Are we being penny wise here with this exchange-transaction fee issue? For me, it's confusing. Like I just posted elsewhere, I went to the bank and took out enough money for the 21 days over the three countries, (* I have 2 back-up cr. cards in case). So I figure, get to Germany with my dollars, buy enough Euros for the bus to get me to the hotel, in Frankfurt, then go to the first German bank, lay down my dollars and get the Euros. To me that sounds like the best way to avoid the additional charges by using ATM's and cr. cards. Donno- confused. Oh Lord, this is the most of the decisions so far!!!!

virgi, by exchanging cash you probably paid 7-10% markup plus any flat fees. By using my BofA ATM card I paid a 1% markup and no fees if I use a partner bank. If I'm in a country with no partner banks I use my credit union ATM which charges 1% plus a $1 fee. Sorry, but you lost money and you didn't save time, as an ATM withdrawal takes appx 30 seconds.

I'm no financial genious, but paying 1% at the ATM beats the crap out of paying 7-10% at a bank or exchange facility.

Yeah p-m No I didn't lose it yet - I leave Tuesday. I'm going to re-deposit the cash, and just go with the ATM. Luckily I found out from 2 fodorites just a while ago. By the way, B of Am told me (I called) that the transaction fee is 3%. I spoke with them yesterday. Found out from ira and j6 something.However, this subject is mentioned many times, I should be able to absorb it by now!

Sorry virgi, I thought you were speaking in past tense. I know the transaction fee for using a debit card for purchases is 3%, but when I used my debit card in Feb 2007 it was 1% for the ATM w/d. Of course it's possible they have raised it since then, so I will call BofA and ask about that. If it has gone up to 3% I will use my credit union account from now on.

virgi, I think you are wrong as BofA still only charges 1% for ATM withdrawals in Europe -- and nothing in Germany if you use Deutschebank ATMs which are everywhere. Even if they did charge 3% why would you think it's easier to pay 7 to 10% to exchange your dollars at banks or exchange booths over there? Are you pulling our collective legs here or what?

I meant to say "and nothing extra" (like the usual $5 per transaction charge for ATM withdrawals) when using Deutschebank ATMs.

virgi: As I said earlier, US banks simply do not give out accurate information about foreign transactions. Or hardly ever anyway. I am almost positive the customer service agent was talking about purchases. 3% is about right for that w/ BofA. maybe because you mentioned there was a visa logo on the card or something.

Good thing you are re-depositing the money into your acct. Carrying all that cash around all over Europe is a recipe for disaster. You might be able to put it in a hotel safe (not all hotels offere that service BTW) but not when you are traveling between cities/hotels.

Obfuscation! Or do the money changers explain clearly what their price will be? The question posted needs re-wording. The Automatic Teller Machine (ATM) has nothing to do with the Exchange Rate or Currency Conversion Rate. That rate is determined by the customer's service level and the bank making the conversion. A secondary charge is assessed by the customer's bank. The conversion rate changes daily! The customer's bank fee is fixed (at least until notice of a change is posted). Europe has many ATM machines that have no connection with a bank. They tend to charge higher use fees than captive/house machines. Please note; you are not being 'ripped off' at an airport or hotel exchange desk, you are paying for convenience and service.

BTW, every credit and debit card comes with an explanation of the foreign exchange policy. Who ever reads those?

OK, I'll answer my own question.

Apparently, nobody here.

From the VISA site today, 10/15/07

Currencies fluctuate every day. The rate shown is effective for
transactions submitted to Visa on October 15, 2007.

1 US Dollar = 0.49 British Pounds

The 'currency calculator' below gives you an indication of the cost of purchases you make when travelling internationally.

Effective: Oct 15, 2007
1 USD = 0.49 GBP / 1 GBP = 2.04 USD

British Pounds to US Dollars

1 = 2.04 50 = 101.78
5 = 10.18 75 = 152.67
10 = 20.36 100 = 203.56
20 = 40.71 150 = 305.34
25 = 50.89 200 = 407.13
30 = 61.07 250 = 508.91
40 = 81.43 300 = 610.69

Tracker -- simple answer to your question. I used by BofA ATM/debit card at Barclay's in London about 4 times during our stay there in June/July. All the withdrawals were done at the XE.com rate for the date and a 1% "charge" was added to that. There were NO other charges. Period.

We arrived in Mallorca yetsreday from the U.K. Although I had enough euro in hand from previous trips, it still seemed a good idea to get more, so it was off to the bank in Palma.

