We're trying to decide whether or not to use a Visa (or American Express Gold) card in Europe for purchases. I've been told that if one uses this card, one gets the best conversion rate at the time of purchase. However my Visa provider (First Bank) now tells me that there will be an additional 2% charge, in addition to the 1% that Visa corp. charges, to all purchases in foreign countries. <BR> <BR>If that's the case, does it still make sense to use the credit card when traveling? Do banks and other exchange houses charge more than the 3% fee? What's the best way to make purchases; cash or credit card? <BR> <BR>And what about my debit card? I've heard that they don't work very reliably outside your home country. <BR> <BR>Thanks in advance. <BR>Jeff

Jeff, first, VISA is more widely accepted than American Express in most places with the exception of Italy where American Express is also widely accepted. <BR> <BR>Credit cards traditionally get the best exchange rate beause they are based on large amounts (millions) rather than your indivdual charges. <BR> <BR>Your cc issuer may or may not charge you interest on cash advances depending whether or not you have a balance on your cc. I do not carry balances on my cc so I have a 30 day grace period and pay my balance due without any interest when it is due. <BR> <BR>Recent news is that the credit card companies are going to begin charging for ATM services which has already started here in the US. I don't know when it will also hit Europe. I would guess it will depend on the specific cc issuers and country. The only way to know for sure is to talk to them as you have done with First Bank. <BR> <BR>My debit card (or ATM card) is not a charge card, but linked to my savings account. My bank dosen't charge anything for cash withdrawals at their branches, but some other banks who also accept my card sometimes do. Typically a $1.50 or $2 charge. I can use my debit card at any ATM with a Cirrus or Plus logo. I've used it recently in both Canada and Italy. To check on your card, call your card issuer and ask them where it can be used and if there are any fees and what they will be. <BR> <BR>I think that a 3% fee will still be better than other forms of exchanging. Check a recent post about "cash, traveller checks, or credit cards". <BR> <BR>There are other benefits to using credit cards. You may get frequent flyer miles if you are linked to such a program. You are protected against loss or theft. It is more convenient. In recent years I have been able to travel with essentially no cash. I typically get $200 in local currency using either my debit or credit cards and many times do not use more than $50 for a trip of one week for very small purchases. <BR> <BR> <BR> <BR> <BR> <BR> <BR>

We have gone 'round and 'round on this issue because of continuing changes. <BR>The fees for credit card conversion are being introduced, but as of this week I called NationsBank and was told that there was no conversion charge for purchases made outside of the USA. But if the other big banks start to implement conversion charges, then my guess is they will all do it. The best I can tell right now is that buying currency over here costs you 5% more than using an ATM with no extra charges imposed. NationsBank imposes a 1.50 charge for the third ATM usage within a checking account statement period -- monthly in my case -- but they have no control over what a foreign bank might impose for the priviledge of using their equipment. When you purchase travelers checks in foreign denominations (non USA) the exchange rate is close to the the wholesale bank rate, but there is the problem of converting them to currency once you arrive. I presume that if you took American Express checks to an AmEx office you would get the foreign currency at no surcharge, but I have not established this for a fact, yet. <BR>If your bank starts nailing you with 3% conversion fees and $5.00 ATM usage fees, then suddenly travelers checks, particularly if they can be exchanged at no extra charge, get back into the picture. <BR> <BR>Does anybody know if the AmEx offices convert their checks to currency overseas with no additional charge? <BR> <BR>Times are changing that is for sure, with conversion fees, ATM fees, and currency purchase surcharges. <BR>

This is a rat race. <BR> <BR>I also just got a notice from Universal Card Corp that they will start tacking 2% additional charge (simple purchase, NOT cash advance) on top of 1% margin that MC already puts on for a total of 3%. I also have MBNA issued MC, but no message from them yet, so I believe it is still 1% (so far...) Last year, ATM card rate appeared to be somewhere between 1-2% (it is very had to nail down exactly since rate fluctuates during the same day.) The cash to cash exchange at exchange bureau rip off seemed to be about 6% penalty for $200 worth of exchange (fixed charge plus percentages.)

To Bob Brown: <BR>I have never had to pay additional charges for cashing my US$ traveller cheques in local currency. <BR> <BR>To Jeff: <BR>I use my Visa everywhere in the world in shops, restaurants, airports, etc. They give the best conversion rate. <BR>BUT Visa indeed charges an additional ???% (depends from the country) when you collect money from ATMs or in the bank. You will also have to pay charges when you collect money with your debit card, but the percentage will be lower. This is what my (Belgian) banker told me.

Thanks for responding to my questions. I'll just take along Visa (for good rental car insurance, convenience), AmEx for good backup, and my debit card for cash advances. That should about cover it all.