Better to Change US $ to EU in the US or wait til Europe

[iancal]

The question to ask your bank is not just their ATM fee.

 

The real question is do they use the prevailing FX rate or do the use the prevailing FX rate AND add a few points on top of it.

 

This may not apply to most but our typical foreign ATM withdrawal is $500-600. (we often pay our hotels in cash in order to get a 5-10 percent discount, others insist on cash). Using our regular bank card would result in a $5 ATM fee plus approx. $15. in hidden service fees via an inflated FX rate. When we use our travel card the fee is a flat 1 percent, minimum $5. and the FX rate is essentially the rate on xe.com. Likewise, we sometimes book travel products, cruises included, in another country if the fare is substantially lower, which it sometimes can be. On a $7500. booking avoid $200. of hidden visa fees by using a credit card than only uses the prevailing FX rate, not the rate bumped up by 2.5-3 percent.

 

It is not much of an issue if you only need some day money or you are not charging much on your credit card. On one extended trip we sat down with our statement and determined that we had avoided $650-$700 of excessive bank fees by using the card. But, our daily bank is a Canadian bank. They are notorious for very high service charges-hidden and otherwise.

[woodworker&knitter]

We are getting ready to head over to Prague next month and Rome early next year. Spoke with my credit union and was told to use bank ATM's in Europe to get the best exchange rate - my CU only charges a $0.75 per transaction fee but to be aware that their ATM's might charge a service fee as well.

Euros are not readily accepted in the Czech Republic. They use Koruna.

We actually ran into quite a few stores that refused the euro while we were in Prague

[Fouremco]

You should be using a debit ATM card not a credit card to get cash at an ATM. Don’t do a cash advance.

 

What is your rationale for not taking credit card cash advances?

 

You can get an ATM Card from Capital One Bank or Charles Schwab that does not charge foreign exchange fees. There are probably others. Some credit unions.

Which is fine for US residents but not for Canadians and others on this board.

Edited August 9, 2018 by Fouremco

[Charles4515]

What is your rationale for not taking credit card cash advances?

 

 

 

 

There is a fee for cash advances. For example $10 or 5%. Whichever is greater.

[Charles4515]

What is your rationale for not taking credit card cash advances?

 

 

 

 

There is a fee for cash advances. For example $10 or 5%. Whichever is greater. That’s how my US cards work. Don’t have a clue about Canadian credit cards or banks. If you are Canadian you have to deal with that.

[whogo]

What is your rationale for not taking credit card cash advances?

I have a credit card that considers an ATM withdrawal to be a cash advance and charges an immediate 3% for the cash advance, then marks up the foreign currency by 3% and starts charging interest immediately at about 20% APR. There are better ways to buy foreign currency.

[Javaholic]

Thanks all - Great info.

[Fouremco]

There is a fee for cash advances. For example $10 or 5%. Whichever is greater. That’s how my US cards work. Don’t have a clue about Canadian credit cards or banks. If you are Canadian you have to deal with that.

 

There's usually a charge for using a foreign ATM for cash advances whether using an ATM or credit card, so your earlier post saying "You should be using a debit ATM card not a credit card to get cash at an ATM. Don’t do a cash advance" might be applicable in some cases, but certainly not all.

 

I have a credit card that considers an ATM withdrawal to be a cash advance and charges an immediate 3% for the cash advance, then marks up the foreign currency by 3% and starts charging interest immediately at about 20% APR. There are better ways to buy foreign currency.

 

On the other hand, as iancal pointed out in an earlier post, by maintaining a positive balance on your credit card account, with most financial institutions you can avoid being charged interest. Also, by using a credit card that charges no currency exchange fee, you avoid that 2.5-3.0% hit as well.

[Charles4515]

There's usually a charge for using a foreign ATM for cash advances whether using an ATM or credit card, so your earlier post saying "You should be using a debit ATM card not a credit card to get cash at an ATM. Don’t do a cash advance" might be applicable in some cases, but certainly not all.

 

 

 

On the other hand, as iancal pointed out in an earlier post, by maintaining a positive balance on your credit card account, with most financial institutions you can avoid being charged interest. Also, by using a credit card that charges no currency exchange fee, you avoid that 2.5-3.0% hit as well.

 

I don't know how your Canadian cards work but in addition to any foriegn transaction fees, or no foreign transaction fee, depending on the particular card, our cards charge a fee for a cash advance. So my Chase Reserve credit card with no foriegn transaction fees charges 5% of the cash advance with $10 minimum as cash advance fee. Then it charges 26% interest on the cash advance. Interest starts accuring when the cash is drawn. If I used my Chase Freedom card for a cash advance I would pay the 3% foriegn transaction fee, a fee of 5% of the cash advance with $10 minimum as a cash advance fee. Then 24% interest on the cash advance. Which is drawn when the cash is drawn.

