I had to post this one here because I remember when I went to London after they changed the rules about credit card spending overseas. The cards were charging an exorbitant amount of fees when you use your credit cards overseas. What would you do when you need cash? It used to be beneficial to use your credit cards to purchase since you get a better rate of exchange. Not any more. If you must travel to Europe, follow these tips.
- Topher
I cashed my last traveler’s check years ago. And I haven’t stepped into a European bank in ages. Now, I get my cash from ATM machines.
Euros
Fifteen European countries — and more than 300 million people — use the same currency. Using euros, tourists and locals can easily compare prices of goods between countries. And we no longer lose money or time changing money at borders.
Not all European countries have switched to euros. As of now, major holdouts include the United Kingdom, Denmark, Norway, Sweden, and Switzerland. Each of these countries has its reasons for choosing not to use euros. Other countries, which have only recently joined the European Union — such as the Czech Republic, Poland, and Hungary — will adopt the euro in the next few years.
But even in some non-Euroland countries, the euro is commonly used. For example, some Swiss ATMs give euros, most prices are listed in both Swiss francs and euros, and travelers can get by in that country with euro cash.
Cash Machines (ATMs)
Throughout Europe, cash machines (ATMs) are the standard way for travelers to get local currency. European ATMs work like your hometown machine and always have English-language instructions. Using your debit card with an ATM takes dollars directly from your bank account at home and gives you that country’s cash. You’ll pay fees, but you’ll still get a better rate than you would for exchanging traveler’s checks.
Ideally, use your debit card to take money out of ATMs. You can use a credit card, but you’ll pay more.
Before you go, confirm with your bank that your card will work in Europe and alert them that you’ll be making withdrawals while traveling — otherwise, the bank might freeze your card if it detects unusual spending patterns. Some banks automatically block US debit card use in certain countries — including the United Kingdom — to protect against fraud. (Credit-card companies do the same thing — inform them of your plans as well.) You don’t have to tell them specific dates you’ll be away. Just saying you’ll be in France in July is sufficient.
ATM transactions using bank-issued debit cards come with various fees. Your bank may levy a flat $2–5 transaction fee each time you use an ATM, and/or may charge a percentage for the currency conversion (1–3 percent); the ATM you use might charge its own fee, too. If your bank charges a flat fee, make fewer visits to the ATM and withdraw larger amounts. (Some major US banks partner with “corresponding” European bank chains, meaning that you can use those ATMs with no fees at all — ask your bank.) Other fees may apply; for all the details, see The Sleaze of Fees, below. These additional expenses can pile up. Quiz your bank to figure out exactly what you’ll pay for each withdrawal.
Note that if you use a credit card for ATM transactions, it’s technically a “cash advance” rather than a “withdrawal” — and subject to an additional cash-advance fee. If you plan to use a credit card rather than a debit card for ATM transactions, ask the issuing bank about all the associated charges.
Since European keypads have only numbers, you will need to know your personal identification number (PIN) by number rather than by letter — derive the numbers from your hometown bank’s keypad. A PIN with more than four digits may not be accepted. Plan on being able to withdraw money only from your checking account. You might be able to dip into your savings account or transfer funds between accounts, but don’t count on it.
Bringing two different cards provides a backup if one is demagnetized or eaten by a machine. Make sure the validity period of your card won’t expire before your trip ends.
Ask your bank how much you can withdraw per 24 hours. Note that foreign ATMs may not let you withdraw your daily limit. Many machines have a small maximum, forcing you to make several withdrawals and incur several fees to get the amount you want. When choosing how much to withdraw from a cash machine, request a big amount on the small chance you’ll get it. If you’re lucky and the machine complies, you’ll save on fees. If you’re denied, don’t take it personally. Try again, requesting a smaller amount. Few ATM receipts list the exchange rate, and some machines don’t dispense receipts at all.
In some less expensive countries (especially in Eastern Europe), an ATM may give you high-denomination bills, which can be difficult to break. My strategy: Request an odd amount of money from the ATM (such as 2,800 K? instead of 3,000 K?). If the machine gives you big bills anyway, go immediately to a bank to break them.
If you’re looking for an ATM, ask for a distributeur automatique in France, a cashpoint in the UK, and a Bankomat just about everywhere else. Many European banks have their ATMs in a small entry lobby, which protects users from snoopers and bad weather. When the bank is closed, the door to this lobby may be locked. In this case, look for a credit-card-size slot next to the door. Simply insert or swipe your debit or credit card in this slot, and the door should automatically open.
Transaction Fees Add Up
It pays to shop around for the best rates, both for debit-card ATM withdrawals and credit-card transactions. Consider these examples and you’ll see how these fees can really add up over the length of your trip.