Ok, my head is spinning from reading the previous posts on credit card fees.
And I've just spent over 2 hours on the phone with various banks(in Canada).
No way in the world can I get a truly specific answer from them regarding fees or conversion charges or whatever they want to call them. I always travel with credit cards, assuming this was the best bet, but now am surprised at the 'fees' of 3% or more.
I finally found a bank that will not charge ATM fees with associated banks overseas and in the US., so cash seems to be the way to go.
BUT, here is my question.
Although it seems cheaper to use cash via ATM, is it worth it to give up my FF miles that I would have earned using my VIsa? I can't seem to do the math on this one.

Hi kodi,

You have to tell us how many FF miles you earn per dollar spent, and how many dollars you pay in fees per dollar spent.

In general, it is always best to use a credit card over cash as you have much more leeway in case something goes wrong.

I don't know Canadian bank policies. In general, if you use either Cirrus or Plus, they are not supposed to charge fees for using another bank's ATM in another country. Therefore, in theory, Canadians should not be charged fees by American banks if they use ATM's in the US. However, some Canadians report they are charged these fees by the banks whose ATM machines they use. The only thing I can think of that allows them to do this is the transactions are not sent to Cirrus or Plus but rather to local networks such as NYCE or STAR which do not have these prohibition.

Having said that, I still believe yhou are better off using credit cards. The exchange should be the same as with Cirrus or Plus transactions as they are owned respectively by MC or Visa. So you have the convenience of the float.

Well, since I rely on using FF miles to do my free Business class trips every year to Europe, I wouldn't like giving up the miles. I just get 1 mile to the dollar, which basically means that a 3% credit card is costing me 3 cents a mile. But since I get a ticket worth over $7000 for 90,000 miles, that means I'm getting 8 cents worth for each mile. I keep the miles.

Incidentally, although my BofA ATM card charges nothing for related transactions, when I compare ATM receipts to my Citibank receipts, I'll be damned if I can ever find 3% difference, regardless of when they were turned in or anything else. In fact, there are times that Citibank deposits of the same exact day as an ATM withdrawal have yielded a slightly lower rate on the credit card. Go figure. This has been discussed ad nauseum here, but it is true.

oopps!! sorry. I have Air Canada Aeroplan which I believe is fairly standard. I earn 1 airmile for every dollar spent. The rewards are similar to most FF programs. 25,000 for a domestic flight , etc.
As for fees, I'm at a total loss. The bank says it's 2.5% over and above my purchases, but I think it's more and I can't make sense out of it.
On my Visa card they charged a rate of .73 on a US purchase to CND$ ( any fees hidden in this exchange rate)
and on my AMex they charged .75, a better rate, but still not the going rate.

XYZ, I do use Cirrus or Plus, and am not charged a fee from the machine I'm using, but am charged a fee by my home bank when I use an ATM outside Canada. My own bank charges me a $5 fee for each transaction outside Canada. But I did manage to find a bank yesterday that does have an alliance with other banks, so I opened an account and will not be charged.
Patrick, I don't rack up the miles you do, and so probably would not book a Business class fight...but I still am not sure I want to give up my FF miles.
As far as the 'fees' ( hidden or not) , I never used to notice too much, but just purchased a trip in US$ and was really shocked when I saw what Visa charged me in CND$.

Hi Kodi,

Your bank is charging you 2.5% on the exchange on top of the 1% that MC or Visa charge.

If we take Patrick's $7000 ticket (full fare) for 90,000 miles, a FF mile is worth $0.08. Your bank is charging you $0.035 to earn $0.08.

