ATM or BofA foreign currency purchase

[Yipper]

We’re headed to Italy for a few weeks in September and will be paying for one of our stays in cash - around €600. I’m trying to figure out if the Bank of America foreign currency purchase is the better option to use vs. local ATMs once we arrive.

I have two credit cards that don’t charge any foreign transaction fees but my one and only debit sure does.

Other than that I don’t expect to need much cash but this one is vexing me.

Thoughts? Ideas?

 

[PaunchyPirate]

For a large purchase like that, I'd probably buy the euros from your local bank before hand just to have it done. Unless that means carrying that sum around for a while before I would get to the place where it was needed. I'd rather not sit on that much cash while traveling from city to city, hotel to hotel, etc.

For day-to-day spending when I travel abroad, I just use an ATM. But my ATM transactions are reimbursed by my bank (Schwab Bank).

You probably have time to open a "travel" bank account somewhere that issues a debit card with no transaction fees. Travel bank accounts can be nice to keep the funds separated from your primary bank account to minimize fraud. I keep less than $100 in my Schwab Bank account until I travel. Then I fund it with enough money for spending and emergency spending while abroad. Then I empty it back out when I get home. The account pays virtually no interest.

 

[cathy63]

Check the max daily cash limits on your various cards. You may find that it's hard to get €600 from an ATM or you have to do it over multiple days. I ran into this once in Switzerland where my card kept getting rejected and it took me a while to figure out that after considering the exchange rate, I was exceeding the daily limit by about $10.

 

[brett]

We use in country ATM's. Plus some backup cash that we can exchange.

Does not really matter for a short visit but more often than not we are in county for 7-9 weeks at a time.

IF we do want a little local currency for our arrival we will buy it at a local foreign exchange store. Much better rates than the bank or the auto club AND usually a much better choice of denominations. Just depends if you have any nearby where you live.

We travel with a number of cards and always have a number of ways of accessing cash should one not work. While in Morocco this past May one card worked once, and it was not recognized at the same bank the next time. This is why we each have at least one backup card that works.

 

[Lsbcal]

If you can get a debit card that has no foreign transaction fees I'd do that. We have the Schwab 1 debit card and also a First Tech debit card. We put plenty of cash into the account before we leave the US. Most transactions are on our Chase Sapphire Visa.

In Italy use a bank ATM. The Schwab 1 will allow only $500 per transaction but you can do 2 of these in a day. If you check with your hotel as I recently did via email, not all the cash is required on check-in.

 

[Yipper]

Thanks everyone. I was about to pull the trigger on a purchase of Euros via BoaA but decided to ask the other party if we can transact via PayPal or similar and they said that was actually preferred. Problem solved.

One question though for the Fidelity account people. Does their debit incur FTFs does anyone know from experience?

Update: I looked at the debit card fees for a Fidelity Cash Management Account and it looks like they charge a 1% foreign transaction fee.

 

[Scrapr]

One money transfer possibility is Wise (formerly Transfer wise) It's pretty easy to fund & transfer funds. Low cost. I used it a lot when my wife & I were getting married last year in Scotland.

 

[tulak]

The Fidelity debit card only charges fees on purchases, not ATM withdrawals.

I have a Schwab account solely for travel. Works great.

 

[Lorenzo]

I have a Schwab account solely for travel. Works great.

Ditto. I fund the account before each trip. If the card is hacked, such as though a skimmer device on the ATM card slot, no more than that balance is at risk. As much as I try to avoid dodgy-looking ATMs, one never knows.

 

[Yipper]

okay, thanks for the clarification on the FTFs… just setup a CMA and ordered debit cards.

 

[OldShooter]

FWIW I have successfully negotiated travel arranger prices down by promising to bring US$ cash and pay on arrival. Most times, the recipient has specified new or like-new $100 bills. I suppose this is to eliminate counterfeit bills. Once I had a $100 bill rejected by the recipient because there was a small fold on one corner. Anticipating comments, I am not at all uncomfortable carrying several thousand in cash, though I try to get rid of it as soon after arrival as possible.

 

[fosterscik]

The other problem not mentioned here is that credit cards start charging interest for the "cash advance" as soon as you use an ATM. We use a Schwab debit card exclusively to get cash and $500/day max withdrawal has not been a significant handicap for us. The bigger problem has been when the ATM won't deliver reasonable amounts of cash per withdrawal (so they can drive up fees). Mexico and Indonesia come to mind... Not a problem with a Schwab account as they reimburse all fees.
FYI we opened a Schwab brokerage account with $1,000 and have never traded there. It is sitting in a SCHA etf. We use a Schwab checking account to pay all our bills an transfer funds there as necessary to maintain a (small) positive balance

 

[Aerides]

The other problem not mentioned here is that credit cards start charging interest for the "cash advance" as soon as you use an ATM.

Correct, CC's have zero grace period on cash advances.

 

[Alan]

One money transfer possibility is Wise (formerly Transfer wise) It's pretty easy to fund & transfer funds. Low cost. I used it a lot when my wife & I were getting married last year in Scotland.

Wise is a good option, I have used it for a good few years now and have accounts in both USD and GBP, and I know that a EUR account is available as well. You can have a debit card for each account if you like. This is what our daughter did when she moved to England a couple of years ago, arrived in England with a debit card that she could use in shops or at ATMs to get cash.

 

[marko]

Most banks, BoA included, have agreements with certain European banks where you can withdraw from ATMs with no fee via debit card. You can check it online which bank in Italy. In France it was BNP Paribas.

