Obtain Euros

Two questions as I am leaving for Europe in a couple of weeks.

1) What about using a debit card for purchases? I have heard that there
is no 3 percent up charge for foreign transactions, just the same as if
you were at an ATM machine.

2) I have heard the latest "scam" is that they will process your
purchases in dollars rather than local currency. This incurs all kinds
of fees--exchange fees, foreign transaction fees, etc. I was told that
you needed to make it very clear before turning over your card that you
want the charge in local currency. Anyone had any experience with this.
Ireland was mentioned in particular. I'm going to Germany and Prague.

Another thing I was told was to be sure that the ATM machine you use is
in the "network", i.e. Cirrus, Pulse, etc. There should be a decal on
the front of the machine that tells you. If you use an out of network
machine--like at a convenience store--it is Katie bar the door. They
can charge what they want.

Tucker in Texas

"Frank from Deeetroit" <dadurweird@voyager.net> wrote in message
news:UP-dnXhv5r26YlnZnZ2dnUVZ_rWdnZ2d@...
>
> "Richard Whitlock" <whitlock@alumni.utexas.net> wrote in message
> news:M85xg.17129$ST.16847@tornado.texas....
> > Two questions as I am leaving for Europe in a couple of weeks.
> >
> > 1) What about using a debit card for purchases? I have heard that there
> > is no 3 percent up charge for foreign transactions, just the same as if
> > you were at an ATM machine.
> >
> > 2) I have heard the latest "scam" is that they will process your
> > purchases in dollars rather than local currency. This incurs all kinds
of
> > fees--exchange fees, foreign transaction fees, etc. I was told that you
> > needed to make it very clear before turning over your card that you want
> > the charge in local currency. Anyone had any experience with this.
> > Ireland was mentioned in particular. I'm going to Germany and Prague.
> >
> > Another thing I was told was to be sure that the ATM machine you use is
in
> > the "network", i.e. Cirrus, Pulse, etc. There should be a decal on the
> > front of the machine that tells you. If you use an out of network
> > machine--like at a convenience store--it is Katie bar the door. They
can
> > charge what they want.
> >
> > Tucker in Texas
>
> With regard to the "network," I do not use my ATM cards while aboad, but
> while visiting the UK this past May, I could not find a Cirrus, NYCE, or
The
> Co-Op ATM visiting the Manchester and Liverpool. After the first few
ATM's
> that did were not on the "network" I would check out other ATM's just to
see
> where I would be able to use my ATM card, no luck.
>
In June we were visiting friends in the village of Stansted, England (yes,
near the airport) and the village had exactly one ATM and it took our ATM
card. We found ATMs that took our card in Stockholm, Tallin Estonia, St.
Petersburg (heck, they even have a Citibank), Helsinki, and Copenhagen.
Never ran across an ATM that wouldn't take our card. Did find a ticket
machine in the Copenhagen train station that only took cards with chips in
them. (And we don't have one of those.)

Jean O'Boyle wrote:

> If so, that means transferring funds from my money market account to
> checking before I use it..

I wasn't clear which account your debit card is "attached" to. If it's
attached to your checking account, then yes. You must have funds in
that account to cover debit charges. If it's attached to your money
market, wouldn't it just take dollars from that account? Some money
market accounts have a minimum withdrawal amount, but other than that,
they're liquid (at least mine is).

Lee
>
> --Jean

Richard Whitlock wrote:
>
> 2) I have heard the latest "scam" is that they will process your
> purchases in dollars rather than local currency. This incurs all kinds
> of fees--exchange fees, foreign transaction fees, etc. I was told that
> you needed to make it very clear before turning over your card that you
> want the charge in local currency. Anyone had any experience with this.
> Ireland was mentioned in particular. I'm going to Germany and Prague.

We were in Ireland last month and we encountered the situation you're
describing. We knew we might enounter this and, sure enough, we did.
However, I'm not sure that scam is the right word to describe the
situation. With only one exception, we were always asked if we wanted
the charge processed in Euros or in dollars, and the waiter/store clerk
followed our instructions.

At lunch one day, we weren't asked how we wanted the bill processed.
Having been asked "Dollars? Euros?" every other time, I didn't tell the
cashier about Euros when I handed over my charge card. When the
transaction was complete -- and when the cashier resisted canceling the
dollar charge -- I got annoyed. My husband decided he was willing to
treat this isolated incident as an experiment. We've since received our
monthly charge statement. Sure enough, the $19.20 we were charged in the
restaurant has morphed into a $21 (and something) charge.

More important, unless the bank is offering some sort of kick-back to
merchants who charge in dollars, I can't figure out how the merchant
benefits from processing the purchase in US currency. I think the
waiters/retail clerks/hotel pesonnel simply believe they're making life
easier for the US tourists rather than any underhanded scheme.

Here's the way I understand the procedure:
o The store charges the purchase in dollars based on the day's real
exhange rate. (That rate is stated on the charge slip.)
o The store's bank charges a conversion fee and changes the USD amount
on the charge slip to the local currency. The store's bank then
processes the charge purchase, and transmit that information to the
domestic bank that handles your charge card.
o Your charge card bank, charges a fee to convert the Euro purchase back
to dollars and this new dollar amount -- higher than the one you saw on
the original sales receipt in Ireland -- appears on your monthly statement.

