Dynamic Currency Conversion… Just Say No!

by Wayne Jacobson | Sep 13, 2016 | Blog, Essential Travel Resources

Dynamic Currency Conversion… Just Say No!

 

Have you ever been asked “Would you like that in dollars or euros?”  Or perhaps a “yes” or “no” box pops up on the point of sale machine asking if you would like to choose your home currency.  This is called Dynamic Currency Conversion or DCC and it is becoming the norm in many countries worldwide.  At first, it sounds like a good idea, but for the consumer it is very expensive and should be avoided at all costs!

 

On the other hand, it is very good for the merchant because they make a huge commission for offering this service.  In most cases the cardholder will be hit with a 7% markup above the current bank exchange rate. Take a look at this UK MasterCard website promoting DCC for its merchants.  Here you can clearly see that DCC benefits the merchant, and MasterCard makes up some lame reasons as to how it benefits customers.

 

photo credit: http://howtogeek.com

Often the choice of accepting DCC is presented in a matter-of-fact manner, giving no indication that it is a bad (or good) idea.  But don’t blame the cashier, unless they are the owner of the shop, they are probably required to offer the pitch in a certain manner and tone of voice, such as, “Would you like that in dollars or sterling?”  This, coupled with a stately British accent is bound to sway some travelers to accept the idea.  However, it is never a good idea to convert your transaction with DCC into your home currency.

 

With today’s regulations, merchants are required to notify the cardholder that DCC is available and there is a choice.  Originally, the merchant was not required to notify the cardholder that DCC was being applied.  The customers would simply make the purchase, get a sales receipt in the local currency and the DCC would be applied afterward in the “back office.”  The cardholder would not know this had occurred until they received their credit card statement. Initiated by Visa and MasterCard, this practice is now forbidden and all credit card companies impose penalties on merchants who fail to comply.

 

In order to get around the back-office DCC regulation, merchants will sometimes automatically select DCC without the cardholder having a chance to accept or deny.  The conversion will show on the sales slip and an unsuspecting customer may walk out the door none the wiser.  If questioned by the cardholder, the cashier may claim their point of sale (POS) machine automatically converts to the card’s home currency.  This too is incorrect and if detected, the cardholder should immediately request that the sale be reversed or voided and run again in the local currency.  However, this could be difficult, especially if working against a language barrier.

Tips to help you make the best of your travel dollar

– Notify your bank and credit card company when you will be traveling outside your normal spending area.  This is important when traveling at home or abroad. Most banks will put a travel exception on the account so that your spending will be approved while traveling.  If you do not notify your bank or credit card company, you will be denied access to your funds.

– Always refuse DCC, no matter how tempting the comfort of working in your home currency. Following this simple rule will cut at least 5-7% off your purchase before ever leaving the checkout counter.  DCC in not ever required so don’t feel obligated to accept it, even if the merchant selects DCC without your knowledge. If this happens, the cardholder should immediately request that the sale be reversed or voided and run again in the local currency.  

 

– Use a credit card that has no foreign transaction fees.  Most credit cards issued in the USA charge fees up to 3% for transactions originating outside the USA.  This applies to both point of sales and online transactions.  So, it only makes sense to find a credit card that carries no fees for foreign transactions. I’ve found that many American Express cards have no foreign transaction fees.  I use the Barclay Arrival Plus World Elite MasterCard which offers no foreign transaction fees, true Chip and Pin capabilities, and lots of benefits in the form of travel rewards.

 

– Don’t use non-bank ATM’s.  You’ll often find these stand-alone machines in small convenience stores, at gas stations and roadside auto stops. These machines are owned and controlled by the local merchant, not a bank.  The owners of these ATM’s are free to mask the DCC options any way they like, and you can bet it will be to their liking, not yours.  Steer clear of these machines, but if you must use them, be sure to read all the screens carefully and opt out of DCC.  Sometimes you will see messages such as “lock-in your rate” or “guarantee your conversion”. Others may post messages such as “press yes for dollars”.  Double check everything and always opt out of anything that looks like DCC.  Alternatively, you can always cancel the entire transaction before you enter your final “yes.”