Of course we very rarely pay full fare, so the use of the CC to earn FF miles is pretty near a wash.

hi kodi,

First, I 100% recommend the atm cash advances as long as you have a bank that charges little or no fees for using international atms. this is the cheapest way to go and the least markup on exchanges for money for all purchases and spending money, food money. I also recommend using the atm/debit visa for your large purchases and hotel bill as long as you only have to pay the 1% visa clearinghouse fee (your bank does not markup those purchases or exchanges with an added fee like a credit card). Because of the hotel bill, you won't be able to use your cash advances from an atm exclusively, so the atm/debit visa is a good solution to that problem. (remember $300-400 a day limit on atm withdrawals and that is not a 1 for 1 if you are talking about pds. that only gets you about 160-220 pds a day.

there are other things to consider before you plan on doing this exlusively and how not to lose ff miles is one of them.

Four questions for you to think about:

1) if you are used to using your credit cards is it because of convienence or because you plan on paying it off at a later time? or just to get the ff miles. or do you pay it off right away after you get home?

2)does your credit card charge a big difference in interest in cash advances versus purchases?

3) do you get FF miles on purchases only or also on cash advances?

4) How do you plan on paying you hotel bill (usually the largest payout on a trip) out of your cash? or still plan on paying via credit card?

5)can you get an atm/debit visa instead of just an atm card and if so does your bank treat these debit visa payouts like your atm withdrawals (no extra fees or just the 1% visa clearinghouse fee)?

The first three questions have to deal with how you plan on financing your trip. If you use credit cards because you are paying for it later, you may still be able to finance the trip and still get FF miles if you do a <b>cash advance on your credit card at home prior to leaving</b> (no exchange fees) and deposit the money in your atm checking account. But this is contingent on whether or not you get FF MILES for cash advances on those credit cards. Also you may not actually save much if you are paying later. Some credit cards charge a much larger interest rate for cash advances. This would nix any fees saving benefits because the interest is so high. So if you are financing the trip via credit card and wish to pay later over time, the cash advance may not save you. it would probably be better to still make all purchases via the credit card and just absorb the fees or find a credit card with lower fees.

Kodi, my friend was like you and wanted those FF miles. We were charged a horrendous rate later when she paid for her hotel bill via the credit card. to the tune of about 4% over the high exchange for the day. that was 10 cents more per pd. that's not really a lot, but it adds up if you use the card exclusively for all purchases also like she did. after it was all said and done, between her purchases and the hotel bill, she ended up paying about $200 more for the trip because of those fees.

I researched it when we got home and on her card, she would get FF miles on cash advances and her checking atm/debit visa does not charge her for atm fees or conversion. she paid the visa bill within 30-60 days so any interest differences on purchases versus cash advances would not be an issue. in her case it would have paid for her to do a cash advance in the states and deposit that money in her checking and withdraw via atm each day.

the hotel bill, however, was the bill that would pose a problem. I gave her my money on the bill prior to leaving the states and she paid both our bills on the credit card. there would have been no way she could have gotten enough cash advances over a 3 or 4 day period to pay that bill in full. it would have had to be credit card.

But her atm card was a atm/debit visa also. Since it pulled from her checking account, she could have paid the bill with it. Purchases on her atm/debit visa do not go toward the daily atm limit. and since it only acts like a visa but pulls from her checking like the atm, she would only have had the visa clearinghouse 1% charge. her bank would not have tacked on a 2-3% on any purchases or hotel bill payment like a credit card would have.

In her case, since she got ff miles on cash advances, she would have been better off getting a large cash advance prior to leaving the states to get those ff miles and then just putting the money in her checking and using that atm/debit visa for the trip. to avoid even the 1% clearinghouse chg, pay only the hotel bill with the debit visa and use the atms for all other money.

my suggestion:

if your credit card does not charge a high interest on cash advances and/or you plan on paying it off as soon as your return, and you get ff miles on cash advances...do a cash advance on your credit card prior to leaving the states and put it in your checking account. use the atm/debit visa for you atm withdrawals and the same for hotel bills and purchases if and only if your bank charges no more than the 1% clearing house fee on those purchases.

if they do charge more on that debit visa, do all spending money and food bill money thru atm and only pay for the hotel bill via credit card or debit visa.

