Converting $ to Euros

[OldPro]

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Originally Posted by jpjr I tried to find a similar thread, as I am sure someone has asked this before, but could not find and answer. Where will we find the best exchange rate when we travel to Spain and Italy? I will be checking with our bank for advice and on-line conversations say ATMs are ok; however, I am sure our seasoned travelers here will have tried and true experiences that will help us. We will have to spend at least $1,000 in cash at the different venues we plan on attending. Thanks in advance for your help.

So jpjr, have you got it figured out yet?

[audreyh1]

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Originally Posted by OldPro I cannot imagine there is a law that says a bank must say they charge a fee that is in fact charged by Visa, not by the bank. Such a law/regulation would indeed mean they could not advertise, no foreign transaction fees if they passed it on. But such a law/regulation would make no sense legally. I remain sceptical.

They advertise it by touting their no foreign transaction fee.

I believe that US issued cards are quite uniform in their reporting of foreign transaction fees. There were some class action lawsuits a couple of decades ago that cleaned up the reporting and language on foreign conversion fees.

I really don't think a site such as Bankrate.com is going to say that

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Credit card foreign transaction fees Capital One Issuer fee: none. MasterCard/Visa fee: 1%; absorbed by Capital One Total: 0%

unless it's accurate.

So a US card that says 3% foreign transaction fee includes the VISA charge, as does one that advertises 1% foreign transaction fee. But one that touts 0% must really be charging 1%

I would think it bizarre for BofA to specify 3% for their Cash Rewards VISA and 0% foreign transaction fee for their Travel Rewards VISA and the later actually have a 1% transaction fee while in the former it is included in the 3%.

And on the VISA conversion site you can put in 0% to 5% for the bank fee, but if you put in 3% you're really getting the number for 3%, but if you put in 0% you really get the number for 1%?

And your valuepenguin link itself says:

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Foreign Transaction Fees by Issuer: Credit card FX fees vary greatly between issuers, and generally average 3%. Some, like Capital One, absorb the charge so their cardholders don't ever have to worry about them

And they list Bank Americard Travel Rewards VISA and United Mileage Plus VISA are listed as no FX fee - just like the Capital One card 0% FX fee. For example Bank Americard Travel Rewards VISA is listed as no FX fee, while the other typical BofA cards FX fee is listed as 1% to 3%. I think it's pretty clear in their table that no FX fee = 0% FX fee as shown in the Capital One row.

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Most issuers will have at least 1 or 2 credit cards to offer, where these fees are covered by the issuer.

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The foreign transaction fee is composed of two parts. The first is charged by the credit card network (Visa, MasterCard, etc.) while the other part is imposed by the issuer (Citibank, Chase, etc.). Visa and MasterCard both charge a fee of 1%. Regardless of the type of credit card, this fee is applied to all transactions. Depending on the credit card you use, some issuers will choose to add a charge on top of this fee - usually between 2% and 3% - while others will not add anything and even go as far as absorbing the network’s fee, so that you don’t have to pay anything.

[Meadbh]

Might it be relevant that OldPro lives in Canada, while audreyh1 lives in the US? I am too lazy to research this, but they may be comparing apples and oranges.

[audreyh1]

We are specifically talking about US issued credit cards.

[Meadbh]

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Originally Posted by audreyh1 We are specifically talking about US issued credit cards.

I'm sorry, but that was not clear to me. The $ in the thread title could also refer to Canadian or Australian dollars.

[Bestwifeever]

The OP is in South Carolina--probably wants info re converting US$

[Sunset]

I have found this discussion valuable, even the nitpicking parts as it has revealed to me how stupid I was when I was 20 in Greece.

I hope to visit much more of Europe so this is of interest to me.

[Meadbh]

If the intention was to discuss US$ only, perhaps the moderators can change the name of the thread to

Converting US $ to Euros

Otherwise, all dollars are fair game.

[audreyh1]

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Originally Posted by Meadbh I'm sorry, but that was not clear to me. The $ in the thread title could also refer to Canadian or Australian dollars.

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Originally Posted by Meadbh If the intention was to discuss US$ only, perhaps the moderators can change the name of the thread to Converting US $ to Euros Otherwise, all dollars are fair game.

The title of the thread may have a more general discussion of converting $ to Euros. The detour about credit cards which do or do not really have 0% foreign transaction fees was specifically talking about US issued credit cards.

