vall_55

Does anyone know the conversion rate (% over the interbank rate) imposed by ATM network providers when using your ATM debit card in another country? I’ve read a lot of threads on here & it looks like it might be 1%, but I’m not sure.

We’re from the US & have generally used credit cards as our primary source of payment when we travel. My local bank (Washington Mutual) charges a $3 transaction fee when using their ATM card outside the US. Their customer service rep said that they do not surcharge the conversion rate & that the exchange rate is the same for ATM cards or ATM debit cards with the Visa logo. She also said that the conversion rate is whatever the ATM network (in this case, Plus) charges. The only way she thought I could know their conversion rate is by comparing the interbank rate (hardly handy when you’re traveling) for that day with the amount I receive when I withdraw money.

I checked with my American Express card provider & they impose a 2% currency conversion rate. Our Visa card imposes 3%. I’m trying to determine if we should primarily use credit cards or cash from an ATM as our primary source of payment on an upcoming trip.

Budman

The ATM's in Europe do not charge any fees. As far as the conversion fee, VISA & Mastercard charge 1% for purchases. You would have to check with your local bank to find out what conversion fee they would charge you if you use your ATM card. You could be charged a conversion fee plus a transaction fee, but each bank is different -- you would have to check with your particular bank and ask that question.

kayd

My experience has always been that the bank charges about 1%. With a $3 transaction fee and 1% conversion, getting $300 from an atm costs the same as using a credit card with a 2% cost. If you withdraw larger amounts, the atm has a slight advantage. Use either or both, based on convenience, because the cost difference probably isn't much.

Budman

Ya know, if you lived in New Jersey and banked with Commerce, and you used your ATM card anywhere in Europe, you would be charged 0% transaction fees, and 0% conversion fees.

Makes one want to rethink using the credit card. Only option to using the credit card would be to defer payment until the statement arrived.

suze

Also the exchange rate varies daily. Say I withdraw 300 CHF or euro on 3 different days of my trip. The bank statement will show slightly different amounts of USD deducted from my account on each transaction.

Christina

I think you may be worrying about minor differences too much. Now I thought what they told you is accurate, though, not what Budman says (that it is the standard network conversion rate, Plus or Cirrus, and the same for anyone using that network). Budman may be referring to whether a bank charges a fee on top of the Cirrus/Plus conversion rate, but I did think it was standard. I could be wrong, don't know, but I have a card that uses Plus and I have compared and know it is within one percent of the interbank rate for that day.

I think you are confusing your charges on your statement with what you get out of the machine. You will get out local currency of the amount you ask for, so you cannot tell from that what the exchange rate is, even if you did know that day's rate. YOu won't know what they charged your bank account with just from knowing what you received. There's nothing you can do about this conversion rate at the ATMs, as long as you know the extra fees your own bank charges (which you do), that's the best you can do. I don't think it is worthwhile to try to figure out the minute difference in that versus your Amex credit card to decide how to pay for the majority of things. First, you can't use Amex in a lot of places, and you are going to need cash for walking around and small items, anyway.

Budman

That's the first I've heard that Cirrus/Plus charges some sort of network conversion rate. I don't think that is correct. My past ATM withdrawals seem to be pretty much in line with the interbank exchange rate for that day.

Now, this is a new topic -- Cirrus/Plus conversion fees vis-a-vis VISA/Mastercharge conversion fees vis-a-vis additional bank charges/conversion fees???

jsmith

There must be a contest to see how many ways the same question can be asked and answered.

From the Visa website:

"Effective April 1, Visa will assess a 1% International Service Assessment (ISA). The ISA is not a currency conversion fee but rather a charge to issuing banks when transactions use the global payment system."

MC does the same.

nytraveler

Agree that you may be overthinking this.

But finding the interbank conversion rate is easy - it;s published every day in the newspaper (besides being available online). And if the local paper is the wrong language there's always the Herald Tribune.

Budman

Not quite. I understand the differences between the Visa/Mastercard fee/conversion fee, the bank charges/fees, etc, but this new wrinkle concerning Cirrus/Plus Network conversion fee is a new one to me.

If I'm reading Christina's post correctly, if my bank does not charge a transaction/conversion fee, and the ATM bank in Europe doesn't charge any fee to use, now, Cirrus/Plus will charge a fee? Anybody else heard this before?

StuDudley

I've never encountered any disclosure statement that mentions a fee charged by the Plus network - any my wife works for Visa (but not in that section the business) and she has not heard of that.

The Visa explanation of what charges various people impose, does not talk about a network charge - only Visa and the card issuer (Washingtom Mutual in this case). If Washingtom Mutual says that they do not impose the normal 2% on top of Visa's fee, then all you will pay is the 1% Visa fee (plus the $3 Wash. Mutual transaction fee).

You can get a better "picture" if you access Visa's web site.

http://www.corporate.visa.com/pd/consumer_ex_rates.jsp

Click on "questions" to get an explanation of additional fees, and how Visa determines the exchange rate they will use for your withdrawls.

I think we've beaten this currency conversion issue to death recently.

