Flexible, low-fee payment methods in Europe?

July 6, 2006 11:32 PM

Suggestions on handling/spending money in Europe?

I'm headed to Europe for an extended trip soon. I'll be gone about a year, and I'll be mostly in the UK, France, Spain, Sweden, Holland, Germany, Italy & Greece. I'd like to see Russia and maybe some less-developed eastern nations as well.

I realize the Euro has really simplified things, but I'm just curious as to good ways to handle spending that don't involve a lot of different transactions and currency conversion, etc. I'll need to be able to do things like secure hotel rooms, maybe rent vehicles, and just generally spend money on food, supplies and touristy stuff.

Should I just take my regular Canadian-issued credit cards with me and pay them down as I go? Are traveller's cheques still used these days, and are they a good idea? How about debit cards? How much physical cash am I going to need to handle? How can I best avoiding paying banks all the money I want to spend on my trip?

Tangentally, what steps should I take to protect myself against theft or other financial losses while travelling?

Thanks for any suggestions or anecdotes you can share.

posted by chudmonkey to travel & transportation (21 comments total)

Debit cards are the way to go in Western Europe at least. Credit's fine. Travellers' cheques are more trouble to spend than they're worth, since in many places (Italy, Spain I think) it's hard to find a bank that'll cash them anymore.

Go to Sicily if you can. It's neat.
posted by furiousthought at 11:52 PM on July 6, 2006

Some observations: Of the countries you've listed, only Russia, the UK and Sweden haven't switched to the Euro. Currency exchange will probably be a non-issue. When I go to a foreign country, I usually get around 100-ish euro from an ATM, use that as spending money and my debit cards for anything more substantial.

Use your Canadian-issued credit/debit cards. See if your bank has a partner in europe that lets you pay out from the ATM for free.

Nobody really uses traveller's cheques anymore. Well, I'm sure somebody uses them, but every time I had a visitor with a cheque, we had to search for a place to cash it, and the fees were always awful. Credit cards have totally taken over this market. As far as physical cash... how much do you carry around in Canada? Plastic, especially electronic debit cards (Maestro, Visa Electron, etc), is very widespread in western and central europe. I remember paying at Burger King in Stockholm with a debit card.

The best way to secure yourself against theft is to keep small amounts of cash on you, have the internationally dialable number to your bank to block cards and, most importantly, keep your cards seperate - so that even if your wallet is stolen, you have a back-up to another account in another place.

I just wanted to add that it's great you're coming to europe for a whole year, it's such a nice contrast to a lot of north americans who want to 'do europe' in two weeks.
posted by jedrek at 12:06 AM on July 7, 2006

Thanks, jedrek! I've resigned myself to not being able to do half of what I want to do, even in a year. I couldn't imagine being in Europe 2 weeks and leaving!

What sort of things should I do in Poland? Great museums, I can imagine...
posted by chudmonkey at 12:32 AM on July 7, 2006

On a recent trip to Italy I was regularly charged 17.8% just to change US dollar bills to Euros. This is WITHOUT the exchange rate- just a commission! Credit and ATMs are the way to go.
posted by michaelkuznet at 12:40 AM on July 7, 2006

Yes. Use your debit card. My wife and I went on a trip last summer to Europe and wasted so much money with travler's checks and time finding banks to do the exchanges. Debit/Credit cards are definitely the way to go.
posted by chrisroberts at 1:43 AM on July 7, 2006

I have a Bank of America card and didn't realize there was a $5/fee PER TRANSACTION on debit and credit purchases. Make sure you know your bank's policy.
posted by null terminated at 2:15 AM on July 7, 2006

As you are making an easy cash withdrawal from an Italian ATM on a Sunday evening take a moment to consider how lucky you are. I can recall spending up to half a day in some banks (Istambul springs to mind) waiting to cash a traveller's Cheque. Typically there would be one queue to hand over the cheque, get it scrutinised, complete a form, submit your passport for examination and collect the all important stamp of approval. And then another queue to submit your form and collect the actual money. And of course the bank would be closed for siesta, lunch, weekends and any concievable whiff of a local/national holiday. You will be saving yourself several days of purgatory and the ATM fees are well worth it!
posted by rongorongo at 2:29 AM on July 7, 2006

You do most stuff with credit card or debit card - but many european shops still prefer cash. It's not as addicted to plastic money as north america.
posted by homodigitalis at 3:07 AM on July 7, 2006

In France, I opened a bank account in the Caisse d'Épargne bank. For 10€ per year, I got a Tribu Cirrus card, which allows you to take out money from any ATM in the Euro zone that has the Cirrus logo (practically all ATMs) without any comissions (limit of 300€ per week).
posted by Sharcho at 4:04 AM on July 7, 2006 [1 favorite]

Your ATM Debit Card will always give you a good exchange rate - Visa and Mastercard ATMs are widely used.