 

– Always check your printed receipt.  Somewhere at the bottom you’ll find the cost in the local currency.  If USD is mentioned anywhere on the receipt, then you’ve been had by the DCC con game.

 

– Download a currency converter app to get up-to-the-minute exchange rates.  I like an app put out by OANDA.  It is available for Apple and Android.  Look for the name “Currency.”

Summary

Dynamic Currency Conversion (DCC) is a service offered to credit cardholders that offers to convert a foreign transaction at the point of sale into the home currency of the cardholder.  This is never a good idea for the consumer because it comes with inflated exchange rates that benefit the merchant.  An unsuspecting cardholder can lose up to 7% by opting in to this feature. Since DCC works against the purchaser, never say you would like your purchases to be converted to dollars.

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If you found this article informative, please share it with your friends, family, coworkers and associates. If you have something to add, just leave a comment in the box below.

 

Do you want to learn more about traveling to Europe? There is a wealth of information and special discount pricing on my tours at https://davidmcguffin.com/.

 

David McGuffin is Founder and CEO of David McGuffin’s Exploring Europe, Inc., based in Middleburg, Florida. You can connect with him on  Twitter,  Facebook,  Google+,  LinkedIn and YouTube. David spends his time in Europe organizing and leading small group and independent tours to European destinations. In business since 2001, David has provided exceptional travel opportunities to several thousand satisfied customers. You can find out more about David and his European tours at his website, https://davidmcguffin.com.

Chip and Pin Credit Cards

by Wayne Jacobson | Sep 13, 2016 | Blog, Essential Travel Resources

Chip and Pin Credit Cards

 

The USA has long been a worldwide holdout on buying into the Chip and Pin technology.  I subscribe to International Travel News, a longtime publication for savvy international travelers, and Chip and Pin cards have been a hot topic of discussion for at least the last ten years.  The Chip and Pin card is one element of a broad technological standard known as EMV Cards.  EMV stands for Europay, MasterCard and Visa, the three founding companies that originally defined the standard. 

 

Since the 1970’s credit cards have had a black magnetic strip on the back to store electronic data (in a not-so-secure form) about the cardholder. If you are interested, there is a good article charting the progress from Zip-Zap machines to the modern EMV technology at Creditcards.com.  This same magnetic strip is still in use on US credit and debit cards today.  Swiping your card to make a purchase has been the norm for years and has served us well, unless you are an international traveler.

 

I first realized my magnetic-strip credit card was second-rate when I attempted to purchase a booklet of Métro tickets from an automated machine in Paris.  My fancy and supposedly high tech credit card was denied right then and there. That was back in 2005!  Since then, I’ve encountered the same problem at European toll roads, unmanned gas stations and more recently, when attempting to rent a bike in Dublin.  To me, it is irritating that as citizens of the biggest and most technologically advanced nation in the world we cannot get a credit card to work in another country.  I could rant for hours, but let me press on to what this means for you and your international travel.

Change is not so bad

This new EMV technology has caused a bit of anxiety among American travelers.  Most American credit card companies have issued new credit cards containing imbedded chips (IC) over the past few months. As with any change, there is a learning curve, because these new cards require a different procedure than our old magnetic strip cards. But don’t worry, the bottom line is that 99% of the time your new chip-imbedded card will function exactly as your old magnetic strip card has for years.  As long as there is a sales clerk, a cashier or attendant on duty you’ll have no problem.

How a Chip and Pin card works 

The credit card readers (point-of-sales machines) in Europe use the Chip and Pin verification method. When making a purchase, the cardholder inserts the card into a slot in the card reader payment machine.  While the card is still in the slot a PIN is entered.  The imbedded chip verifies the PIN and the transaction, and the cardholder goes away without a receipt. Next time you are in Europe notice the locals will dip their card, punch in their PIN and be on their way in seconds.  

US Chip Cards are different

The new EMV cards we are receiving in the USA are actually chip and signature cards and require no PIN at all to function.  When using it to make payment at home or in Europe, you’ll insert the card in the slot and leave it there until directed to remove it on the payment screen. You’ll have to stand there and wait until the clerk gives you the sales slip to sign and then presents you with a duplicated copy.  As mentioned, the chip and signature cards work just as well as the old magnetic strip cards anywhere there is a cashier, at home or in Europe. The only time you’ll run into problems and maybe have your card denied is at unattended kiosks. 