If this method is correct, the merchant doesn't benefit from charging
you in USD.

> Another thing I was told was to be sure that the ATM machine you use is
> in the "network", i.e. Cirrus, Pulse, etc. There should be a decal on
> the front of the machine that tells you.

We can share the following about using our Cirrus card in Europe:
Sometimes, the decal will have a name that's unfamiliar. (I can't
remember any examples. I believe the word "Europe" or some variation of
"Europe" was part of the name.) The decal is the familiar double blue
circle. We've had no problems even when the name wasn't "Cirrus."

Karen Selwyn

Frank from Deeetroit wrote:
>
> The merchant benefits in two ways. The USD is worth less than the Euro. If
> the merchant charges the bill in USD, the merchant will charge you their
> bank rate plus any amount the merchant chooses over their bank rate.

Have you had any specific experience that leads you to say the marchant
adds "any amount [he/she] chooses over their bank rate? Our sample of
one incident is admittedly small, but our experience does not support
your statement.

In our situation, the cost in Euros was printed on the credit card
receipt, along with the conversion rate set by the bank, and the USD
amount. Both the price in Euros and dollars were identical using the
conversion rate. My husband did the math in the restaurant since he
decided to treat this incident as an experiment. There was no surcharge
tacked on by the merchant at the time of the purchase. (The conversion
rate is generated by the charge card machine and is tied to the daily
conversion rate the bank is using.)

The difference showed up in our monthly charge statement. It reflected
the fees two banks -- not the merchant -- added to the transaction. One
fee is related to the cost of converting the transaction from USD to
Euros for the Irish bank. One fee is related to the cost of the US bank
converting our charge purchase from Euros to dollar.

> The
> credit card company bills you for the currency exchange rate (USD vs Euro)
> at the moment of sale. Fees are applied per your ATM/credit card fine
> print. The merchant also pays a percentage of any transaction for use of
> the credit card (all merchants pay for use of customers credit cards).

Unless you wanted to suggest something beyond what you wrote, your first
two sentences simply describe the standard practice anytime a person
charges something in a currency other than the currency of his own bank.
This has always been true whether the dollar was/is stronger or weaker
against the host currency.

The last sentence is also standard practice and is wholly unrelated to
transactions in foreign countries.

> The merchant's second benefit is the profit made by accepting a customer's
> credit card, profit that would be missed if the merchant did not accept a
> credit card.

The fact that the merchant accepted the credit card is a given. The only
thing I responsed to is the OP characterizing the practice of charging
purchases in dollars instead of Euros as a "Scam."

Karen Selwyn

Sorry for using the word "scam." It really isn't a scam and I didn't
mean it as a way of bilking someone. Poor choice of words and I
apologize. What they are doing is perfectly legal and acceptable. I
just wanted to give a "heads up" as something that will cost you more
money if you don't watch out for it. Some people may not care of the
additional costs and appreciate the convenience--especially those on
business trips who will be charging it back to the company and don't
want to go through the hassle of figuring out the US dollar vs. the Euro.

Tucker in Texas

Karen Selwyn <kselwyntacc@erols.com> wrote:

>Frank from Deeetroit wrote:
>>
>> The merchant benefits in two ways. The USD is worth less than the Euro. If
>> the merchant charges the bill in USD, the merchant will charge you their
>> bank rate plus any amount the merchant chooses over their bank rate.
>
>Have you had any specific experience that leads you to say the marchant
>adds "any amount [he/she] chooses over their bank rate? Our sample of
>one incident is admittedly small, but our experience does not support
>your statement.
>
The people that benefit are the banks and not the merchant - except in
places where credit cards are not normally used and where the merchant
may actually add some percent to the price if you use a credit card
instead of paying cash. The merchants in the US are forbidden from
doing this by the credit card companies, but outside the US that isn't
true.

>In our situation, the cost in Euros was printed on the credit card
>receipt, along with the conversion rate set by the bank, and the USD
>amount. Both the price in Euros and dollars were identical using the
>conversion rate. My husband did the math in the restaurant since he
>decided to treat this incident as an experiment. There was no surcharge
>tacked on by the merchant at the time of the purchase. (The conversion
>rate is generated by the charge card machine and is tied to the daily
>conversion rate the bank is using.)
>
>The difference showed up in our monthly charge statement. It reflected
>the fees two banks -- not the merchant -- added to the transaction. One
>fee is related to the cost of converting the transaction from USD to
>Euros for the Irish bank. One fee is related to the cost of the US bank
>converting our charge purchase from Euros to dollar.
>
>> The
>> credit card company bills you for the currency exchange rate (USD vs Euro)
>> at the moment of sale. Fees are applied per your ATM/credit card fine
>> print. The merchant also pays a percentage of any transaction for use of
>> the credit card (all merchants pay for use of customers credit cards).
>
>Unless you wanted to suggest something beyond what you wrote, your first
>two sentences simply describe the standard practice anytime a person
>charges something in a currency other than the currency of his own bank.
>This has always been true whether the dollar was/is stronger or weaker
>against the host currency.
>
>The last sentence is also standard practice and is wholly unrelated to
>transactions in foreign countries.
>
>> The merchant's second benefit is the profit made by accepting a customer's
>> credit card, profit that would be missed if the merchant did not accept a
>> credit card.
>
>The fact that the merchant accepted the credit card is a given. The only
>thing I responsed to is the OP characterizing the practice of charging
>purchases in dollars instead of Euros as a "Scam."
>
>Karen Selwyn

