Here is a brief rundown about your options for spending in Euros:
1. French banks do not add fees to withdraws from their ATMs.
2. Expect a currency conversion fee of 1% charged by the network handling the transaction; typically Cirrus or Maestro (owned by Mastercard), Pulse (owned by Visa) or some other entity.
3. Your local bank might add additional fees as a percentage of the transaction and/or a fixed fee. Bank of America charges a conversion fee and $5 per transaction which is one of the highest foreign ATM user costs of any bank in the USA. They then throw their customers a bone by not charging the fixed fee on withdrawals from BNP but many, many credit unions and smaller banks only pass along the currency conversion fee with no fixed fee no matter from where withdrawals are made.
1. Merchants or their banks do not charge the customer for credit card use.
2. Visa or MC charge a 1% currency conversion fee on all charges made outside of the USA (excluding its territories or military installations) regardless of the currency used in the transaction. Accepting a Dynamic Currency Conversion transaction does not avoid the conversion fee.
3. Banks may add an additional 2% if for no other reason than they can. TD Bank, Capital One, Navy FCU, or some credit unions actually absorb the 1% currency conversion fee. Bank of America, Wells Fargo, Citicorp and other large banks charge 3% (1% currency conversion + 2% in house) on foreign transactions. American Express charges 2.7%. It is a fundamental misstatement to conclude that Almost all US banks now add a 3% “conversion fee”. There are many banks and credit unions which do not add transaction fees and only pass along the currency conversion fee. USAA is a large bank which only passes along the 1% conversion fee but adds no additional costs to foreign transactions. Savvy consumers inquire about these fees before opening a bank account anywhere.
Some US banks now issue chip and signature cards which are becoming more and more important to travelers. To my knowledge, there is only one chip and PIN card available in the US without any annual fee and that is the USAA Mastercard. All foreign transactions using this card are completed with the user´s PIN – a signature is never required nor ever accepted.
Many US bank issued chip and signature cards are issued with a PIN which may be required for certain kiosk purchases. Note: using a PIN this way has nothing to do with placing a US credit card into an ATM for a cash advance which also requires a PIN. Cash advances using a credit card can be done with the magnet strip format, have little to nothing to do with chip and pin usage, and can be an extremely costly way to obtain cash.
These are almost impossible to cash and may involve degraded exchange rates. Pre loaded ATM cards with a local currency are nothing other than updated TCs and should be avoided due to their unfavorable rates of exchange and high fees charged per transaction.
For certain travelers needing euros to pay for apartments (and acknowledging associated risks of loss or theft) cash may be converted at reasonable rates at several locations in Paris. Exchanging dollars to euros will cost 2% to 3% which is about what big banks charge to use their credit cards:
Electronic Funds Transfer (EFT)
For individuals who require euros to pay for apartments, schools, or other types of cash obligations, there are several entities which can easily make transfers for you at virtually no cost to the user. It requires your establishing an account (the process is similar to establishing a new bank account), linking this account to your local bank, and using a secure on-line interface. These operate in a very similar fashion to Paypal except that they can make a payment in virtually any currency. Payments may be made with a wire transfer (with modest cost), EFT (at no cost), or drafts may be sent using the mail system (at no cost):
There are a few additional steps involved such as establishing the payees address or bank information but for many types of transactions this option is fast and very inexpensive.
Make no assumptions about what your bank is charging you for access to your money. Ask about fees and how they are assessed. Many banks, most of them large, national banks, are more concerned about offering meaningless promotions than they are in providing quality, low cost service to their clients. Do not overlook small regional banks or credit unions. These institutions can save you a bundle and offer more personalized service in the process.