How to use your US chip card in Europe

It is quite possible that a payment machine might ask for a PIN.  Credit card companies do not routinely issue PIN’s, but you usually can have one issued if you ask.  This requires jumping through some hoops and listening to lots of disclaimers from your credit card company, but the bottom line is you should be able to get a PIN.  Your best bet is to give them a call, and be sure to do this with plenty of time to receive the PIN by mail.  Also, make sure you understand the fee schedule and interest rates associated with a PIN transaction. Finally, when making initial contact with your credit card company it will help to tell them you want a PIN for cash advances just to simplify the process of getting one issued.

 

Even with a PIN, you might run into some problems. Cards issued in the USA are not set up to handle “offline” transactions.  These are transactions that do not immediately validate with a real-time connection to the bank.  Occasionally, I still encounter this problem when attempting to purchase fuel at unmanned stations and at French toll plazas.  In this case, I always have a supply of coins and bank notes available to complete the purchase. I can think of few things worse that getting stranded in a busy toll plaza and not being able to make payment!

Dynamic Currency Conversion (DCC) is a service offered to credit cardholders that offers to convert a foreign transaction at the point of sale into the home currency of the cardholder.  This is never a good idea for the consumer because it comes with inflated exchange rates that benefit the merchant.  An unsuspecting cardholder can lose up to 7% by opting in to this feature. Since DCC works against the purchaser, never say you would like your purchases to be converted to dollars. (read more about this in my article: Dynamic Currency Conversion: Just Say No!).

Want an authentic Chip and Pin Card?

If you are a frequent international traveler, or just want to be up to date on the modern EMV technology, there are a few banks the offer Chip and Pin cards.  Most cards have the default authentication as signature and if that fails (or is not available) a PIN is required.  

 

I use the Barclay Arrival Plus World Elite MasterCard which offers Chip and Pin capabilities with signature being the default verification method. The card has served me well in my travels except at a few remote offline gas stations. This card offers great rates, 2x miles that never expire for travel, 40,000 bonus miles at signup and low yearly fees. Additionally, travel miles really build up fast and there are no blackout dates. 

 

In my research I’ve also found that these card providers offer Chip and Pin features designed for international travel:  USAA, Andrews Federal Credit Union, State Department Credit Union.  Perhaps the only true offline Chip and Pin card can be found at the United Nations Federal Credit Union.  You have to jump through some manageable hoops to join but I understand for cardholders this card does the trick even with offline purchases.

Summary

In this article, I discussed that the US has been resistant to Chip and Pin technologies, which sometimes causes traditional magnetic strip credit cards to be declined. The new American credit cards with an imbedded chip are accepted in nearly all locations, but may still require a signature. Depending on your card provider, you may be able to request a pin for your chip-imbedded card. If that fails, I mentioned several card providers that offer Chip and Pin cards designed for international travel.

If you found this article informative, please share it with your friends, family, coworkers and associates. If you have something to add, just leave a comment in the box below.

 

Do you want to learn more about traveling to Europe? There is a wealth of information and special discount pricing on my tours at https://davidmcguffin.com/.

 

David McGuffin is Founder and CEO of David McGuffin’s Exploring Europe, Inc., based in Middleburg, Florida. You can connect with him on  Twitter,  Facebook,  Google+,  LinkedIn and YouTube. David spends his time in Europe organizing and leading small group and independent tours to European destinations. In business since 2001, David has provided exceptional travel opportunities to several thousand satisfied customers. You can find out more about David and his European tours at his website, https://davidmcguffin.com.

Paper or Plastic… Spending Money in Europe

by Wayne Jacobson | Sep 10, 2016 | Blog, Essential Travel Resources

Paper or Plastic… Spending Money in Europe

Europeans tend to use cash for their day-to-day spending much more than the run-of-the-mill American does. In fact, most Europeans carry lots of cash in their pockets on a daily basis.  When it comes to paying for dinner, drinks, coffee, subway and bus tickets, newspapers, theatre tickets and the like, cash is king.  A recent article at PYMNTS.COM suggests that paying with cash in Europe is on the rise.  Last year, there was over 2.2 trillion in European cash transactions and that’s up from the 2015 record of 2.1 trillion.