 

My Capital One Bank ATM card for my checking account charges no foreign transaction fee and no ATM fee. If the bank owning the ATM charges an ATM fee Capital One pays the fee.

 

Clearly I don't want to get a cash advance on a credit card. I want to use my ATM Card and get cash from my checking account. If I didn't have such a good terms on my Bank ATM card it still would be preferable to use the debit card over getting a cash advance on a credit card.

Edited August 9, 2018 by Charles4515

[Cruise Junky]

What is your rationale for not taking credit card cash advances?

 

 

.

 

Most credit cards charge interest from the day you withdrawal the money and as others have said plus a fee for the cash advance. Never do a cash advance on your credit card, whether you are Canadian or American. It's not like using the credit card to pay for things and you have a few weeks to pay it off. Completely different beast doing a cash advance.

 

Use a debit card.

[iancal]

We routinely do a cash advance on our credit card when traveling.

 

We never pay interest.

 

Why? We simply create a credit balance on the card prior to leaving home and we keep topping up that credit balance in order to insure that we never pay interest. So far, over six years of international travel, four to six months a year, accessing ATMs via cash advance we have never been charged a penny of interest. We simply ensure that the account always has enough of a credit balance to support our next anticipated ATM cash advance.

 

We never use our debit card. If hacked it provides someone access to our bank accounts with little recourse.

[Cruise Junky]

We routinely do a cash advance on our credit card when traveling.

 

We never pay interest.

 

Why? We simply create a credit balance on the card prior to leaving home and we keep topping up that credit balance in order to insure that we never pay interest. So far, over six years of international travel, four to six months a year, accessing ATMs via cash advance we have never been charged a penny of interest. We simply ensure that the account always has enough of a credit balance to support our next anticipated ATM cash advance.

 

We never use our debit card. If hacked it provides someone access to our bank accounts with little recourse.

 

 

If anyone else is thinking of doing this, be very very careful. Taking a cash advance on a credit card acts as a red flag to your creditors which may affect rates and lending power in the future.

[Fouremco]

If anyone else is thinking of doing this, be very very careful. Taking a cash advance on a credit card acts as a red flag to your creditors which may affect rates and lending power in the future.

Creating a credit balance and withdrawing your money and not the bank's should never have any adverse impact on your credit rating or future borrowing power.

[Cruise Junky]

Creating a credit balance and withdrawing your money and not the bank's should never have any adverse impact on your credit rating or future borrowing power.

 

They don't look at a credit balance, it tracks how many cash advances you're doing from credit. I used to work for one of the big 5. I'm telling you this from experience. They often don't look at the big picture of it was in a credit state.

 

I just had a large refund of a deposit on a card that had a zero balance. All of a sudden I have a negative balance of $960. I had to phone to have it transferred to my checking account as it would have had a negative impact if I'd just have done the cash advance.

[Charles4515]

We routinely do a cash advance on our credit card when traveling.

 

We never pay interest.

 

Why? We simply create a credit balance on the card prior to leaving home and we keep topping up that credit balance in order to insure that we never pay interest. So far, over six years of international travel, four to six months a year, accessing ATMs via cash advance we have never been charged a penny of interest. We simply ensure that the account always has enough of a credit balance to support our next anticipated ATM cash advance.

 

We never use our debit card. If hacked it provides someone access to our bank accounts with little recourse.

 

I notice you only mention interest but don't say anything about fees. If I did that I would pay 5% fee every time I did it. So if I drew $300 the fee would be $15. Draw another $300 another $15.

 

In the United States we are not liable if our debit card is hacked as long as we report it. I use my debit card whenever I need cash without any concern.

[iancal]

Our fee was straightforward. Minimum $5.00 charge. One percent. Our usual cash advance would be $600. Our s/c would be $6.

 

If we used our bank card the charge would have been $5 (ATM fee) plus a hidden fee (2.5 percent) on the inflated exchange rate) $15 for a total fee of $20.

 

If we withdraw twice a week for eight or ten weeks the difference really adds up.

Edited August 9, 2018 by iancal

[Hlitner]

Perhaps we need to talk about credit card "Cash Advances" vs the use of ATM/Debit cards...as it pertains to most Americans (we cannot speak to the situation in Canada). In the USA, credit card Cash Advances are one of the worst ways to obtain cash and should generally be views as a method of last resort. Nearly all US Credit cards look at Cash Advances as akin to a loan and apply interest (often at rates over 20%) from the date of withdrawal until they actually are paid. In addition there may be other significant fees.

 

When it comes to ATM/Debit cards...unlike a cash advance (which is essentially a loan) it involves a transaction where you are simply withdrawing your own funds. While many USA ATM/Debit cards do charge withdrawal fees (but never interest),,, there are also many ATM/Debit cards that charge zero fees (we have 3 of these cards). ATM/Debit cards are not credit cards...but are simply bank cards tied to specific bank accounts. In the USA, ATM/Bank cards are not considered credit cards when it comes to our Federal Laws that afford us certain protections when using Credit cards.

