The simple rule in foreign exchange is this: The more often you exchange currency, the more money you lose. Evertime you get money from a bank, the hotel, the ATM, or off your credit card, you will be subject to a retail rate of exchange and a fee. The more often you do this, the more money you lose. So, limiting the number of exchanges you do is the best way to save money.
Steps
- Take as much cash, in the foreign currency, as you feel comfortable carrying and get it before you leave for the airport. Check with your bank to see if they can sell you some currency before you go. Or go to http://www.foreignexchangeservices.com and order the cash online.
- For any amount you need over the amount you feel comfortable carrying, try to take traveler's cheques in that currency — not US dollars. If they are not available, plan on using your ATM card.
- ATM's are expensive! While it's true that you'll get very competitive rates from ATM's, the fees will come over the top and eat away the savings. It's generally about $5 US from your own bank to use a foreign ATM with about another $3 US equivalent from the foreign bank – although there is no limit to what the foreign bank may charge. And this is on every transaction – no matter the amount!
- Credit Cards usually get wholesale rates (which is very good) but have fees of 2 – 3% of the US dollar amount of every purchase.
Tips
- If you use your ATM Card, make sure your PIN is only 4 digits long. Many foreign ATM's won't accept 3, 5, or 6 digit PIN's. Make sure your PIN does NOT begin with a zero.
- Memorize your PIN by the number. NOT by any word it may spell out. Foreign ATM's probably won't have an English alphabet on the key pad.
- Try to max out your daily limit. You get the fee regardless of whether or not you withdraw 20 euros or 1,000 euros. So, try to withdraw your daily max so you only have to pay the fee once – then use that cash for as long as you can before returning to the ATM.
- Call your bank and see if they will increase your daily withdrawal amount. That way you can get more with each withdrawal for the same fee.
- Don't use credit cards at ATM machines. Withdrawals will be treated like a cash advance, plus it will be subject to all the usual fees.
Warnings
- Plan for the worst. Hope for the best.
- Take at least one form of back up access to your funds. The people that get in the most trouble are the ones that just take one card or something and then lose it. With no other access to money, it will be hard to get local currency. Your family will most likely have to wire cash to you, which is very, very expensive.
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6 Comments On How to Get Cash when in Europe
SalB
It's probably a good idea to have a little local cash in hand when you land. On our first trip we had $100 worth of euros to get started. Keep in mind, though, that your local bank may charge a premium for getting euros to you in the states. If you plan ahead, you won't have to pay overnight postage, but there is still usually a pretty steep charge in addition to the exchange rate.
At the end of the trip, save some euros and put them in a safe place at home. This is seed money for your next trip. That way you don't have to worry about euros when you land; you'll have them from the previous trip.
Next, avoid those credit cards when you can. We've found debit cards are a much less expensive alternative. Be sure to check with your local bank or credit union to see if their service is available in Europe but I'll bet it is. This works with credit union debit cards too.
Check credit cards carefully. They are not all equal. Some have much higher fees than others. Some have odd ways of billing the charges too. Use your card with the lowest fee. CapitalOne is a fairly low-fee card to use if you need to get a card for the trip. You can also collect airline miles with it.
Be sure you phone your bank and credit card companies and tell them where you will be and when. If they think you are in Illinois and your card is charged in Paris, they may not honor it. When you have them on the phone, ask for the phone number FROM Europe that you need to call if your card is lost or stolen when you are over there. It is different from the US number on the back of your card.
Now, those traveler's checks (cheques): Don't bother. They are seldom used these days. Many places won't accept them and others levy a charge to cash them. You've already paid a charge to get them so why pay more? Two credit cards and a debit card will take care of any money needs you may have. Just be sure you know your daily limit on each card.
Great tip above about being sure you know your PIN in numbers rather than alphabetically. European ATMs do not have letters on them. If you use a word, check it on your telephone dial to get the numbers.
Oh yes, there are ATMs in the airport and train station nearly everyplace so you can get euros when you disembark. There seems to be an ATM on every corner and there are usually several in nearly every town. If you can't find one nearby, ask at your hotel desk.
Charge purchases when you can as there is no extra fee for this on any credit card we've ever used. The fees are to get cash from an ATM. Use the debit card for cash advances, not the credit card.
I have been using my French debit card for years world wide , getting cash , making payments , and booking flights . I thought I would use KLM agin this time , but when I go to the end of the the booking to pay , it said they only accepted credit cards , not debit cards . Wow , and this is a European airline , they charge for all bookings except internet ones , and now on the internet only accept credit cards .
The credit cards we have to pay for , debit cards do cost the Company , but its quaranteed payment . They seem to be wanting to make money at all costs , not giving customer service.
I know you get charged a cash advance fee if you use your credit card in an ATM, but does this still apply if you put cash ONTO your credit card before you leave home? i.e., overpay your credit card bill so you’re “in credit” before your holiday.
SalB
Hi. This can vary by company so call and see what your credit card company (companies) have to say. We tried it once and it didn't work. We were still charged the fees. The only advantage we found was a lower bill when we got home . . . and that is nice too.
We get around it by taking out cash with our debit cards and using the credit cards only for purchases. You should check with your bank as that may be different with different banks.
Debit card for cash; credit card for purchases.
Have a great trip!
I have heard that there are some transactions that will not work with a US card because European cards now have embedded chips that we don’t have. I was wondering if it is possible to buy a pre-paid debit or credit card in France with the chip and, if so, how to go about doing that and wether it’s worth it or not.
Thanks.
SalB
Hi. We've been dealing with the embedded chip problem for several years; it's not completely new. Any place that accepts credit cards is supposed to offer an alternative to non-embedded chip card owners. In practice, many will simply tell you their machine is out of order. Usually they will take your card and run it through a different machine, often asking you to accompany them to the register when you do. We try to carry enough cash to take care of the occasional lunch when we get the "machine is broken" story, but have pushed it and gotten our card accepted.
We've never had a problem with ATM machines so it is possible to get cash. I'm not sure you need to worry about the chip problem yet although if we don't get the chips soon, it may become a problem.
We've also discovered our cards won't work in some French credit card machines unless they are warmed a little. Sounds silly but we learned this from a French waitress. She took our non-working credit card and rubbed it on her leg for a few seconds and voila . . . it worked. I've tried it myself several times and it has always worked. So . . . if your card won't work, rub it briskly on the side of your sleeve or pant leg and ask them to try it again. Most waiters know this and do it themselves. As I said, it seems silly . . . LOL