 

From a cultural perspective, it makes sense for a traveler to blend in and adapt to the local customs, especially if you are looking for an authentic travel experience.  I am a firm believer in trying to “do it the way the locals do” so paying with cash makes perfect sense. If I wanted to “do it like we do back home”, I’d stay back home! 

 

I recall a wonderful lunch at a small roadside café in rural France (you can read about this adventure here) that does not accept credit cards.  I’ve taken my groups to the place for years and get nothing but rave reviews for the food, ambience and atmosphere.  Had I skipped this place the first time because they did not accept plastic, I would have missed out on a wonderful dining experience and friendships that have lasted decades.   

 

How to get CASH so you can live like a local

Using your debit card from your local back home is still the best way to get cash while traveling in Europe.  There are ATM machines (often called Bankomats) everywhere and you treat them just like those in the United States.  Simply insert your card, type in your PIN code and choose the cash amount. The machine makes some noise and then spits out cash in the local currency.   

 

I have written a detailed article on the topic of acquiring local cash for your trip abroad.  In it I discuss everything from buying travelers checks and paper notes at home to charge cards and debit cards.  Be sure to read it before striking out on your next adventure. 

 

How to spend your cash like a local

Having a bit of the local cash in your pocket makes for an easier and sleeker travel experience because you’re not having to worry about where credit cards are accepted or when you might run across an ATM again. So the next time you walk into a bar for a coffee you’ll be able to slap down your coins, drink it and be on your way in no time.

 

 

Get to know the currency, both notes and coins.

Bank NOTES 

Paper currency (notes) are very easy to identify and all European countries.  They all have a number in the corners denoting the value of the note.  To make it even easier, European notes are different sizes and different colors for each denomination.  A €50 note is larger than a €5 note in addition to being a different color.  This holds true no matter whether you’re spending UK sterling, EU euro or any other currency.  Other than it looking like Monopoly money, you should have no trouble working with paper currency.

 

I like to carry a daily supply of banknotes in my front pocket, secured with a money clip.   Each morning I take inventory of my banknotes and load up with what I think I might need to spend during the day.

 

The remainder of my stash of cash (and passport and credit cards) goes in my money belt tucked neatly and safely inside my pants.  Now of course I know this is not living like a local but it does give a peace of mind knowing that in unfamiliar circumstances, I don’t have to worry about my important stuff being taken from me.

 

COINS

You’ll use a lot more coins in Europe than you do here at home. It’s a good idea to do a little homework before your trip and study up on the different coin denominations, colors and sizes.  Here are some hints:

 

I like to lay all the coins out and do a mental and physical quiz each time I arrive in a new country.

Here is how I begin this quiz in the European Union.

 

Here is how I begin this quiz in the United Kingdom.

 

I like to use two pockets to sort out my coins; one for small coins under €1/£1 and another for large coin over €1/£1.

 

Before going into a shop, I take inventory of the coins in my pocket so when the merchant gives me the total, I’ll know if I have enough coins to make the purchase or need to pay will bank notes.

Gone unchecked, coins can be overwhelming.  It is a good idea to use many coins as you can on a daily basis.  

 

After you trip, spend or cash in the coins before leaving the airport.  Since many European coins are high-value, it can be expensive flying home with a pocket full of change.  Before heading home, spend them, trade them in or give them away.

 

Plastic Credit Cards 

Europeans don’t make a distinction between credit cards and debit cards. In fact, I don’t believe I’ve ever had anyone ask “debit or credit”. I tend to use my plastic (credit card) for larger purchases such as hotel bills, airline tickets, car rental and other big ticket items.  It makes perfect sense to use a credit card for online and telephone purchases.  Credit cards also come in handy for purchases at unattended self-service machines in train and bus stations and at those unmanned European gas stations. Unfortunately, you’ll most likely need a chip-and-pin card for these.  See my chip-and-pin card article for more information.

 

 American credit cards work throughout Europe and are widely accepted at major hotels, stores and attractions, especially in tourist-oriented areas.   In smaller towns and mom-and-pop operations credit cards may not be accepted because the merchant must pay the credit card company a hefty fee for the “privilege” of accepting credit cards.  Visa and MasterCard are widely accepted.   The American Express card, although a well-known name in the travel industry, is less widely accepted due to the higher transaction fees the merchants must pay American Express.