 

Hank

[Cruise Junky]

Our fee was straightforward. Minimum $5.00 charge. One percent. Our usual cash advance would be $600. Our s/c would be $6.

 

If we used our bank card the charge would have been $5 (ATM fee) plus a hidden fee (2.5 percent) on the inflated exchange rate) $15 for a total fee of $20.

 

If we withdraw twice a week for eight or ten weeks the difference really adds up.

 

It’s not 2.5% on top of an inflated exchange, there is no inflated exchange on a debit transaction. You really need to check your banks terms. ATM fees are waived on a partner bank and they’re everywhere.

[iancal]

Our banks exchange rate on foreign ATM withdrawals is typically 2.5 percent higher than the prevailing ex.com exchange rate. Instead, We use a another credit card that dies not charge a premium on either charges or on cash advances.

[Cruise Junky]

Our banks exchange rate on foreign ATM withdrawals is typically 2.5 percent higher than the prevailing ex.com exchange rate. Instead, We use a another credit card that dies not charge a premium on either charges or on cash advances.

 

But that’s still only 2.5 above the XE rate which is pretty darn good. If I’m avoiding paying the ATM cost which in most cases I am, 2.5 is peanuts on an ATM withdrawal.

[iancal]

It is still 2.5 higher than I pay when we instead get a cash advance on the credit card that we use for foreign travel.

 

So, if we are withdrawing $500 or $600 twice a week for 10 weeks, the difference really adds up. Clearly, if we are on a cruise we only need day money however most of our extended travel is land based, independent.

 

We do not pay interest on this credit card cash advance because we maintain a credit balance on the account.

[Cruise Junky]

It is still 2.5 higher than I pay when we instead get a cash advance on the credit card that we use for foreign travel.

 

So, if we are withdrawing $500 or $600 twice a week for 10 weeks, the difference really adds up. Clearly, if we are on a cruise we only need day money however most of our extended travel is land based, independent.

 

We do not pay interest on this credit card cash advance because we maintain a credit balance on the account.

 

How is it higher when you’re paying a cash advance fee? Plus the 2.5%? I guarantee you, you’re paying more than a debit withdrawal.

[iancal]

It is not higher. My bank charges me an extra 2.5 percent on FX PLUS a $5.00 ATM fee.

 

My travel credit card charges me a fee of 1 percent on cash advances. No extra 2.5 percent on a foreign transaction. No ATM fee.

 

On a $500 ATM withdrawal the bank adds and extra 2,5 percent on the FX rate, ($12.50) and an ATM fee of $5. for a total of $17.50.

 

A cash advance on my travel credit card has a fee of 1 percent on the same transaction, ie. $5. No interest charge because we keep the card in a credit balance when we travel.

 

From time to time over the past six years we have tested this. We withdraw an equal amount on our bank card, then withdraw the same amount on the same ATM at the same time on our travel credit card. The credit card cash advance amount, adjusted for our home currency has always been less than the withdrawal amount on our bank account, adjusted for currency. First time I tried it was a bank in Bellingham. Last time was a year ago at an ATM in Thailand. Several time in between. The variances have always been between 2 and 2.6 percent in favour of the travel credit card vs a bank card withdrawal. I know several people who do exactly the same for the same reason.

Edited August 10, 2018 by iancal

[Cruise Junky]

It is not higher. My bank charges me an extra 2.5 percent on FX PLUS a $5.00 ATM fee.

 

My travel credit card charges me a fee of 1 percent on cash advances. No extra 2.5 percent on a foreign transaction. No ATM fee.

 

On a $500 ATM withdrawal the bank adds and extra 2,5 percent on the FX rate, ($12.50) and an ATM fee of $5. for a total of $17.50.

 

A cash advance on my travel credit card has a fee of 1 percent on the same transaction, ie. $5. No interest charge because we keep the card in a credit balance when we travel.

 

From time to time over the past six years we have tested this. We withdraw an equal amount on our bank card, then withdraw the same amount on the same ATM at the same time on our travel credit card. The credit card cash advance amount, adjusted for our home currency has always been less than the withdrawal amount on our bank account, adjusted for currency. Usually by 2.5 percent, accurate to the third decimal. First time I tried it was a bank in Bellingham. Last time was a year ago at an ATM in Thailand. Several time in between.

 

Your math is flawed. It’s the exchange rate plus 2.5% not the amount you withdraw. And as I said, find a partner, no ATM fees.

[iancal]

My math is not flawed. There is definitely a difference on the bottom line to us each and every time we do a comparison. I pay foreign ATM fees because the only account we have at the bank is a gratis plus 55 account. Not interested in a monthly fee account of any kind.

 

Does not matter to me what you really think. All that matters is that we have been saving a fair amount of bank fees by doing this for the past six years of fairly regular travel.