I was unable to get money at the first five ATMs. The transaction was cancelled by the machine. It was not a problem with my card, since a local resident before me had the same problem. Fortunately, my sixth attempt was successful, and my daughter had no probelms with her card later that afternoon. I rely on getting money from ATMs on overseas trips, and was glad to have some euro already with me.

Incidentally, the ATM offered to debit my account either in pounds or in euro, and quoted the exchange rate it would use. I have had the previous offer when using a credit card in a French hypermarket, and was similarly given the full details. This completely throws me, since I cannot recall the current exchange rate and work out which is the best option while standing in the street waiting for my money.

When a store or ATM offers to accept payment in pounds in a euro-country, you are falling victim to dynamic currency conversion, a good deal for the credit-card company, which charges extra fees for the "convenience" but a bad deal for you. The precentages vary but are usually significant ... considerably more than the 1 or 2% conversion fee that most banks or credit-cards charge to take money out of a foreign ATM or buy something with a credit card in a foreign currency.

So the answer is NEVER allow a bank or credit card to charge you in your own currency back hom; it's ALWAYS a better deal to be charged in local currency.

And almost always to your benefit to use an ATM to withdraw money in a foreign country, especially if you use an ATM that has a deal with your bank so you don't have to pay a withdrawal fee. As long as you don't get a cash advance on your credit card, you'll always do better than if you exchange money. You will usually have to pay a small percentage (often 1 or 2%) above and beyond the 1% that the processing company charges (usually another 1%), and some banks like Capital One don't charge anything.

i agree with janisj, it really isn't that big of a deal. use a b of a debit card at a partner bank (Barclays or BNP) or Capital One card and you will get competitive rates.

Some have mentioned credit union debit cards and they seem like a good way to go also.

Another caution about DCC-- having a transaction converted to your home currency-- the on-the-spot conversion rate will include a tidy percentage for the merchant, but to your credit card company it is still a foreign transaction, subject to the "foreign transaction fee" just as if it had been rung up in pounds or euros. You'd most likely be paying 2 or 3% to the merchant and the same to the card-issuing bank, for a total of 5% or more.

I really think some folks are mixing up "plain vanilla" ATM cards with debit cards, credit cards, and cash cards branded with a Visa or Mastercard logo.

To get the best rate, make sure you get a plain ATM card from your home bank--not a debit card, not a credit card, not a "check card."

With a generic ATM card you should only pay a per-transaction fee for each withdrawal. The fee (often $5) is set by and charged by your bank. Conversion rates on currency should be the commercial bank rate, or very close to it.

I can verify this works with M and T Bank regular ATM card.

If your card has a Visa or Mastercard logo on it, all bets are off (and fees may be ON).

Frommer's Editor makes a good point about dynamic currency conversion on credit cards. Yet another way the money lenders can steal from you!

KidstoLondon, I don't know exactly what you are talking about. BankofAmerica's ATM card IS CALLED a Debit Card (also on the card mine is called a "Platinum check card". I used to have an "ATM only" card from them, which you can get as a special request. But regardless, withdrawing money from an ATM is absolutely NO DIFFERENT with any of those. I gave up the ATM only card as some banks in Europe will not work with an ATM only card -- more and more they need to have a Visa or Mastercard connection (AND NO I'M NOT TALKING ABOUT BEING A CREDIT CARD).

I have no idea what you mean by "all bets are off" if your ATM card has a Visa or MC logo. Are you aware that Cirrus and Plus are also Visa and Mastercard logos -- that's what those names are? Having one of those logos on an ATM or Debit card will in NO WAY affect the charges for ATM withdrawals using that card. It would make a difference if it is a credit card, however.

The real way to tell the difference between a credit card and any form of ATM card is that if it is linked to take money directly from your own bank account for each withdrawal or purchase, then it IS an ATM card. If instead you get a monthly bill that you need to pay, then it is a credit card. Most (possibly all?) banks will charge no difference whatsoever in fees for ATM withdrawals from either their ATM only, ATM/debit, or ATM/check card.

I agree w/ NeoPatrick re ATM-only vs check/debit cards. No difference what-so-ever as far as I can tell. I've and had both types of cards from several different banks/credit unions. 6 of one / Half dozen of the other in my experience.

In terms of fees there is no difference between an ATM card and a debit card. But as Patrick and I learned the hard way, there are a few countries (Belgium, for example) where the ATM card does not work in the machines but the debit card does. That's when I switched from the ATM card to the debit card and I've had no trouble since. And once again, the fees are the same.