If your card charges a large interest rate on cash advances and you do not plan on paying it off quickly...nix the above and just use your credit card, any savings on fees would be eaten away by high interest.

hope this helps. i hope your heads not spinning too much (grin!).

ps I used to wonder how my friend got so many ff miles. she uses her visa for everything, groceries to pay all bills online etc...everything. she pays the bill the minute it comes in effectively not having to pay any interest at all. she gets a mile for every $ spent. do the numbers. basically her and her hubby's income each month gets spent on that card and then immediately paid. she got her airfare to london almost free and still has enough miles to get another one.

By doing this she gets at least one trip a year for her and hubby free on airfare. so I know why FF miles are now important.

THe value of FF points CAN be overrated. Yes, we also flew business class to Eurupe this summer. The 'list price' on the ticket may have been $7,000. BUT had I been paying cash money I can assure you that I would have purhased a $550. ecomomy ticket. Something is only worth what you are willing to pay for it. It may be incorrect to assume that your points are worth 8 cents. The value will vary by person, location, and plan. By way of example, we sometimes fly between Calgary and Vancouver at a $32 fare rate on Westjet
or Zip. The FF point cost is 15,000. Does this mean the value to me is only 2/10th of a cent? Of course not.

wow, thanks everyone for the replies and food for thought. Erinb, thanks for taking so much time. First of all, I'm not really sure what you mean by ATM/Visa debit card. It by that you mean to take cash advances from Visa, I never take cash advances. First of all, the interest starts immediately and second, I don't get airmiles on cash advances. So they are not ever a good option for me.
I have my bank debit card at home to use in the grocery store etc. But it has nothing to do with Visa, and is only to pay for purchases from my chequing account.
So it boils down to Visa and earn the airmiles or cash withdrawls from ATM with no charges.
On my next trip to London, my hotel is already paid as part of a package ( and I've already been zapped with 'fees') so for this trip , at least, it will only be my food and entertainment etc.
I'll have to give it serious thought the next time I go away and have to pay hotels.
Allan, I understand what you are saying. Thinking about it, I would never spend $7,000 on airfare , so if I use a realistic figure for me, which would be more like $1200. tops for a flight overseas or within NOrth America, then my FF miles 'cost' me much less. I try to maximize my FF miles when using them. For instance , from Toronto, I can get many overseas fares for about the same as many fares within North America. So I would not use 50,000 FF miles to go overseas , when I could get two trips in NOrth America for the same amount of Miles.
Assuming I'd never spend more than $1200 then my domestic miles are worth close to .05 and my overseas would only be worth .025 cents.
Whew... thanks to all for helping me worth through this.
Sounds like for domestic trips, it could still be worth it to use my visa and collect Ff miles.

We used our MBNA Visa credit card for purchases in Germany last year. The only fee we had was the 1% Visa fee--the exchange rate we got on the posting date was always within the interbank range for that day, so evidently there was no extra 2.5% or any other fee or exchange rate adjustment either. It must vary from bank to bank.

kodi, the ATM/Visa debit card might be like the Visa Check Card that I use. When I get cash advances, the money comes directly out of my checking account. There is no fee by my credit union and no charge by Visa. A credit line/overdraft protection is also available. I can also use the card like a Visa card and get 1% cash back on purchases.

Thanks for the added information.
I'm really not at familiar with visa debit cards or visa check cards. Either they aren't common in Canada or I'm living a sheltered life after all!!
But they sound like a good idea, so I'll check with my bank.