Dynamic Currency Conversion (DCC) is a service offered to credit cardholders that offers to convert a foreign transaction at the point of sale into the home currency of the cardholder.  This is never a good idea for the consumer because it comes with inflated exchange rates that benefit the merchant.  An unsuspecting cardholder can lose up to 7% by opting in to this feature. Since DCC works against the purchaser, never say you would like your purchases to be converted to dollars. (read more about this in my article: Dynamic Currency Conversion: Just Say No!).

 

Finally, remember that plastic often places barriers between you and an authentic down-to-earth travel experience.  A small B&B or family-owned restaurant may only accept cash. I was recently in Croatia and many merchants did not accept or highly discouraged credit cards. It was only at American hotels, such as Hilton or Radisson, that credit cards were accepted in the way in which we are accustomed. 

 

Summary

In this article I explained that Europeans use paper a lot more than they do plastic for their day-to-day purchases.  Tourist who want to fit in and immerse themselves in a cultural travel experience should adapt to the local customs and use the local currency, but first they have to get some. Using a debit card at an ATM machine is the cheapest and quickest way to acquire local funds.  Finally, I suggested several ways to spend your cash like a local.

 

If you found this article informative, please share it with your friends, family, coworkers and associates. If you have something to add, just leave a comment in the box below.

 

Do you want to learn more about traveling to Europe? There is a wealth of information and special discount pricing on my tours at https://davidmcguffin.com/.

 

 

David McGuffin is Founder and CEO of David McGuffin’s Exploring Europe, Inc., based in Middleburg, Florida. You can connect with him on  Twitter,  Facebook,  Google+,  LinkedIn and YouTube. David spends his time in Europe organizing and leading small group and independent tours to European destinations. In business since 2001, David has provided exceptional travel opportunities to several thousand satisfied customers. You can find out more about David and his European tours at his website, https://davidmcguffin.com.

Show Me The Money – How to get local CASH for your trip abroad

by Wayne Jacobson | Sep 6, 2016 | Blog, Essential Travel Resources

Show Me The Money – How to get local CASH for your trip abroad.

In the USA, I think nothing of going into a convenience store, picking up a soda and a snack and paying the $5 bill with my debit card.  In fact, I seldom use CASH to pay for anything in the USA.  Europeans, on the other hand, tend to pay for all minor purchases with CASH. Actually, you’ll be hard pressed to find a merchant in Europe that will accept a credit or debit card for small purchases under $30 USD.  I am a firm believer in embracing the culture, customs and traditions of the countries I visit so I always default to the local customs when it comes to spending money.  With this in mind, you are always going to need cold hard CASH, the local currency, when making a small purchase.

There are many places where CASH is required in Europe.  Paying for drinks, snacks, an ice cream, a coffee, entrance fees, subway tickets, or even “splitting the bill” at lunch will require CASH.  In this article, I’ll discuss a few methods to get the CASH you’ll need for your travels and suggest that a debit card and ATM are, hands down, the best choice.

Travelers Checks – Don’t Do It!

Once upon a time, travelers checks were the safest and best way to get your hands on the local currency in Europe. Forty years ago, I recall going to the bank with my granddad to purchase American Express travelers checks for my first-ever European adventure.  It was exciting handing over several hundred US dollars in exchange for a custom wallet filled with travelers checks.  I was even more excited when I walked into the American Express Office for the first time in Venice, spoke to a nice young lady in English and traded my travelers check for Italian Lira. 

That’s all different today.  I just did a quick search at the American Express website (http://www.americanexpress.com/us/content/prepaid/travelers-cheques/service-center.html)  for locations in my hometown to purchase AMEX Travelers Checks. Only three locations popped up and they were all banks.  Even worse, my search for exchange locations in Venice, Italy only returned five locations, three banks and two Travelex kiosks.  All five are known to give the poorest of the poor exchange rates. 