[Alan]

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Originally Posted by Meadbh If the intention was to discuss US$ only, perhaps the moderators can change the name of the thread to Converting US $ to Euros Otherwise, all dollars are fair game.

The OP is clearly in the US so it is fair to assume that it was USD he asked about.

[Bestwifeever]

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Originally Posted by Sunset I have found this discussion valuable, even the nitpicking parts as it has revealed to me how stupid I was when I was 20 in Greece. I hope to visit much more of Europe so this is of interest to me.

+1. It might be valuable re whatever currency one is converting from and to.

Thinking about those stacks of travelers checks (to be clear in US dollars) in the late 70s and converting from francs to marks to lira and back again and never knowing how much anything cost or what the exchange rate was, never mind the fees. Good times. And just this fall watching DH converting US $100 into quetzales at an airport currency exchange and biting my tongue from calling him an idiot--so it cost an extra $7, oh well.

[audreyh1]

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Originally Posted by Bestwifeever +1. It might be valuable re whatever currency one is converting from and to. Thinking about those stacks of travelers checks (to be clear in US dollars) in the late 70s and converting from francs to marks to lira and back again and never knowing how much anything cost or what the exchange rate was, never mind the fees. Good times. And just this fall watching DH converting US $100 into quetzales at an airport currency exchange and biting my tongue from calling him an idiot--so it cost an extra $7, oh well.

But in the 90s I used to be able to go to my local AAA office, buy American Express Travelers checks, then find a local American Express office and get a quite decent local exchange rate. Keep track of my checks as cashed so that if something happened to the checks I would get reimbursed. I felt quite secure doing it this way.

Long gone now.

P.S. I still remember a million lira hotel bill. Fortunately that was a company expense.

[audreyh1]

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Originally Posted by OldPro I cannot imagine there is a law that says a bank must say they charge a fee that is in fact charged by Visa, not by the bank. Such a law/regulation would indeed mean they could not advertise, no foreign transaction fees if they passed it on. But such a law/regulation would make no sense legally. I remain sceptical.

Some legal history on why things are stated the way they are in the US now.

US Litigation and Credit Card Foreign Transaction Fees

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A recently settled class-action lawsuit illuminated the fact that for about 10 years, foreign transaction fees ranging from 1 percent to 3 percent of a purchase were passed on to consumers without their knowledge. These transaction fees included an undisclosed service fee by the issuing bank in addition to MasterCard’s or Visa’s 1 percent fee. The crux of the lawsuit is that these fees were levied without cardholders’ knowledge (they weren’t itemized on the statements), and that these three credit card companies engaged in price-fixing. The suit also charges that Visa and MasterCard inflated their base exchange rates before applying the fee. They didn’t tell consumers the exchange rate they used when converting foreign currency into dollars, and the rate they charged was usually higher than the best available rate at the time of purchase. About five years ago, “the bank fees started to happen all of a sudden,” says Robert D. Manning, a professor of humanities at the Rochester Institute of Technology and the author of “Credit Card Nation.” As a result of the lawsuit, card companies now have to disclose on the statement what they charge in transaction fees and how they determine the exchange rate. They are not required to roll back the fees, however, and in most cases the companies voluntarily began disclosing fees once the suit was filed. “The [issuing bank’s] fee used to be a pretty standard 1 percent, then it rose to 2 percent pretty much across the board,” Manning added. “The credit card industry knows that consumers focus on interest rates, so they’ve been tacking on all these fees.”

Hidden credit card 'currency conversion fees' for overseas purchases may be returned

Not quite so recent - that was 2006. But still it drives how things are presented today by US issuing banks and why fees appear fairly uniform in how they are presented.

[HawkeyeNFO]

xe.com

Check it daily as it is accurate to the minute, and due to living in Europe but receiving pay in dollars. Credit cards with no forex fee are easy to find these days, but I'll have to reopen my Schwab account. USAA is better than most at just 1% for ATM withdrawals, but zero is even better!

[audreyh1]

part II...

Additional requirements were imposed by the Credit Card Accountability, Responsibility and Disclosure Act of 2009. I believe US cards are now required to disclose the foreign transaction fees as specific line items on statements. And a common practice is to bundle the VISA/Mastercard conversion fee into their total conversion fee.