Just contact you bank and find out the fee for using the card abroad. My bank charged $1US per transaction, but it was worth it for the ease of use.

Before you go to any "less developed" country take out a bunch of cash in either Euros or US Dollars ahead of time - ATMs will be around, but it is often easier to be prepared.
posted by k8t at 4:41 AM on July 7, 2006

I've always had the best deal using ATMs (at least in Poland, Hungary and the Czech Republic).

Avoid using special Bureaux de Change for converting your cash or travellers cheques. They either have a poor rate, high commission, or both (especially in the tourist centres). Use one of the big banks in the country you're visiting.

If you do have to use a Bureau de Change, check the advertised rate carefully. The Buy rate is often very different to the Sell rate and the best looking one will be most prominently on display. And ask about the commission.

Have fun!
posted by ciaron at 4:50 AM on July 7, 2006

Note that while generally the advice about credit cards above is correct, this does not apply to Germany. Concerning credit cards, we live in the dark ages for unfathomable reasons.

You can expect to be able to use them at gas stations, car rentals, and to withdraw money from ATMs for insane fees. Restaurants are hit-or-miss. Expect to get weird looks when trying to pay anywhere else with credit cards, especially outside of big cities.

Maestro debit cards, on the other hand, are almost universally accepted.
posted by uncle harold at 4:56 AM on July 7, 2006

If you can use your credit card in an ATM (have the pin set up and everything), that will be good. Also, check what networks your debit card is on. One of my Canadian debits cards (PC Financial) was not on any networks in the UK, but I think my husband's (TD) is. But Mastercard and Visa (not American Express) are accepted widely in ATMs. There is not Interac here at all, of course.

Anyone know what networks are used where? I'm in the UK now, and Maestro is widely accepted, but I can't remember what other networks are here. My UK debit card does Maestro and Cirrus.

I've had good rates using an American debit card and a Canadian credit card in the UK.
posted by jb at 5:20 AM on July 7, 2006

If you do have to use a Bureau de Change, check the advertised rate carefully. The Buy rate is often very different to the Sell rate and the best looking one will be most prominently on display. And ask about the commission.

Important: Compare the buy to the sell *and* the fees. If you're exchanging, a place that has a 4% spread (which means they're buying at 2% below the bank, selling at 2% above) but a high fee ($10 per transaction) is a bad bet for a small exchange, but a good one for a large one, so if you cleaned up in that UK poker game, this is the place to turn that into USD before you head back to Iowa.

A place that charges a percentage fee is bad for large exchanges, but if the spread is under 5%, and the fee is low (say, 1%), it's the best deal you'll get on changing small amount of cash, though if you plan to travel again, it might be easier to just hang onto the currency and use it later (there's 15UKP on a shelf here for the next trip over -- wasn't worth coverting to USD.)

The terms "buy" and "sell" are related to the shop. If they say (at a US shop) Euro Buy 1.19 Sell 1.23, they'll buy euros from you at $1.19, and sell them to you at $1.23. The currency will be local to the shop, thus, in this case, everything gets priced in terms of USD. If you have Euros here, you're selling them for dollars, if you have dollars, you're buying whatever currency you need.

A place that isn't showing you buy *and* sell rates should be avoided. A place that is only showing you the buy rates of the local currency is actively trying to rip you off -- the shop may be buying the local currency at a decent rate, but they sell it at a horrible one. This is the most common hack of all, they show an awesome buy rate for the local currency, but travellers are almost always being sold the local currency, so you get nailed by the shop's horrid sell rate. This works in the long run because tourists buy the local currency, spend some of it, then sell back the rest. The small amount bought by the shop at a decent rate isn't great for the profit line, but the large amount sold at the bad rate makes up for it. Avoid.

If in doubt, ask what 100 of whatever currency you have will get you in whatever currency you want. If they refuse to tell you, walk.
posted by eriko at 5:37 AM on July 7, 2006 [2 favorites]

Here in the UK, you can haggle. I've had good results from taking a picture on my digital camera of a currency board and then holding it up to the glass of local banks and travel agencies and asking if they can beat it.

The Post Office has always been cheapest in my experience -- no commission is charged on buying or selling sterling and the exchange rates have never ripped me off.

