Dedicated to Deposits: Deals, Data, and Discussion
Featured Savings Rates
Featured Accounts

Insights into Foreign Currency Conversion

Sunday, May 30, 2010 - 12:51 PM
Contra Costa Times article offers some tips on the best ways to convert money when you're in Europe. The worst way is traveler's checks. According to the article not even hotels accept them. It was recommended that ATMs be used with a debit card. USAA Bank was mentioned as an option. It does have a 1% foreign transaction fee that applies to withdrawals outside the U.S.
2
Ken TuminKen Tumin5,469 posts since
Nov 29, 2009
Rep Points: 125,077
1. Sunday, May 30, 2010 - 9:48 PM
I live outside the U.S., but access my funds thru U.S. bank accounts, so avoiding the foreign currency fees is an important issue for me... Among the best options for this are the E-Trade checking account and the Schwab High Yield checking account. No for. curr. fees and other bank's ATM charges automatically reimbursed. E-Trade's reimbursement policy appears to only cover domestic ATM fees, but in reality, they handle foreign ATM fees exactly the same way -- the ATM fee amount if any credited to your account automatically and immediately, every time.

By comparison, the major U.S. banks are pretty bad, sometimes taking 3% or more of any outside the U.S. ATM withdrawals in fees, plus sometimes also adding on a flat charge of a couple bucks in addition for using a non-U.S. ATM machine.

You reaaly have to be careful and aware if you go to use U.S. bank ATM cards outside the U.S., because the fees can really add up as follows:

--Your U.S. bank most likely will charge you the 1% foreign currency exchange fee assessed by the VISA and MC networks (though E-Trade and Schwab don't).

--Your U.S. bank then may add on its own % for currency fee, an extra 1 or 2% or more, and bundle that together with the VISA/MC fee for a total % fee of 3-4%.

--Then your U.S. bank may also charge a flat fee of $2 or $3 for using an ATM machine that doesn't belong to the bank whose ATM card you're using. the same fee as if you were using a different bank's ATM machine inside the U.S.

--And then finally, the bank in the foreign country where you live or are traveling may assess its own separate fee for you using their ATM machine with a card not belonging to that (foreign) bank... I know one country where the local banks' per withdrawal fee on foreign cards is $4.25 -- in addition to all the fees originating from the U.S.

Pays to be careful and informed, otherwise, you could be losing a hefty cut of your funds every time you travel abroad.
2
AnonymousAnonymous2,282 posts since
May 9, 2010
Rep Points: 3,927
Reply