Traveler’s checks offer the poorest return on your investment.  Exchanging them for 

the local currency will always incur a fee and inflated exchange rates.  These are often hidden in the advertisement and promotions seen at the exchange kiosks.  I’ve done the calculations many times while waiting for a client to exchange travelers checks for cash. In every instance, after comparing the actual transaction receipt to the advertisement, there has been a discrepancy often costing 5%-7% more than the already expected dismal exchange rate.

I’m sure by now you realize that I’m not a big fan of travelers checks.   Given that, very few merchants will even accept them coupled with the high exchange rates. I strongly recommend that you use one of the following methods to acquire CASH when traveling abroad.   If you’re determined to purchase travelers checks, just in case, I suggest starting with the American Express site mentioned above or ask at your local bank.

American or Canadian Dollars – Not A Good Idea!

Striking off on a trip with hundreds of dollars’ cash tucked away in your wallet or money belt is not really a good idea.   With that said, I do carry a few US dollars in my moneybelt if for no other reason than to have some when I arrive back home in the USA.   Additionally, it gives a bit of comfort knowing that in a pinch I can pull out a few US dollars and maybe have it accepted as a form of payment.   But usually the merchant will accept US dollars only as a souvenir to be placed on the wall in their place of business. Ha!

There was a time when US dollars were accepted all over the world, but now with the dollar’s weak value, especially in Europe, needlessly carrying them around makes little sense.   And from a practical standpoint, why take the risk of carrying lots of CASH and perhaps having it stolen.  

 It is possible to exchange your US dollars for the local currency at all airports and many major European cities.  Travelex and MoneyCorp along with reputable independent European vendors are big players in this industry and rightly so… they make big bucks exchanging one currency for another.  I suggest leaving your hard earned US dollars at home and get your CASH in Europe.

Buying Foreign Currency Before Your Trip– You’ll Lose!

It is possible to purchase Euros, Sterling or any foreign currency before you leave home.  Your local bank and several online agencies will be happy to sell you any foreign currency for a fee, of course.  One advantage of getting your foreign currency before traveling is simply for convenience. You don’t have to worry about it when you arrive at your destination.  But that’s the only advantage!  Ordering the actual foreign cash is big business and the banks and exchange agencies charge high exchange rates and exorbitant fees.   

Recently, I conducted an online search in which I wanted to order €100 cash and have it shipped to my home address.  The interbank exchange rate on this date (September 2, 2016) was listed as  €100 = $1.12 at http://www.oanda.com.

In the chart below, I have calculated the mark-up percentage based on picking the cash up at your local bank (not possible with Travelex) and having it shipped to your home via first-class mail.  Of course, the “% mark-up/shipping” will go down if you order more cash in one shipping, but it will never be less than the mark-up without shipping.

Pre-Paid Debit/ATM Cards – Only If You Are Under Age 18!

Prepaid debit cards are available everywhere!  Go to any Walmart, Walgreens, Target or even the neighborhood gas station and you will see displays for these seemingly savvy debit cards. They all promise basically the same thing: the convenience of a debit card without age restrictions and a credit check. Simply preload the card with cash and use it almost anywhere a credit or debit card is accepted.

All of this sounds smart, but there are some drawbacks that could cost you a whole lot of money. All of these cards come loaded with fine-print contracts imposing charges and fees for each use. There are often fees associated with each ATM withdrawal, each credit transaction, each reload of funds and even each balance inquiry. Furthermore, the issuing bank will charge a markup percentage for each transaction made in a foreign country similar to the Travelex transactions mentioned in the above paragraph. With all this negative cash flow, what makes the card appealing for the European traveler?

A prepaid debit card may be the logical choice for a student under the age of 18 traveling to Europe. Most financial institutions will not issue a true debit card to persons under 18 years of age. Under 18s are usually issued an ATM card instead. These ATM cards do not carry the VISA or MASTERCARD logo and always draw funds from a savings account, not a checking account. Anyone holding such a card will get to Europe and find it will not work because ATM machines in Europe only accept debit cards with VISA or MASTERCARD logos, have a four-digit PIN number associated with it and draws funds from a checking account.

Cash Advance On Your Credit Card – Only in An Emergency!

