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6 simple rules for using your ATM and Credit Cards in Europe
The convenience of ATM cards and Credit cards extends over the ocean in Europe as well thanks to a few global cash networks. These networks allow cards to be used in different countries just as you would used them at home in the US. You should have no problems using your American cards anywhere in Europe provided you check a few things before you leave. This article will outline these few things you need to know before you use your ATM and Credit Cards in Europe.
Background:
Each major credit card network (VISA and MasterCard) manages their own global cash networks. VISA’s network is called PLUS (also known as Visa PLUS) while MasterCard manages two networks: Maestro and Cirrus. These days all ATM Cards are working as credit cards as well, either VISA or MasterCard an you will most likely see these symbols on the back of your ATM card. If you don’t then your bank is probably very small and is not using any of the major card networks. 
You can also check the back of your VISA or MasterCard credit cards and you will also notice one or more of these symbols. Sometimes you can see a Cirrus logo on a VISA credit card. I’m not really sure why but the cash networks are separate from the Credit Card networks, so you can see some odd combinations.
The important thing is to know what symbols are on the back of your ATM and Credit Card that you’re planning to take with you. You will need to know these symbols when you want to get cash in Europe. Not all ATM machines in Europe support all cash networks. You might see some bearing the PLUS sign but not the Cirrus and vice versa. So, just know the symbols.
ATM or Credit Card ? Fees, fees, everywhere!
Should you use your ATM or Credit Card in Europe or both? The answer is a bit more complicated but I’ll try answering this question from a pure financial perspective. It is your choice because it depends on the fees you’ll be paying regardless of what kind of card you’re using.
ATM Cash Withdrawal Limit:
Each US bank has a different daily limit on cash withdrawal. US banks vary a lot in their limits and with some banks you can even ask for an increase in the daily limit for a given period of time. You just have to check with your bank. Wells Fargo for example, allows $300 maximum daily, so you would have to do a mental conversion before entering the sum you want to withdraw in the foreign ATM machine. I have not encountered any ATM machine in Europe that would limit the amount you can withdraw. The only limitation was imposed by my bank in the US.
ATM Cash Withdrawal Fees:
A combination of a Flat Rate and/or a percentage of total. Again, it depends on your bank. You’ve got to ask. For example: Wells Fargo charges $5 for withdrawing any amount up to the daily cash maximum allowed. Washington Mutual charges 1% of the amount withdrawn. So, you have to know what your bank will charge you. There are no extra fees associated with ATM machines in foreign countries…at least in general. However, just like in the US where you get charged extra by getting cash from ATM machines in shopping malls and some grocery stores, in Europe as well you have to be careful where you get your cash from. The safest place in terms of not being charged extra is a local bank.
CREDIT Card fees for purchases made in a foreign currency
VISA or MasterCard charge 1% for converting to US dollars + a percentage of the purchase total after converting to US dollars. Again, call your bank so you won’t be surprised. And for fun, just ask them why they charge you on top of what VISA/MasterCard charges you. It’s always great to see how banks try to explain that they’re just trying to take advantage of the increase in international travel and make lots of money.
American Express foreign currency conversion fees
If you look at the back side of the first page of your American Express statement you will see a somewhat clear statement with regards to transactions made in foreign currency. Transactions Made in Foreign Currencies: If you incur a charge in a foreign currency, it will be converted into US dollars on the date it is processed by us or our agents. Unless a particular rate is required by applicable law, we will choose a conversion rate that is acceptable to us for that date. Currently, the conversion rate we use for a Charge in a foreign currency is no greater than (a) the highest official conversion rate published by a government agency, or (b) the highest interbank conversion rate identified by us from customary banking sources, on the conversion date or the prior business day, in each instance increased by 2%. This conversion rate may the rates such establishments use.
What does this mean? Well let’s just take a simple example: Let’s say you purchase something in France that is 100 euros. American Express, when they receive the transaction, converts the price from Euros to U.S. Dollars using the highest conversion rate they can find (at least that’s what they’re saying…it’s hard to really check). Let’s say that they find 1.5 US Dollars to 1 Euro. That means that they will charge you $150 U.S. Dollars for the item you have purchased. Now, the finance charge is 2%, which means that that they would add an extra $3 (2% from $150). So, your total for that item would be $153 US Dollars.
US Bank Visa fees for purchases made in foreign currency
Here’s an example of what US Bank says about foreign transactions on my VISA credit card statement: As a reminder, we may charge a foreign fee of 3% on transactions that occur in a country other than the U.S. Now, this is interesting ! As if they will ever NOT charge me 3% on transactions that occur in another country 
. Remember that this is 3% on top of the 1% fee that VISA charges for conversion. That’s a minimum of 4%. Using the example I have used for American Express, the same 100 Euro item would cost me $156 if I would use my US Bank Visa.
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Share your own experience !
As a traveler, I love reading about other people's travel experiences. I know for certain that my articles are by no means complete and they can certainly benefit from your input. Feel free to share your own experience and add a comment or correction to this article.
| December 24, 2007 |
Posted in Most Popular, Travel Tips |
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January 3rd, 2008 at 6:55 pm
I came here by accident, but just might stay
August 31st, 2008 at 4:48 am
I know this is post is a bit old, but I just stumbled across it and thought I’d add my two cents. Whenever overseas, I use my Capital One Visa Cards…not only do they not charge a foreign transaction fee, they absorb the fee passed down by VISA.
September 2nd, 2008 at 3:28 pm
Thanx for the comment Adam…yeah this post is old but very useful apparently. Thanx for the good info on Capital One Visa Card. That seems like a great choice if they don’t charge any foreign transaction fees…amazing!
January 22nd, 2009 at 12:32 am
I travel to Ireland and the U.K. carrying groups to play golf once or twice a year. The best way to save money on exchange rates is to open an Irish or UK current account (in my case the Bank of Ireland (they have Euro banks in the Republic and Pound Sterling banks in Northern Ireland which is a part of the U.K.) Each carries an ATM card which they refer to as a “Laser” card in the Republic and “Switch” card in Northern Ireland. I watch the currency exchange during the year and when it is advantageous I purchase the currency and have it wired to my Irish accounts. I get the currency at slightly higher rates than inter bank rates and there is no charge for withdrawal when I use my cards in “Euro land” or Great Britain.
January 22nd, 2009 at 7:02 am
Thank you Tom…that’s really good insight for those who travel often to UK/Ireland.