To be honest, I have worked on this post for a long time. I wondered if anyone really cared about foreign credit card and money issues, and didn’t want to labor too long if the topic was not useful, but then a friend asked our opinion last week so I figured that it might be worth publishing my opinion, and certainly the advice below is strictly my opinion. Please do your own independent research.
This post was originally inspired by a series of 5 phone call between a Canadian rental car company than with my credit card company. When I got home from my trip, I read my receipt and discovered this phrase on my bill: “Customer had the option to choose Canadian or US dollars and choose US Dollars. (name omitted) rental card company did the conversion for a 3% fee.”
No, wrong, I said to myself, I did not choose Canadian dollars, and my credit card (as most good, modern cards) do not charge ANYTHING for the currency conversion and they give me a good rate to begin with. So the rental car company pocketed an extra 3%, which was substantial for a two-week car rental. We did finally get it turned around after a couple weeks of a complete mess. The company refunded my money and re-billed, the exchange rate had changed against the US dollar, so I automatically got LESS back than I had paid, which began a long comedy of errors. The company was cordial, and in fact, finally just reduced my bill to the point that any fluctuations in exchange were taken care of plus some for my trouble.
There are two parts to a foreign transaction with a credit card. The first is actual exchange RATE between the dollar and a foreign currency. You can check these exchange rates by entering USDFFF=x or FFFUSD=x where “FFF” is the foreign currency trading symbol and USD is the symbol for US dollars. Some common foreign symbols are EUR for Euro, CAD for the Canadian Dollar, CHF for the Swiss Franc and GBP for the Great Britian Pound Sterling. The second issue is a currency conversion fee. Visa and MasterCard charge a 1% fee for foreign transactions, This you are going to pay, it is not something you can avoid. Meanwhile, until a couple years ago, the sponsor of the card charged an ADDITIONAL 1% – 3% fee for foreign transactions. So, if you had an “Acme Bank” Visa card, then Acme Bank would tag on this additional fee. Good cards no longer do this. Make sure you have a card that does not charge foreign transaction fees.
But wait, there’s more confusion. Continue reading below for MY OPINION on the best way to handle the actual foreign purchases. This a good time to repeat my disclaimer. There are certainly many people out there who are more seasoned travelers with better ideas on this issue, but we have logged many weeks out of the country, so these ideas may help. The standard disclaimer is that there is “wisdom in much counsel.” As I mentioned above, don’t depend solely on my observations, You should do your own additional research.
Foreign Credit Card Purchases.
The merchant asks, “Would you like to pay in Dollars or Euros on your card?” Seemed simple enough to me, dollars of course. (Wong) Later, I happened to read somewhere that choosing Dollars over the local currency invited the merchant to rip you off in two ways. First of all, you can get a really bad exchange rate, and secondly, they can tack on the conversion fee mentioned above. It took a good while for this to sink in with us. We’d ask each other, “What did they say was best? Do we want local currency or US Dollars, can’t remember.” So …
When a foreign merchant asks if you want to pay in US dollars or local currency, and you have chosen a credit card with no foreign transaction fees, then ALWAYS choose the local currency. Check your receipt carefully and watch your credit card online to make sure the transactions are to your satisfaction. None of this strategy really works if you have a credit card that is not International friendly. Shop for a US credit card that does NOT charge for international conversion and find one with a chip.
Getting local currency.
We avoid the currency exchange at the airport. It seems obvious to me that this is a hugely bad idea, but they do seem to stay in business. Check the Travelex Web site for more information. Some US travelers go to their local bank and order the target currency ahead of time. That strategy is probably fine if you want to bother to go that route, but I doubt that you will get the best rate. Our strategy is to simply use a check card. We have a second separate checking account with an online bank, one that does not charge ATM fees and has no foreign conversion fee. (You will have the pay the foreign banks ATM fee though.) We use our phone apps to load that checking account with enough to draw on when traveling and use an ATM located in bank lobbies (Good security and in case the ATM keeps our card, we can walk inside and ask for help). We use this separate checking account JUST IN CASE something happens, therefore our primary checking is not compromised. With all that said, we’ve never had many problems getting currency from an ATM. The only problems have been navigating the foreign language on the screen. Look for a British flag symbol, which indicates changing the language to English. Visiting a teller inside the bank probably makes no sense. You probably can not cash a check, and changing US dollars for target currency probably yields a poor rate like the airport or train station exchanges.
