# Exchanging Dollars for Euros (Cash)



## DXK (Jun 1, 2007)

dbs600 said:


> I just called and Bank of America states that they charge a 4% money advance fee at ATMs, while Capital One states that they charge a 3% or $10, whichever greater, fee. So, it seems that both rates are better than the 9% Citibank wants at a branch...


You're confused: that 9% at Citi is not a fee, it's an exchange rate difference between the market and the retail transaction. In addition to this, there is an ATM fee that banks charge for using other bank's ATM. What we are trying to tell you, is that BofA has an arrangement with Deutsche bank whereby you won't be paying ATM fee, only the exchange rate differential, which should be less than if you bought it here.


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## ProRail (May 31, 2006)

dbs600 said:


> I just called and Bank of America states that they charge a 4% money advance fee at ATMs, while Capital One states that they charge a 3% fee or $10, whichever greater. So, it seems that both rates are better than the 9% Citibank wants at a branch...


Last time I was there, you can use a BOA card at any DB ATM with no additional fees. Of course, since then the banks may have gotten more hard-nosed about fees.


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## dbs600 (Apr 29, 2010)

Uh huh, got it! Thank you for the clarification DXK. So the question becomes... what is the exchange rate differential when using a Bank of America, Capital One, or Citibank banking / credit card in Europe.


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## DXK (Jun 1, 2007)

you can call them and find out what it is today. For example, if you pay for a hotel euro 500/night today, what would it convert to in $, then you'll know the %


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## dbs600 (Apr 29, 2010)

Right, but the percentage you speak of is the sum of the exchange rate and the exchange rate differential (i.e.: If I ordered money at a Citibank branch today, the percentage would be a 36% premium for the exchange rate and a 9% premium for the exchange rate differential, equalling a percentage premium of 45% or $1.45 for every 1 euro), correct?


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## Tanning machine (Feb 21, 2002)

dbs600 said:


> I just called and Bank of America states that they charge a 4% money advance fee at ATMs, while Capital One states that they charge a 3% fee or $10, whichever greater. So, it seems that both rates are better than the 9% Citibank wants at a branch...


You also have to distinguish between a cash advance on a credit card and a cash withdrawal from your checking account on an ATM. Cash advances carry fees just like they do in the US because you're basically getting a loan on your credit card.

Use your bank ATM. Even the worst of them are generally only going to charge you a foreign ATM fee and perhaps an exchange fee (BofA charges $5 + 1% of transaction for exchanges at their non-network ATMs).


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## DXK (Jun 1, 2007)

dbs600 said:


> Right, but the percent you speak of is the sum of the exchange rate and the exchange rate differential (i.e.: If I ordered money at a Citibank branch today, the percentage would be a 36% premium for the exchange rate and a 9% premium for the exchange rate differential), correct?


No, if you order cash euro 100 from citibank today you will have to pay $146, which is the premium above $136 which is market exchange. 
If you stay in Mandarin Oriental in Munich and spend euro 100 for a room and put in on the credit card, you card will be charged anywhere between $136 and $146 (you can only know a range but not the exact number before you call them / get a bill + foreign currency trans fee from 0 to 3% depending on the issuer.
If you get money from DB ATM in Munich and you are BofA customer, for $100 withdrawal you will get between euro127 and euro136 (closer to 127), with NO fee.
If you get money from non DB ATM you will get euro127-euro136 (closer to 127) + a fee.


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## FrankAZ (Feb 19, 2009)

When you exchange currencies there are large two components: the variable exchange rate and the spread on that; and the nominally flat-rate consumer transaction fees.

The offered exchange rate is usually related to the interbank or spot rate and varies split second by split second. Major banks and other businesses offering real-time services tie their immediate rate to that interbank rate plus some percentage. A good ForEx house might offer you IB+1%, a typical high street bank might offer IB+3%, a credit card or debit card IB+3%, and some dinky airport Bureau De Change Kiosk or small high street bank unaccustomed to dealing in currency IB+5% and higher. Most banks will quote you a wider range than the one they actually charge because the quote sheet is prepared infrequently and has to cover unexpected extreme movements. In practice you get charged whatever the rate is at the moment the deal is made. Often the high street deal is referred (by phone) to the bank's currency desk where the actual rate that moment is known. Always challenge the rate and request the commercial rate and not the tourist rate. The tourist rate is a rip-off and only paid by people who don't ask for the commercial rate.