I guess I look at things differently in regards to that &quot;true worth&quot; of the FF miles. No, if I hadn't had the miles I wouldn't have bought a $7000 business class ticket, but that doesn't mean it still isn't worth that. If you won a million dollar house in a contest for free would you say it was really only worth $100,000 because that's all you would have bought a house for? Or if you buy a article of clothing worth $100 and get it at half price would you say it's really only worth $50, because otherwise you never would have bought it at full value.
Maybe I wouldn't have bought that ticket for the full amount, but flying first class from Ft. Lauderdale to New York where I stay for a few weeks, then flying business class to London for a couple weeks, then flying business class to Berlin where I start my real journey, then flying home business class from Paris to Miami is still worth $7000 anyway you slice it, whether I would have been able to afford it on my own or not.

Another example: if you had a prize where you could pick out any car you wanted for free and you chose the little hatchback instead of the Bentley, I think you'd be wrong to say that the prize was only worth $11,000 because you decided to choose that car instead of the $175,000 car.

Just try selling that piece of clothing for $100. or try selling that $11,000. hatchback for $175,000. You will quickly get an insight into 'real' value.

Stomping all over the issue is fun. We keep kicking it around, and it keeps coming up.

The traditional instruments of cash, credit cards, traveler's checks, and ATM /debit cards is multifaceted and subject to all kinds of anecdotes.

Let me see if I can summarize the issues for my own clarification, and thus invite comments. The objective is to find the best way to have purchasing power outside of the USA that provides safety, liquidity, and the most favorable rate of exchange. The benchmark for the rate of exchange is the bank wholesale exchange rate.

Traveler's checks. The main argument for them seems to be loss protection, portability and convertability. If you lose them for any reason, the issuing company will replace them. Most banks in most nations will convert them to local currency. (&quot;banks&quot; being a general term here.) They are easy enough to carry.

The arguments against them include these conditions:
1. Illiquidity. They are not accepted as legal tender money in many places; before use they must be converted. If bought in foreign currency denominations, they are illiquid in the USA. Any unused foreign currency checks can only be converted back to US dollars for a fee.

2. Conversion costs. Because of illiquidity, the requirement to convert checks often involves an extra charge in some form, either a fee or a less favorable exchange rate.

3. Acquisition costs. There is a cost to acquire the checks as well, although many places sell them for no added cost UNLESS they are denominated in a foreign currency. In those cases, there is a cost relative to the bank wholesale rate of exchange.

Credit cards.

The arguments for them are these:
1. Portability. The cards are easy to acquire for most traveling people and easy to carry.
2. Safety. Most banks limit individual liability in case of loss.
3. Favorable exchange rates. Transactions are usually posted at the daily wholesale bank rate of exchange, plus a service fee, usually 1% for Visa and MC
4. Acceptability. Many business places accept them without question. In fact, a credit card is vitually mandatory for car rentals.

On the downside, these problems emerge:
1. Added fees levied by some issuers.
Some banks add 2% to each transaction for essentially no service provided.
2. Difficulties when the card is lost, stolen, or the credit limit has been exceeded. Losing a card overseas can be a hassle.
3. High charges when used for cash advances. People who use the card for cash pay the normal cash advance fee. This usage, however, is not necessarily tied to overseas usage.

ATM-Debit cards.
The advantages include:
1. Wide acceptability and ease of use in most places.
2. Favorable exchange rates.
3. Portability.
4. Some degree of safety because of pin numbers and limited liability.

The disadvantages include:
1. Loss of the card.
2. Failure of the card or the bank machine.
3. Limits on the amount that can be withdrawn at any one time.

Cash

Disadvantages include:
1. Not widely accepted in a foreign country, depending on where you are. In some cases the American dollar is accepted at airports, in the dining car on trains, at international retail sales outlets. (The Amsterdam airport merchants accept any major foreign currency. I have seen sales transacted with a combination of several currencies for one purchase. Why not? There is a profit in the exchange of money as well as the sale of the goods and/or services.)
2. No protection if lost.
3. High conversion fees.

Advantages include.
1. Readily converted at foreign banks.
2. No problem of use when returning home.