I would never get a foreign cash advance on a credit card (vs a debit or check card). There are too many additional fees for cash advances and at least with my cards, the interest accrues starting immediately. Regardless, try and minimize ATM transactions, you save fees that way; get as much as you need with one draw.
We were immersed fairly easily into getting cash internationally because of weeks we spend in Canada. We found the networks that supported our US cards and learned that going to bank lobby kiosks was safe and easy. We have always steered away from the small stand-alone ATMs, the kind you might find in a convenience store. I think there is too much danger with skimmers, excess fees and losing your card. When the banks were closed on Saturday, I used an ATM in the train station in Italy and there were no English options. I really struggled with that transaction, trying to figure out the Italian options, the screen twice took me to what I can only figure was “Change your PIN”.
(If the exchange rate is good, and you are planning on traveling in the future, you might get extra foreign money and take it home with you. It is nice to get off the plane the next trip and have ready local cash. Another point is that I have an HSBC Online Account (British Company). I haven’t tried it, but their Website indicates using world-wide ATMs are all “in network”. meaning fewer charges.
When we were in Switzerland, we got confused looks when asking for the location of an ATM – they use the term “Banomat” there.
Gaming the exchange rate.
It is like gambling, but if you can watch the exchange rate (Google USDCAD=x or USDEUR=X or USDGPB=x), you might save a few dollars on big purchases. It always seems like the Canadian Loonie is in flux when we visit, and sometimes we save a few dollars by timing ATM draws and if you have a trip planned and can prepay lodging, you might save some money. We watched the Canadian Dollar drop by ten cents last January for a few day and called our lodging to prepay a September trip. It saved us $400 dollars. During a trip to Europe last summer, I saw that the Euro was trending down. By waiting a couple days to get extra cash, it cost us less with a stronger US dollar.
For pickpocket protection, don’t take your US driver’s license if you are not driving (you have a Passport for ID). If you are traveling with someone, have the second person carry a DIFFERENT credit card in case the primary card is lost, compromised or blocked by the credit card company.
Find out how your credit card company or bank handle travel alerts and make sure they are alerted ahead of your itinerary. Even with that done, we have had blocks on cards, because somehow the travel alert was not recorded correctly.
Some like to be away from it all, but Verizon has a $10 per day international plan for Europe and a $2 per day plan for Canada and Mexico, where you can take you US minutes and data with you. With our Verizon plan, you don’t pay for the days you don’t use your phone. You might mostly need it for calls with your credit card company. (See above). More than once we have had a credit card block when a foreign transaction showed up and we have gotten a text or a call from them.
In addition, a phone can be invaluable for navigation. Even with a car nav system, we were lost in an Italian city last week. It finally dawned on us to ask Siri on the iPhone and she gave us turn-by-turn directions. There are other ‘offline” apps that only use the GPS component of your phone so you don’t use your data. An Italian friend told us about maps.me, where you can preload the maps for the place you are visiting before you leave home. A phone invaluable for walking directions. We were in Pisa, Italy in the pouring rain and could not find the leaning tower. Siri gave us great walking directions.
I carry ours in a wallet around our neck. I scanned color copies and emailed them to our Gmail accounts. If something happens, we always have a copy that is easily accessible from anywhere in the world. In addition, we keep copies in our checked luggage and a readily accessible copy in our carry-on luggage. In Italy, the hotels were required to record our passport number, so we needed them for that.
At the risk of sounding like a hypochondriac, I would suggest taking a thermometer. I knew I was sick in Italy last spring but was shocked to find that I had a 103-degree fever. That said, take meds for everything that you think might affect you. Oh and Tylenol is regulated, at least in France and Ireland. Marcy needed some for a hip issue and we could only purchase it by asking for it over the counter and then only 24 tablets at a time. P.S If you bring along any medications, prescription or otherwise, carry them in the original bottles. Before you go it would be good to Google something like “Meds Cheatsheet <name of country> ” The brand and generic names are different than in the US. I have had trouble describing what I wanted.