on most other items except food. We have never had a problem with taking 500E at a time with the debit card. We carry two debit cards tied to two different accounts so we can hit both if we need to but never have. We always carry a hundred euro or so going into the country so we are not dependent on the first ATM.
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May 18th, 2007, 07:40 AM
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Careful! Differentiate credit cards and debit/check cards. Credit card operators charge both the user and seller a fee. They pay the seller immediately and then wait for the buyer to pay them. The interest free period for the buyer is up to 30 days! Hence the conversion cost and the service fee. Late payments are charged interest rates of 40% (my Visa card).
Debit/Check cards directly access your funds. There is no credit risk, hence the low service fee.
The ATM use charge is another matter. Patrons are charged a fixed fee for each use.
Visit your bank, learn their policies. Inquire of your credit card company their policies and fees.
Check expiration dates before you travel. Arrange daily limits on cards.
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May 18th, 2007, 10:19 AM
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......The ATM use charge is another matter. Patrons are charged a fixed fee for each use. .....

That is not entirely correct. It is strictly your bank's policy. Some banks charge a fixed fee and maybe a percentage, some a percentage only (my bank - US Bank), and some a combination and it has been reported that some, primarily credit unions, don't charge any fees other than the network fee,
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May 18th, 2007, 10:41 AM
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There are very few absolutes about this money/CC/ATM issue, so it's almost never true to say something is the case always.

As for the ATMs, my bank does not charge either a flat fee nor percentage, and it's not a credit union. It's a smaller regional bank, however. I have no ATM charges for using any ATM anywhere in the world, including in the US for ATMs other than my own bank (which is very common, and the basis for the flat fee charge in other countries). My bank even refunds any ATM fee that may be charged by those private ATMs in some resort areas or something like that. It's just marketing and customer service decisions.
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May 18th, 2007, 10:48 AM
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I get a bunch of euros at a bank here and if I have extra, save them for the next trip. They also make welcome holiday, birthday, or anniversary gifts to people who are planning a trip. By the way, in France, if you pay for a meal by CC and want to leave a small tip (not obligatory, but nice), you cannot write it in, when you sign, as we do in the US -- so that's another thing you may want euros for.
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