Getting the Most Euros for Your Buck
By TARA SIEGEL BERNARD
While researching hotels for a recent trip to Italy, I found that several places offered discounts if you paid in cash. They were mostly smaller hotels, and they offered discounts of 6 to 10 percent, on average. The savings aren’t enormous by any means — but they can easily add up to the cost of a nice dinner.
Tara Siegel Bernard
A.T.M.’s tend to be the cheapest way to get cash overseas.
“I find that anywhere in Europe small hotels, guest houses, and B&B’s often prefer cash,” said Rick Steves, the travel expert. “Any tourist can ask if there’s a cash discount, and often give their hotel an excuse to discount the rate.”
Getting the cash, however, can be a challenge. A.T.M.’s are generally the most cost-effective way to retrieve cash, since traveler’s checks or the exchange counters in tourist areas or airports will almost always cost more.
But the Italian A.T.M.’s I used would dispense only up to 250 euros (or around $310) per transaction, at a cost of about $9.30 a pop. That wasn’t nearly enough to cover the entire bill for our hotel in Venice and would have required multiple trips to the A.T.M. on consecutive days.
We could have converted our dollars at home, but it probably would have ended up costing even more. (We also would have to run the risk of carrying around a lot of cash.) Citibank, for instance, offers a service for customers called World Wallet, which will deliver the currency to your door ($5 for non-Citigold customers) or to a branch (free). The exchange rate, however, is poor. The bank charges a 6 percent premium above the market rate. That seems like a steep price, but it is convenient.
If you pull cash out of a foreign A.T.M., you’ll pay much less — generally, a 3 percent transaction fee at many, but not all, banks, and only a small markup from the market’s exchange rate (on May 24, for instance, I paid about $1.25 per euro while the market rate was $1.24).
So even though the hotels were offering discounts of about 6 percent, half of my savings would have been erased by foreign exchange fees at the A.T.M. Is paying cash worth the headache? Probably not, though I could have done much better if I banked with Capital One, which charges only a flat $1.50 on withdrawals at foreign A.T.M.’s.
Here’s what I have learned over the years about keeping those pesky fees to a minimum:
Call Your Institutions. Before you leave, call your bank and credit-card company and let them know you’re traveling — you don’t want to risk getting locked out of your own accounts if their fraud triggers shut you down. While you have them on the line, ask them the following:
-What kind of foreign transaction fees will I pay (on A.T.M. withdrawals and credit cards)? Some savings and checking account holders, like Citigold and HSBC premier customers, won’t pay any fees, including the 3 percent forex fee.
-Will using certain A.T.M.’s save me money? Some banks have foreign partners that won’t levy extra charges for using a foreign A.T.M. Bank of America customers, for instance, will pay a flat $5 transaction fee (on top of the 3 percent forex fee) for withdrawals made outside of its ATM Global Alliance network. Citi customers generally pay $1.50 for each withdrawal at non-Citi A.T.M.s, though fees are waived on certain accounts and balances north of $6,000. “Know where your own bank’s networks are in your destination,” said David Lytle, editorial director of Frommers.com.
-How much can I withdraw from my debit/A.T.M. card each day? Your bank may set limits, though you can ask it to raise them, Mr. Steves said. But those limits may be overridden by the foreign A.T.M.’s own limits. “I always push ‘other sum’ and see if they’ll process an order that goes higher than the basic figures offered,” Mr. Steves said, adding that most European A.T.M.’s limit withdrawals to 300 euros, though you can find some that will offer 500 euros.
Get a Better Credit Card. Many large card issuers, including Citibank, Chase and Bank of America, charge as much as 3 percent for each transaction, though American Express generally levies a 2.7 percent fee. Capital One waives all foreign transaction fees on their credit card transactions (the same goes for their A.T.M./debit cards, though you will pay the $1.50 for each transaction for using a non-Cap One A.T.M., as mentioned earlier.)
Don’t Forget Credit Unions. If you want to change some money before you leave, and many experts recommend having at least some pocket money upon landing, don’t discount your credit union. “They typically offer much lower rates,” Mr. Lytle said. “The drawback is that they are typically part of a smaller A.T.M. network, so it really does pay off to take a couple of hours out of your life to figure out where you might save.”
That will leave you with more money for shopping, delectable dinners and other treats.