Though certainly no expert, I have followed the topic of money exchange carefully for some time now and have drawn several conclusions. Here is a summary of money exchange options and how you may benefit from the advantages of each one:
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Credit Cards
1. While your bank may not charge a currency conversion fee, Visa and Master Card does on all transactions made outside of the US whether the charge is in dollars, euros, pound sterling, or any other currency.
2. Most banks, particularly the large well known variety, add a 2%-4% service fee to all international charges or fixed fees per transaction or both. You will pay this in addition to the 1% Visa/Master Card currency conversion fee.
3. Many smaller banks or credit unions pass along the 1% MC/Visa currency conversion fee but few add any additional fees of their own
4. If you return an item or are issued a credit on your card, you will incur new and additional fees on the credit transaction.
5. Capital One is one of the few credit card issuers that not only adds no fees of their own to international transactions but absorbs the Visa/MC currency conversion fees. Using this or a similiar card is the least costly means of doing business (making purchases) outside of the US. What Capital One may charge for those carrying monthly credit card balances is another matter.
6. Discovery cards are not accepted in France (or Europe in general). American Express is accepted by hotel chains and more exclusive restaurants. AE is not widely accepted outside of well trodden tourist paths.
7. The only way to really know what you are paying for the privilege of using your credit card while traveling is to ask a knowledgeable representative at your bank. This website may help one understand the costs of international transactions:
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ATM Cards
1. Few if any French banks charge for withdrawing money from their ATMs. This means transactions are at or near mid market rates with no fees.
2. Cirrus and Pulse charge a 1% currency conversion fee on all ATM withdrawals make using their networks.
3. Few US banks will miss the opportunity to add fees and charges to international ATM transactions. The Bank of America/BNP alliance offers no cost currency exchange in obtaining euros at market rates. Again, many smaller banks and credit unions do not charge for international ATM withdrawals.
4. Those using ATM cards with 6 digit PINs may want to confer with a knowledgeable representative at their bank as 4 digit PIN access appears to be a European norm. A 6 digit PIN card carrier may find that his card work fine by entering only the first 4 digits with withdrawing cash at a European ATM.
5. If your ATM card is tied to more than one account, a French ATM will not give you the option to choose from which of your accounts the withdrawal will be made. Knowing which of your accounts tied to ATM withdrawals in the default account may be useful information for those travelling.
6. When in need, remember that virtually all French post offices have ATM machines available.
7. Daily limits may make using ATM machines as a primary means to obtain funds for prepayment of apartments difficult. These limits are generally set by terms established by your bank, not necessarily a French bank.
8. The only way to really know what withdrawals will cost is to ask a knowledgeable representative at your ATM issuing bank.
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Travelers Checks
1. In my opinnion, ATM machines have made Travelers Checks obsolete.
2. Travelers Checks are expensive to buy, difficult to spend, and are generally exchanged for euros at rates less favorable than cash rates (direct dollar for euros).
3. Overall, I find no compelling reason to use them.
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Cash
1. There may be many valid reasons which require one’s obtaining large cash amounts in euros; rental or apartment deposits/advance payments being one of the most common.
2. Generally, the most cost effective way of obtaining large euro amounts is to trade dollars in Paris (acknowledging the obvious risks). I have found the following offer the lowest overall cost to the traveler who needs such an exchange (usually at 2%-3% premium above the mid market rates):
Updated 25 July 2009