At a booth in Gare du Nord station in Paris, the girl and I tried to change the 60 Euro we had left back into sterling. The teller offered us £20. He must have seen our faces because he then offered us £25.

We just laughed in his face and waited till we got back home.
posted by randomination at 5:50 AM on July 7, 2006

Look into the type of credit and debit cards your bank is giving you and look at the alternatives.

I'm UK-based and I have a special travelling account and credit card with the Nationwide. They're almost unique in the UK in that they don't charge for overseas cash withdrawals with the debit/ATM card and they don't 'load' the exchange rate on any expenditure on the CC or withdrawals on the debit/ATM card.

Loading the exchange rate means you get a worse rate -- this is where they make some extra money (on top of the withdrawal fee).

(This account setup is also handy for buying things from abroad via the 'net.)

There are also CCs available where you can pre-pay and get interest on the credit balance.

Further info for UK-types on this moneysavingexpert.com page.

Sorry I can't give any Canadian-specific info but now you know what to look out for ;-)
posted by i_cola at 5:54 AM on July 7, 2006

chudmonkey, if you are going to be based in one particular city or country for the most part of your travels, you may want to consider opening a bank account there. A couple of the banks which you should find in most places in Europe are ING Bank Group and Deutsche Bank. This will help you if you have any problems which may be harder to handle over the phone with your Canadian bank. Remember that there will be a major time difference that will complicate getting in touch during your bank's busniess hours. Some problems are easier to handle in person than over the phone.

Plus, you may be charged extra for every overseas transaction on your debit card. I know American banks do this and for a full year's travels this extra charge will add up. It could be a good way to save quite a bit of money.
posted by JJ86 at 6:22 AM on July 7, 2006

The "Global ATM Alliance" links a bunch of European banks' ATMs (Barclays, BNP Paribas, Deutsche Bank) with Canada's very own Scotiabank for fee-free access! My bank in the US, Bank of America, is also a member of this, um, alliance, and I only paid "currency conversion fees" of a few cents each time I used the Deutsche Bank ATM in Krakow's main square to withdraw local currency with my Visa-logoed ATM/debit card from B of A.

This was awesome. But BEWARE using your ATM card for point-of-sale purchases - I got slammed with a $5 fee on a pair of $7 gloves.

One other piece of advice: If possible, get your home bank to issue a duplicate ATM card to leave with family back home so they can a) instantly stick some money in your account at home should you run into some trouble and b) so the card can be sent to you in case you lose it. I keep mine safer than my passport.
posted by mdonley at 7:32 AM on July 7, 2006

Here's a page with some advice on how to use money in Europe. It backs up what most people said - careful usage of ATMs and credit cards is the way to go. Make sure to check with your bank or credit card company to understand the fees they will charge. Make sure to find out what banks you can use for fee-free ATM withdrawals. Think about using a moneybelt if you are carrying lots of cash in tourist/pickpocket prone areas. We just did a week in Germany and had no problem relying on ATMs - especially in the train stations, which tended to have higher limits on what you can withdraw.
posted by babar at 9:12 AM on July 7, 2006

When we went last November, we put the "trip money" in one account that was tied to one debit card, and left our "living and paying bills while we are gone money" in our other account, and therefore managed to not accidentally spend the mortgage payment. We had a credit card with us in case anything happened to the debit card, along with an ATM card stashed at home (as in, at our house in the States) in case of serious all-our-stuff-stolen-or-lost-or-eaten-by-the-plane type issues. We just took money out of the ATM and used the debit card for everything. Just be aware that ATM/Debit transactions from abroad take a little longer to show up than you might be used to. We made a purchase at the airport on the way out of Britain and it didn't show up for at least a week. In Britain we weren't charged any fees by the banks we used (mostly Barclays I think) and our bank happens to not charge fees for use of other banks' ATMs. I was in France longer ago, but I seem to remember much the same being the case in 2001.
posted by Medieval Maven at 9:26 AM on July 7, 2006

Europe is very up to date when it comes to plastic; in fact, coming from Europe (Norway), I discovered the US was incredibly behind the times, with huge feeds on ATM withdrawals and a reliance on checks or cash for movement of money between people (where in Europe we have been wiring each other money electronically for at least a couple of decades now).

Europe, however, is wired together in a way that often relies on debit. Restaurants and tourist towns have been doing credit cards for ages, but in non-touristy cities, shops, supermarkets etc. will accept European debit cards but not credit cards -- not even local credit cards. In my own country, this is getting much better, but you might still be faced with having to go to an ATM for cash.

To minimize charges, you might consider withdrawing larger chunks of cash.
posted by gentle at 8:53 PM on July 8, 2006