What's the Best Way to Get Cash and Make Purchases Overseas?
by Wendy Perrin
I was asked that question this morning on WNYC Radio (New York's public radio station, where I'm talking travel on The Brian Lehrer Show every Thursday this month). And a related question recently came in from Perrin Post reader BarbaraammJohnson: "I will be in Northern Ireland, England, and South Africa for 30 days. In the fall, I'm in Poland. What common currency could I take? My first choice is travelers' checks in euros. Second thought would be travelers' checks in British pounds. I don't use ATMs or credit cards."
Barbara's question is a tough one, so I hope other global travelers will weigh in with their opinions (by clicking on "Comments" below). I have to preface my answer by saying that I always use a combo of ATMs and credit cards. Since that's what most travelers do, let me begin with a warning to them:
Find out before leaving home how much your bank will charge you for international ATM withrawals (my bank, J.P. Morgan Chase, charges a whopping $3 per withdrawal plus 3 percent of the amount withdrawn) and also how much your credit card charges for foreign purchases (I prefer to use American Express because it charges 2 percent rather than the 3 percent my MasterCard charges). If you're looking for a bank that does not charge extra for overseas cash withdrawals, Commerce Bank doesn't (at least, it didn't last time I checked, which was about a year ago). If you're looking for a credit card that doesn't charge extra for foreign transactions, Capital One doesn't (again, last time I checked, about a year ago).
Now, on to travelers' checks and Barbara's question:
In the rare cases when I carry travelers' checks in addition to an ATM card and credit cards, I get U.S. dollar checks because after the trip I want to be able to use the leftover checks here in the U.S. without paying a currency exchange fee. Barbara, if you're certain that you won't have checks left over after your trip, then my guess is it's best to carry British-pound travelers' checks to England and Northern Ireland because (1) the pound is their common currency, and (2) since the dollar will likely only get weaker, you're probably better off paying your currency exchange fees sooner rather than later.
As for South Africa and Poland, I'd carry U.S. dollar travelers' checks, since (1) those countries use neither the pound nor the euro, and (2) you'd lose money in only one currency-exchange transaction (the one when you exchange your dollar checks for rand or zloty abroad) rather than in two (there would be two transactions because you'd exchange your dollars for pounds or euros in the U.S., then exchange those pounds or euros for rand or zloty abroad).
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Hi Wendy,
I've recently visited all the countries mentioned except Poland and faced the same situation. I've read all of the travel forums and gotten as many recommendations as there are posts.
For 3% of the amount in question, I decided not to wreck my vacation. Using ATM's world-wide just works well. If I'm at a place that uses my only no access fee or conversion charge ATM, then I use that. Otherwise, I use my regular bank one and pay. I'm not using that much cash anyway so it doesn't amount to that much. Since my bank charges $5 per transaction, I get the most I can get per transaction.
On credit cards, while most banks charge the 3% on credit card transactions, their currency conversion rate is so much better than I usually find for cash conversion, that it helps dilute that fee.
I surely don't like the fees either, but....
Aloha,
Jeff
http://beatofhawaii.com
Posted by: beatofhawaii_com | May 01, 2008 at 02:27 PM
When we went to England in October, I used a small local bank, American Bank, that has only a few branches in south Texas. They only charge $1.00 per transaction outside of their ATM network anywhere in the world! So I got the interbank rate plus $1.00. Can't beat that!
Posted by: tracker1312 | May 01, 2008 at 05:02 PM
WaMu charges 1% and no transaction fee with their free checking accounts for foreign ATM withdrawals. A much better deal than paying $5 each time you need some cash.
The Flying Critic
http://www.flyingcritic.com
Posted by: TheFlyingCritic | May 01, 2008 at 05:15 PM
For credit cards, Capital One is still 0%. For ATMs, open an online checking account at Bank of Internet (refunds up to $8 in foreign ATM fees per month) or Schwab (refunds all ATM fees).
Ken
Posted by: zendurango | May 02, 2008 at 08:05 PM
Don't turn to CapitalOne (or any company) JUST because they have a 0% fee. Extra fees are just ONE factor to consider – a bad customer service experience can make your "savings" on currency conversion and transaction fees seem penny wise and pound foolish. Do your research on more than fees and remember that customer service can (and does) change over time and won’t be noted in the fine print in the changes to your agreement. A company that has served you well in the past may not continue to do so in the future, so periodically do a credit card check-up.
Posted by: travelgal | May 03, 2008 at 11:30 AM
Many brokerages (USB in my case) will not charge you foreign currency fees for using non-US ATM. Don't know if this is true for discount brokerages. USAA issues credit cards with only the 1% fee for the MC organizational conversion fee, no extra 3% tacked on to the purchase. In regards correspondent who wished not to use credit card, I would say only that the consumer protections against non-delivery of purchased products, with loss limit of $50 on a card, makes paying for any advance reservations by other means unnecessarily risky.
Posted by: hoffnung | May 09, 2008 at 01:54 AM