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Once a nasty surprise for international travelers, foreign transaction fees used to add a hefty toll to credit card bills. But thanks to the Credit Card Accountability, Responsibility and Disclosure Act of 2009, issuers must break down those fees in clear, accessible language, giving travelers advance notice of the real cost of making purchases overseas. Card companies are now required to show foreign exchange fees as a separate line item on a credit card (when you apply)," says Chris McGinnis, director of the Travel Skills Group in San Francisco. "In the past, the fees were not shown explicitly on statements, but travelers still paid them (because) the fee was bundled into the exchange rate, so it was not noticed."

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Issuer fees typically come in two varieties. Some credit card companies charge a flat fee (usually about $5) per foreign transaction. But the more common practice is to charge between 1 percent and 3 percent of the total purchase. That fee can go up somewhat if the issuer uses the Visa or MasterCard network, which charges up to 1 percent per transaction. A number of issuers build the Visa/MasterCard fee into their total foreign transaction fee. Whichever fee structure the issuer uses, customers will see the total foreign transaction fee in the terms and conditions associated with their accounts.

That's certainly how Bank of America does it. DH accidentally used the wrong BofA VISA when ordering something from Canada (forgetting that it was CAD not USD!) And the 3% fee appears as a separate line item in our statement as well as the CAD and USD values. However no such line item appears in any of my credit cards with no foreign transaction fee, including my BofA Travel Rewards Card.

[Meadbh]

"We found that while the initial currency exchange rate is done at market rates, your rate then includes an additional mark-up which can be as high as 9%! The mark-up is then blended into the exchange rate you see on your receipt, so consumers have little chance of figuring out how much the the bank or exchange bureau actually charged."

"Unfortunately, none of Canada’s largest credit card companies (RBC, TD, CIBC, BMO, Scotia, Capital One, Canadian Tire or PC Bank) offer a credit card without a foreign transaction fee. They all charge a foreign transaction fee of 2.5%, on top of the exchange rate set by Visa or Mastercard. They do the same for debit cards either when making a purchase at a U.S. retailer or from an ATM."

Currency exchange rate fees the banks are hiding from you

[Gone4Good]

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Originally Posted by OldPro My question to you Gone4Good is how you are finding it if you are using a card that is not a true 'chip and pin' card.

Hi OldPro,
I have a chip & pin card through Pen Fed. I don't think I've used it in over a year. In fact, its been so long since I've needed it that if I find myself at some out of the way un-manned kiosk in the middle of nowhere where my other cards won't work I'm half certain Pen Fed would decline the charge as fraudulent anyway.

Fortunately, that hasn't been an issue as everywhere I've gone recently accepts my chip and sig card no questions asked. I have a theory that Europe has just decided to honor the U.S.'s lack of security features because, hell, it's the American bank's problem if the transaction is fraudulent anyway.

[Gone4Good]

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Originally Posted by audreyh1 My experience with the Schwab Bank debit VISA is that the date of the ATM withdrawal determines the VISA rate I get. Of course VISA sets this based on the prior day's higher interbank exchange rate. But there is no delay to post the transaction like there is for my credit cards. It shows up immediately in my account, and does not change.

That's probably true. I've typically not monitored the ATM transactions as closely because I really don't pay for anything in cash unless I have to. So my comment may not (or may) apply to cash withdrawals. It definitely applies to my Chase credit card purchases, though.

[Gone4Good]

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Originally Posted by audreyh1 But in the 90s I used to be able to go to my local AAA office, buy American Express Travelers checks, then find a local American Express office and get a quite decent local exchange rate. Keep track of my checks as cashed so that if something happened to the checks I would get reimbursed. I felt quite secure doing it this way. Long gone now. P.S. I still remember a million lira hotel bill. Fortunately that was a company expense.

Wow, really? I'd have though that AmEx would have totally abused folks back then. I mean, hell, folks are still taking 20% on each side of travelers FX exchange today when there are so many lower cost options around. I'm stunned to hear that AmEx wasn't taking at least as much when there were far fewer alternatives.

P.S. If you want hotel bills denominated in millions you can always head to Vietnam (which I'd recommend anyways) where the the rate is around 22,000 to 1.

[audreyh1]

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Originally Posted by Gone4Good Wow, really? I'd have though that AmEx would have totally abused folks back then. I mean, hell, folks are still taking 20% on each side of travelers FX exchange today when there are so many lower cost options around. I'm stunned to hear that AmEx wasn't taking at least as much when there were far fewer alternatives.

They offered lots and lots of card member perks back then.