If you are transferring currency between accounts it gets more complicated and you can sometimes piggy-back on a corporation transfer and get an even better rate (lower spread) if you bide your time and establish a relationship with your bank's currency desk. But, if you do have a foreign currency account then a 3rd party ForEx house is usually better than a mainstream bank. Certainly there are fewer/smaller surprise fees such as wire fees since a good ForEx house has free direct debit/credit arrangements either end. I have been happy with www.xe.com. (They also offer a currency-by-mail service for cash transactions though I have never used it and don't know how they compare. They claim better than a bank).

The other component of your cost - the flat-rate fee - is very variable. A use fee can be charged by banks at both sides of the transaction: the foreign bank AND your own bank, though often one or both can be waived to zero if you keep your wits about you and choose your bank and the foreign ATM carefully. Such no-fee transactions are sure to have a sub-optimal exchange rate though because those bankers know how to make (collect) money.

Unless you are buying something very expensive needing large amounts of cash ATM visits withdrawing the max daily limit on a debit/ATM card is the way to go. Just research your US bank's foreign partner relationships before you travel. I'd avoid any large cash deals for all the obvious reasons, plus you are not familiar with the feel of foreign currency and it would be easy to be given counterfeit bills. Even with small purchases expect to collect some alien coins when they see a sucker. (I have some Japanese and Chinese coins from Europe, which I can use).

Finally, check out www.oanda.com for handy real-time quotes of the various spreads on instantaneous real-time exchange rates based on actual trades. That will give you an idea of what is fair before you visit anywhere on the high street.

Frank.


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## Tanning machine (Feb 21, 2002)

The above is a good summary, but my experience using BofA, whether at a "network" ATM (DB or the others) or a non-network bank, is that the exchange rate is almost exactly what is posted on the interbank exchange rate quotes. Any spread is so minimal as to be attributable to intra-day fluctuations or rounding errors rather than a built-in spread for profit. Yes, they make some money on the fees if those aren't waived, but not it seems on the spread.


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## Chris90 (Apr 7, 2003)

dbs600 said:


> I imagine there are large service fees - in excess of the standard $2 or $3 in out of network fee one experiences in the US - when using an ATM in an airport in Germany with a standard issue US banking card, no? Can someone confirm?


I did this last week in Belgium. The rate was $1.31/Euro, which was right on the official rate. The fee was $4 per transaction. I used my ATM card, which is not debit.

Only problem was the airport ATM in Brussels didn't take Cirrus, only Plus - so I had to find an ATM in town.


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## Tanning machine (Feb 21, 2002)

dbs600 said:


> I imagine there are large service fees - in excess of the standard $2 or $3 in out of network fee one experiences in the US - when using an ATM in an airport in Germany with a standard issue US banking card, no? Can someone confirm?


I have not found foreign ATMs to charge their own fees. I'm sure there are some, but it's not as prevalent as the US, where you get hit with a fee from the ATM you are using and one from your own bank, just to get dollars. Typically whatever fee you pay is to your own bank for using an oversees ATM.


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## harristex (Aug 6, 2010)

Thanks Guys. Appreciate all the good advice.
Almost waited too long to get Euros here but think I just made it. 7th largest city in the US, San Antonio, but Chase has to order Euros! 24-48 hours to get them. Anyway, got a rate of 1.4354 ($495.21 got me 345 euros) Will see what I get in Munich. Took me almost an hour but generated a log-in and password for Chase, got online and set up my creditcard to get advance if I need it. Got to get PIN tomorrow. Don't use ATM's usually. Beautiful night on the Riverwalk!


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## gesoffen (Jun 18, 2004)

dbs600 said:


> I just called and Bank of America states that they charge a 4% money advance fee at ATMs, while Capital One states that they charge a 3% fee or $10, whichever greater. So, it seems that both rates are better than the 9% Citibank wants at a branch...


Is this fee for Cash Advance on a line of Credit (i.e. Credit Card Cash Advance)? If so, that is pretty standard fare for all credit cards/banks.

What you need to ask your banks is:
1) What fees are there for foriegn currency credit card transactions? (ideally it will only be 1% of the purchase and the exchange will be at a competitive level - somewhere in the middle of the retail buy/sell rates)
2) What fees are there for using an ATM/Debit card to withdraw foreign currency at an ATM oversees? (Again, 1% plus any fixed fees your bank charges for using a non-network ATM is typical)

VISA/MC themselves charge 1% on currency conversions. You bank may charge more. There are plenty of banks out there that don't charge additional fees, so shop around. Credit unions are a great place to start.

I would advise against relying on credit card cash advances as they have a high fee and start accruing interest immediately upon transaction. Depending on the terms of your credit card (cash advance interest rates, cash advance fees, conversion fees, etc.), you will likely end up paying MORE than simply buying Euros.