I believe the bottom line is to use a card issued by a bank or other type of issuer that does not impose the 2% additional fee on top of the Visa/MC fee. The card I use is a Morgan Stanley debit card. I do not use my BofA debit/ATM (check) card because they impose the 2% fee. My secondary cards if I loose the Morgan Stanley card are the BofA debit/ATM for cash withdrawls, and my Frequent Flyer card for all other transactions.

My Morgan Stanley debit card provides the same protection against fraud as my other charge cards - even if "cash" is stolen.

Stu Dudley

Patty

I agree with those who say you're overly concerned about minute differences. I use my credit/ATM cards abroad the same way I used them at home - Amex card for big expenses (or Visa where Amex isn't accepted) and cash from an ATM for smaller, daily expenses as that's what I find most convenient. An extra 1% conversion on each $1000 is only $10.

sandi

Commerce Bank is also in NYC and doesn't charge conversion fees or fees for withdrawals from ATMs anywhere. And, if in Europe where banks are not permitted to charge a fee for ATM withdrawals... then I'm home free with Commerce.

On to credit cards or ATM cards from other financial institutions used over the years. The difference between charges using credit cards (purchases, meals, gas) and ATM withdrawals (everyday spending) is so small - in fractions of a penny in the total USD amount.

If your home country financial institution charges a fee for foreign ATM withdrawals, just don't be taking out money daily. On a 2-week trip, I may have used the ATM 4-times (but then my financial institution doesn't charge a fee). In the scheme of things - unless you are a true budget traveller, an addtional $10-$30 in fees/exchange rates, is paltry against the cost of your entire trip.

Most of us have probably tossed out this amount when emptying our pockets at the end of the day - thinking the colorful currency was candy wrappers. If one cannot afford $10/$30 maybe you should stay close to home.

I believe this subject has been beaten to death.

Christina

Budman, I don't know the exact terms for these things and this isn't a particular hobby of mine, but I was just referring to a charge that is built into the conversion rate for using the network, some kind of minor overhead or cost for those using Cirrus or Plus--banks must pay Cirrus or Plus something for utilizing their network, don't you think? If not, I'd think all banks would have all networks listed on their cards, and they don't. It's a for-profit company providing that network, after all, and a business. Basically, what jsmith was quoting right after my post is what I was thinking of.

I don't see why there would be a disclosure statement about this, as Stu wants, as there isn't a disclosure statement for every expense item that my bank runs up and how that affects their fees and exchange rates. Any cost for running the network would be built into the exchange rate they are using, as an overhead cost.

This isn't some major foreign fee conversion transaction charge, it's just the small difference between the actual interbank rate and what your money gets changed at (assuming no other markups). It's not going to be that visible nor called an extra fee.

I just think the people running the networks Cirrhus or Plus must have some administrative cost added on just for the network or they couldn't run it as it surely costs money to keep it operational. I don't know for a fact this exists, I just thought I remembered reading about it and it seems logical to me, as I don't expect things to run for free. But, this isn't a major amt. of money and there's nothing you can do about it if it exists or not.

StuDudley

My guess is that the network makes it's money in a way similar to how Visa makes it's money - by charging the merchants' banks & the card issuers' banks that use the network.

For Visa, most of their profit comes from a transaction fee they charge both the customer's bank and the merchant's bank. For "cross currency" transactions, Visa adds an additional 1% fee to the fees that they already charge the banks & issuers.

On the customer's bank/issuer side, credit cards are a big money maker for the bank/issuer, since they charge you & me an obsurd interest rate if you don't pay on time. Therefore the cost of "charging" is built into the interest rate.

On the merchant bank's side, the merchant's bank charges the merchant a fee (a percent) for each transaction. Therefore the cost of "charging" is built into the price of the merchant's product. I have a wine merchant that offers a discount if I pay with a check or cash.

Anyway you look at it, we as consumers are getting a pretty good deal compared to the way we exchanged money 20 years ago - travelers checks, waiting in lines at the bank, getting ridiculous exchange rates from those money exchange places open 24/7, using US dollar travelers checks for paying European hotels, etc.

I purchased & "charged" (actually debited) French train tickets Tuesday. My Morgan Stanley on-line statement showed a 1.2971 exchange rate was used for the transaction. The exchange rate in today's financial section of the paper said the current rate is 1.2947 - that's only a .19 percent difference - a pretty good deal, IMO.

Stu Dudley

pngmartino

I spent a month in Spain last winter and found out belately that Chase Bank charged a 3% conversion fee in addition to $1.50 per transaction and an unknown fee from the ATM bank I used. I knew that my Visa card charged a 3% conversion fee so I was using my ATM to avoid that. Recently I found that Capital One does not charge the 3% on credit card charges, so I applied and received a Capitol One card for an upcoming trip to Sicily. I too am looking for a bank that has an ATM card that does not charge the 3% conversion fee.

Budman

Where do you live? Commerce Bank in NY/NJ/PA/VA, and some other East Coast states does not charge any ATM/Conversion fees when using European ATM's. http://bank.commerceonline.com/infor...ours/index.cfm

Does Capital One charge the 1% VISA/Mastercard conversion fee or do they eat it?