I’m going back to Italy for a few years. Last time with the Lira I carried around a few million at a time for purchases. This time I want to make greater use of credit cards. Are there specific cards that don’t have a fee when paying my for my Euro purchases with U.S. dollars?
An alternative would be getting an Italian Bank card though the banking system there is still a little primative.
I have used my credit cards overseas, and to my knowledge, have never paid any specific fee just for using them. I’d quote you colloquial memory, so take no stock-in-fact of this, but as I’ve heard it, if you use a credit card, they’re legally requried in the US to give you the best exchange rate of that particular month towards your purchases.
Tripler
But FWIW, I’ve used my cards overseas without any apparent penalty.
From what I recall:
Visa/Mastercard charge a 1% conversion fee you can’t avoid.
Most major banks that issue Visa/Mastercards add an extra 2% just to pad their bottom line. They provide no service whatsover that differs from foreign or domestic transactions.
Amex charges 2% I believe.
You can find banks that issue Visa/Mastercard without tacking on the extra 2%, though I don’t know of any off hand. But even then, 1% is a lot of money over several years. You’d be better off getting a card/bank account over there.
Check with your bank to be sure, but in all likelihood, your bank’s ATM card will work at ATMs all over Europe. Mine did.
It’s a lot simpler to get cash from European ATMs than to make exchanges or carry traveller’s checks, and you’re likely to get a better exchange rate, too.
In the last year and about a half I have been to the following places on business and vacation (sadly, mostly business):
Bangalore
Sydney
Tokyo
Toronto
Manila
London
Frankfort
Florence
I was using my platinum American Airlines world traveller card (or something like that). I have not been charged any type of transaction fee. However, every second time I’ve used it in a country, it got denied because I forgot to tell Citicard (the issuing bank) that I was leaving the country. I found it very annoying to get this rectified and very big-brother-ish of them to do this “for my safety.”
Now a couple of people here seem to think they’re not being charged foreign transaction fees. But they most likely are - they’re just bundled into the actual charge itself. Only now are banks starting to unbundle the fee on statements. Citi and Chase charge 3% (1% + 2%) on most of their cards, if not all. Apparently Capital One does not charge the extra 2% (yet). If you want to avoid that extra 2%, look at your fine print carefully and go for a small bank or credit union.
As a side note that 1% currency conversion fee applies to ATM withdrawals as well. You can’t avoid it. And exchanging cash or traveler’s checks are even costlier.
Thanks for the input. Guess I’ll have to dig out all the old credit card agreements and the microscope and read them. Looks like there will be a fee somewhere. Way back, 1994 and 95 I was able to use my ATM card at one machine in Jiddah, Saudi Arabia with no charge to get Riyals (really weird).
I’ll give a couple of companies a call and try to talk to a human also.
I agree. Changing money from one currency to another is always going to cost you unless there are some very particular conditions (e.g. the euro conversion situation). Card companies do exactly what all those ‘no commission’ exchange bureaux do, namely convert the transaction at a rate favourable to themselves. So for instance if the conversion rate is normally 1:2 they’ll convert the transaction at 1.02:2 and pocket the extra .02.
This is a very sweet way of skimming money because it’s not immediately obvious, hence the recent outcry and demand that these costs be explicitly added to the statement.