Also, if offered, do not conduct transactions oversees in US currency (some hotels, restaurants will do this to "help"). Also known as "dynamic currency conversion (DCC)", you end up paying a fee plus getting a very poor exchange rate. If a DCC transaction was already conducted without your approval, insist that they void it and conduct the transaction in local currency.


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## gesoffen (Jun 18, 2004)

harristex said:


> Thanks Guys. Appreciate all the good advice.
> Almost waited too long to get Euros here but think I just made it. 7th largest city in the US, San Antonio, but Chase has to order Euros! 24-48 hours to get them. Anyway, got a rate of 1.4354 ($495.21 got me 345 euros) Will see what I get in Munich. Took me almost an hour but generated a log-in and password for Chase, got online and set up my creditcard to get advance if I need it. Got to get PIN tomorrow. Don't use ATM's usually. Beautiful night on the Riverwalk!


Yesterday's closing rate was about $1.373/1***8364;. That difference of roughly $0.06/1***8364; is Chase's retail sell rate + there fees. Obviously, you had a reason for "buying" Euros here before you went (perhaps you wanted a bit of security of cash in hand prior to arrival) and the difference was worth it.

Again, your bank will vary but my trip to Munich and Berchtesgadenerland last week showed ATM withdraws at very close to the IB rate +1% exchange fee (no ATM fees). Any differences between the IB rate and my actual exchange rate were out in the 1/10s or 1/100s of a cent and is probably just normal fluctuations.

As I noted above, avoid using a credit card cash advance unless you're in a dire emergency.


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## rallanr (Apr 30, 2009)

1) ATMs are the best way - I'm not sure why the OP says this isn't an option.

2) If you HAVE to use a bank, my advice is do it before you go so it's done and you don't have to worry about it in Germany.

3) Why, oh why, do people keep asking about this and not use the search function? This question comes up about every other month. Since people are so lazy perhaps we need to make this a sticky at the top of the forum page


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## dbs600 (Apr 29, 2010)

Thanks for everyone's help! I've finally figured out the best setup:

A Capital One credit card for most all purchases and a Citibank Gold bank card for ATM withdrawals, both of which offer current market exchange rates and 0% foreign transaction fees, the bank card also reimburses out of network ATM fees.

To boot, my bank's branch manager stated that while no service fees should appear, he'll reimburse any that do. And, the $0.09 spread previously mentioned applies only to ordering euros at the branch, prior to departure, and not to ATM withdrawals, as the foreign transaction fee is normally charged in lieu of same.


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## DXK (Jun 1, 2007)

dbs600 said:


> Thanks for everyone's help! I've finally figured out the best setup:
> 
> *A Capital One credit card *for most all purchases and a Citibank Gold bank card for ATM withdrawals, both of which *offer current market exchange rates *and 0% foreign transaction fees, the bank card also reimbursing out of network ATM fees.
> 
> To boot, my bank's branch manager stated that while no service fees should appear, he'll reimburse any that do.


This statement is not correct; the difference will be smaller than getting cash here from the branch, but expect a premium over the interbank rate which is widely quoted. However, this is the best you can do, so don't let it bother you. BTW, did you tell us your itinerary?


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## dbs600 (Apr 29, 2010)

DXK said:


> BTW, did you tell us your itinerary?


Sitting back and leaving the itinerary up to the lady; all things automotive excepted. :bigpimp: Thank you though.


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## Tanning machine (Feb 21, 2002)

rallanr said:


> 3) Why, oh why, do people keep asking about this and not use the search function? This question comes up about every other month. Since people are so lazy perhaps we need to make this a sticky at the top of the forum page


30 posts ago I referred OP to the wiki, where it is covered.


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## RBinDC (Aug 8, 2010)

dbs600 said:


> I imagine there are large service fees - in excess of the standard $2 or $3 in out of network fee one experiences in the US - when using an ATM in an airport in Germany with a standard issue US banking card, no? Can someone confirm?
> 
> Also, note that if you're using a credit card, you may be charged up to a 3% foreign transaction fee, unless you have a Capital One, Discover, or American Express card that waives / reimburses same. I just received my new card in the mail; quick turn around from app to receiving a new card with Capital One!


Bank of America has a special arrangement with Deutche Bank in Germany and BNL d'Italia in Italy. They only charge a 1% fee for cash withdrawls with no ATM fee. That's probably the best rate you can get for getting Euros in cash. However, Capital One Visa is the best way to charge items, e.g., meals, hotels, etc. They charge NO FEE and give you the best exchange rate. However, make sure the vendor does not charge your card in US dollars because they typically get a markup on the exchange rate. What a great card!


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