A cash advance is a service available on most credit cards That allows you to walk into a bank or use an ATM to get local currency cash.   There is a limit to the amount of cash you can receive and it usually is the spending limit on your credit card. This is OK in an emergency situation, say if you have exhausted your bank account and need funds to get you home.  But for most situations it is a very bad idea.   All credit card companies advertise a more expensive interest rate for cash withdrawals than for purchases.   This often can be 10% or more.  My American Express and MasterCard card carries a 14.75% interest rate on purchases and 25.79% interest rate on cash advances. That is outrageous!  Enough said on this subject.

Debit Cards – Your Best Bet!

This is the best way to get cold hard cash while traveling in Europe!  There are ATM machines (often called Bankomats in Europe) everywhere and you treat them just like those here in the United States.  Simply insert your card, type in your PIN code and choose the cash amount. The machine makes some noise and then spits out cash in the currency of that country. 

Before traveling, find out what fees and conversion rates your bank will assess on foreign ATM transactions and purchases.  Often there is an assessment fee based on a percentage of your purchase and a transaction fee of $2-$5 if an ATM withdrawal.  Most banks use the lowest interbank exchange rate (the rate banks use to do business with one another) when calculating your exchange rate on any given day.

I have a good deal with my credit union! On ATM transactions, I receive the lowest interbank rate and no fees.  If using my debit card to make a purchase, I receive the lowest interbank rate and a 1% fee. 

*This is the credit union where I bank in my hometown.  These figures are verified by my bank statements.  As you can see, this credit union have the best rate for withdrawals for an international ATM.  Perhaps other credit unions have the same rates and policies?  I invite your comments. 

Even though this is the best way to get cash while traveling in Europe there is one drawback to using your debit card at ATM machines… the bank that own the ATM may charge a small fee of €2-5 for using their ATM machine. But for the convenience, it is nothing to worry about. To minimize these fees, I suggest making a few large withdrawals instead of a lot of little ones.  Also, check with your bank to see if they have a partner bank overseas. You can often withdraw money from these ATMs at no charge. Many ATM machines in Europe don’t give you a receipt, so don’t worry too much about that either. I make a note of each transaction to compare with my bank records either online or when I return home. There has never been a mistake! 

Points to consider when choosing a debit card:

• Make sure it has a hologram logo (Visa is best). People have had trouble with cards that don’t have the hologram. A lot of the time the cards that don’t have the hologram are only ATM cards and not debit cards. You need a debit card! Contact your bank if you’re not sure what type of card you have.
• Make sure the rear of your card sports one of three logos: PLUS, MAESTRO or CIRRUS.  These are the global cash networks managed by Visa and MasterCard. 
• Often students under the age of eighteen are issued ATM cards by their bank. These often draw money from a savings account. Here in the USA these ATM cards work without a hitch.  But in Europe they seldom work!  Don’t bring such a card to Europe…it will just take up space in your money belt and get you no cash!
• Make photocopies of your debit card as well as your credit card, passport and other important documents. Stick one copy in the bottom of your suitcase or moneybelt and leave another copy at home.
• Try out your debit card at several ATM machines to make sure it works before leaving the country.
• Notify your bank that you will be using your card abroad. Most banks will put a travel exception on the account so that your spending will be approved while traveling.  If you do not notify your bank or credit card company you will be denied access to your funds.

Summary

When traveling to Europe, you will at some point need cash. The best option is to bring a debit card. This can be used at any ATM and incurs the smallest fees. Check with your bank to see if they have an overseas partner. Credit cards can be used as an emergency backup if you don’t have cash. Visa and MasterCard are the most widely accepted. Remember to notify your bank and credit card companies that you will be traveling. Exchanging money or cashing travelers checks is time-consuming and expensive. Avoid these options if possible.

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Do you want to learn more about traveling to Europe? There is a wealth of information and special discount pricing on my tours at https://davidmcguffin.com/.

David McGuffin is Founder and CEO of David McGuffin’s Exploring Europe, Inc., based in Middleburg, Florida. You can connect with him on  Twitter,  Facebook,  Google+,  LinkedIn and YouTube. David spends his time in Europe organizing and leading small group and independent tours to European destinations. In business since 2001, David has provided exceptional travel opportunities to several thousand satisfied customers. You can find out more about David and his European tours at his website, https://davidmcguffin.com.