My own strategy for Western Europe has been to use my credit card for major purchases to reduce the amount of currency I need to have at any one time.
I take along my ATM card and depend on it for daily currency needs. I also have a few traveler's checks as a last line of defense, just in case type of situation. I do not carry large amounts of US dollars because I have yet to see an advantage in having them outside of the country.

The best way to get euros is to find someone who has some to sell and is willing to accept the bank wholesale rate. Both parties to a private exchange usually benefit because the middle man is removed from the scene.
Hard to find!

I think you'll always do better getting local cash, out of a local ATM, and using a card that brings the funds directly out of your checking or savings account and NOT a &quot;cash advance&quot; on the credit card account itself.
I disagree with the statement above re &quot;losing a credit card....[being a hassle.&quot; It depend son the card. Two years ago I lost a Visa card in Paris; I was immediately on the phone to their office (via toll-free number) in Germany and spoke with an agent whose English was perfect. I was leaving by overnight train for Madrid that night. When I arrived at my Madrid hotel the next morning my new card was there, via an express service, and waiting.
Those conversion fees are just another way for your issuing bank to make some money and they've already charged the merchant anywhere from 3-5% for every transaction. Finding a card-issuing bank that doesn't do so may be difficult...but using a CC gives you a lot of protection.

And as to the &quot;value&quot; of all these FF miles wev'e racked up...well, nobody here that I can see has yet to factor in the COST of each one of those miles when they were earned by flying. Patrick's example is interesting..he gets a $7000 ticket for 90,000 FF miles...uh, and just how much did he actually PAY for that ticket if he had to spend one dollar for each of those 90,000 miles?????

How much did I actually pay? Well, if we assumed that the entire 90,000 miles was earned via dollar spending in Europe with fees totalling 3% on my purchases, then I guess it would have cost me $2700, or if we assume any credit card would have still charged 1%, then I guess all those miles would have cost $1800. But in fact, a very small portion of those miles was earned by overseas spending, maybe 10,000 at the most, costing me either $300 or $200, depending on how you look at it. So I could have had a credit card that didn't charge that extra 2% and I would have saved that extra $ 200. But if I had done that, I'd still be sitting here in Florida next year instead of traveling to Europe, or would have just had the miles to do a coach ticket, or an upgrade, but that flight purchased in coach for the upgrade would have still cost well over $1000 (I stay over 60 days, do open jaw, and include two stopovers). So anyway I look at it I'm happy.

Patrick, I do understand comletely what you are saying. I've read many of your posts and I think it's wonderful that you are in a position to take such fantastic trips. If only.....
but I'm no where near being able to do the same. Although I'd love to drive a Bentley, I don't want to do with out a car for many years in order to do so. So I will settle for the hatchback year after year ( ok, maybe a midsize!).
It takes me years to build up airmiles, so it simply doesn't make sense to use 90,000 for one trip, no matter how much it's worth. FOr 100,000 I can have 4 great trips anywhere in NOrth America. Because I love to travel, I do what I can to get in as many trips as possible. And if I can get a $600 flight to London, then I wouldn't use any of my precious air miles for such a trip. But I'd use them for Alaska or some other expensive domestic trip.
BUt, I'd sure love to be in your shoes....good for you to be able to do it.
Bob... thank you...
the one thing you didn't factor into all this on this thread is the FF miles. I guess that's what my real question was.
JonJon, thanks to you too.
I personally don't earn any FF miles by flying... only by using my Visa card , and so it does take me a long time for them to build. Perhaps I should not worry about the bank charges...and just use my card.. in a way it's a form of 'saving' for my flights. It seems one way or another I'm paying.

Patrick

When you refer to open-jaw what exactly does that mean? I'm questioning it cause we'd like to take another trip and also be gone for about 60 days.

As to the Cash and credit card business - I contacted some banks and still update banks as to who gives the best rates on overseas conversions. So far I've found that Bank of America has about the best rates (in my checks and balances) - I've not paid to use my ATM card overseas and the conversion when I buy a credit card purchase ooverseas has been good.