Having said that I'd still have a few hundred euros on hand for cabs etc upon your arrival.

 

[audreyh1]

The last time (long time ago) I bought euros from BofA they charged me 7% over the going exchange rate. That’s extremely steep. I quickly figured out free foreign transaction fee ATM cards and used those subsequently.

OK, I see you’ve found alternatives.

We visit Europe frequently enough that we bring home some Euros. This last 6 week trip we went ahead and made one withdrawal, but we didn’t even spend half the cash we took, so brought home more than usual. It’s getting to where you use very little cash in Europe. We really only used it for housekeeping tips and sometimes we payed cash for something in a grocery store to get change.

It’s also getting harder to find bank ATMs in Europe. Some kind of consolidation going on in many countries/cities and they’ve farmed out ATM support to third party networks. Many ATMs have disappeared.

Thanks everyone. I was about to pull the trigger on a purchase of Euros via BoaA but decided to ask the other party if we can transact via PayPal or similar and they said that was actually preferred. Problem solved.

One question though for the Fidelity account people. Does their debit incur FTFs does anyone know from experience?

Update: I looked at the debit card fees for a Fidelity Cash Management Account and it looks like they charge a 1% foreign transaction fee.

I’m glad they are OK with the PayPal transaction that’s much better overall.

The Fidelity debit card is no fee for ATM withdrawals and reimburses ATM fees. If you use it on a store or at a ticket kiosk yes they charge 1%.

 

[audreyh1]

Most banks, BoA included, have agreements with certain European banks where you can withdraw from ATMs with no fee via debit card. You can check it online which bank in Italy. In France it was BNP Paribas.

Having said that I'd still have a few hundred euros on hand for cabs etc upon your arrival.

In the old days you still had to pay $5 fee even somehow finding a cooperating bank which I never did. I gave up on BofA and got the friendlier ATM cards.

Major city cabs take credit cards/Tap-to-pay these days if you are not using Uber.

 

[Drake3287]

As someone who goes to Italy yearly and also has BofA, I always order foreign currency from the bank before I go and the service fees I pay for it are only a few bucks, not enough to worry about compared to paying ATM fees let alone looking for ATM's. I've also had to pay a few short term rental with cash, not a huge deal.

When carrying a lot of cash I always have my wife carry half just in case something happens to my wallet or her purse. I also tend to use my BofA Travel reward Visa card for most of my purchases. The foreign currency is more of a backup and small purchases. It's also easy to redeposit the foreign currency back into my account when I get home.

When traveling internationally, always have a plan B in case something happens to a credit card.

 

[tulak]

I’ve been averaging 2-3 trips to Europe a year and stopped carrying cash since covid.

It wasn’t until Croatia this year that I had to get cash, and quite a bit of it.

Otherwise Apple Pay/CC has worked mostly everywhere and places where it doesn’t, I avoid if I don’t have cash.

 

[donheff]

On my bike trips, tips for the guides are in local currency and on some we stay in pretty remote locations where it is inconvenient to find an ATM. Several times a fellow traveler or two have been franticly trying to find an ATM at the end of the trip. Si I always get Euros or other local currency before I leave. I got used to ordering Euros from Citibank before traveling. We were in the Private Bank because of DW's law firm and got decent exchange rates. But they eventually caught on that she is retired so we got booted in with the hoi polloi recently. I am not sure what the rate is now.

 

[Drake3287]

The cash vs credit card question has been around for years. To me, what happens if your credit card gets compromised or you lose a wallet or purse?, you're dead in the water half way around the world. Besides having my wife carry half our cash as a precaution, I also make sure we're both carrying a credit card that the other isn't also carrying. Literally thousands of people each year have their wallets or purse stolen or lost in Europe each year. Walk by the American Consulate in Rome on any given morning and you'll see a long line of American's waiting to report their stolen Passports and ID.

 

[nwsteve]

One money transfer possibility is Wise (formerly Transfer wise) It's pretty easy to fund & transfer funds. Low cost. I used it a lot when my wife & I were getting married last year in Scotland.

I used WIZ to pay our guide in Malta. She actually preferred to Paypal which charged her more than Wiz which is quite reasonable. Wiz offers a wide choice in currencies so a good option to have for future travels, especially if a fun of local guides

 

[Yipper]

I think we're all set now and thanks again to this community for the knowledge and willingness to share it. I have setup a Cash Management account with Fidelity and have ordered debit cards for me and DW. I can shuffle some balance between my brokerage and the CMA as needed to keep the balance barely more than I actually expect to need. I'd only use this debit card for ATM withdrawals to get a few euros for walking around money which as others have mentioned is actually pretty rare these days in my experience.

Good news that services like PayPal and a few others are global which is nice too. I really wasn't looking forward to carrying ~600 euros around for a couple of days so things have worked out nicely.

 

[luckydude]

Speaking from personal experience, I think buying foreign currency from a stateside bank is a very bad deal as exchange rate is terrible (but great for the bank).

Same thing with sending money via PayPal to convert to a foreign currency. The exchange rate is 3-4% worse than spot rate and you get another haircut from the credit card company if you are using it to fund your PayPal.

Using local ATM is always the way to go for me. TBH 600 euros isn’t really a lot of money to worry about carrying around. I was just in Ireland last month and at one point had about 2000 euros in my wallet (I like to use cash) and never had an issue or felt unsafe. YMMV of course

 

[audreyh1]

You can pay with Euros through PayPal and also use a credit card with no foreign transaction fee.