Frank from Deeetroit wrote:
>
> YEs, I live about 15 miles from the Canadian border, have been to
> Windsormany times, as well as other countries where there is a difference
> between their currency and USD. Example for the sake of this conversation,
> if the Canadian dollar bank rate values their dollar as .85 cents to the
> USD, then my dollar is worth .85 cents Candaian.

Huh??? One USD doesn't become equal in worth to one Canadian dollar.
That's what the exchange rate is all about: how many units of one
currency it takes to cover a price of an object in a different currency.
Just plug 1 USD into any conversion web site and you'll discover that
your USD is worth more than one of the Canadian dollars. Today, xe.com
says a USD is worth 1.14 Canadian dollars. If you want to buy something
in Canada that costs 1.14 CD, you only have to hand the merchant 1 USD.

> A merchant may charge me .80 cents on my purchase, which would add .05
> cents to every dollar, done all the time.

Since both the Canadian currency and the US currency are called dollars,
I can't follow what you're saying here. However, I can understand you're
claiming that the merchant can decide what his/her individual conversion
rate will be. If you're talking about a cash purchase, I'm sure you're
right. However, we were talking about charge purchases, and behavior
like that puts the merchant at risk of being thrown out of the charge
card network. (See below)

> The merchant can charge you more than the bank. Credit card transactions
> charge the bank rate at the time of purchase, which is equal to, or less
> than the merchant. It is the merchants choice.

How???? When you use your Mastercard, Visa etc., you aren't really
charging the item with the merchant. You are charging the item to a
charge card company and a bank administers that charge card. Merchants
who participate with these major charge cards must follow certain rules
and one of those is the conversion rate on charge purchases.

If I choose to buy a scarf in France, Ireland, or England I know the
price. It's publicly tagged/posted. As long as I am paying in the local
currency, my cost on the charge receipt will be exactly the same as the
publicly posted price. That doesn't mean that the final cost of the
scarf is the amount on the charge receipt. My bank -- my US bank -- will
convert the foreign currency into USD and add a foreign currency
transaction fee. But the merchant hasn't gotten involved in the amount
that will appear on my monthly charge statement.

>>The last sentence is also standard practice and is wholly unrelated to
>>transactions in foreign countries.
>
>
> It absolutely related to currency exchanges in foreign countries, the point
> of this discussion.

You've confused a transaction fee that the merchant pays to the bank
with the foreign currency fee that the consumer pays to the bank.

The first fee has nothing to do with currency exchanges. Every merchant
everywhere in the world pays a small percentage of every transaction to
the charge card company regardless of who made the purchase. That
percentage is deducted by the bank from the price on the charge receipt.
The percentage doesn't vary by currency, although it does vary by card.
(Many merchants won't accept American Express since it charges them a
higher percentage of each transaction.)

Merchants are willing to give a small percent of their income back to
the charge companies for the benefit of increased business (charge
purchases are convenient for customers) and financial security (the bank
guarantees the merchant will be paid for customer purchases).

Again, this has nothing to do with charging an item in one currency and
paying for it in a different currency.

The foreign transaction fee is the surcharge that gets added to a
customer's monthly charge statement because the bank has had to convert
an amount in one currency to USD before posting the transaction to the
customer's account.

And just to bring this back to the OP's message. If a person buys
something in a foreign country, but has it charged in USD, the person
ends up paying two rather than one foreign transaction fees. The first
occurs when the USD gets converted to the local currency and the second
occurs when the foreign currency gets converted to the US currency.

Karen Selwyn

Frank from Deeetroit wrote:
>
> This is real simple. The xe.com rate changes by the hour, like the bank
> rate. The merchant wants to stay ahead of any rate change by charging the
> customer a rate a little bit more than that daily changing rate.

Contrary to what you've written, the merchant has no involvement with
the exchange rate on charge purchases. The international bank associated
with the charge card transmits the transaction to the US domestic bank.
That US bank establishes the USD cost of the purchase based on both the
day's exchange rate and any bank surcharges for foreign transactions.

> A merhant can charge you more to exchange currency than the bank because
> they have to "batch" or close their credit card charges at the end
> of their day of business.

You aren't exchanging currency when you purchase something at a store in
a foreign country. You're purchasing in their local currency. It is only
when those charges get processed by your domestic bank that the foreign
currency gets converted into domestic currency.

I've devoted as much of my time as I chose to this issue. We'll simply
agree to disagree.

Karen Selwyn

Answered Inline:


"Rosalie B." <gmbeasley@> wrote in message
news:9th8c2d7h5q24hr3r8ji4fvdep6md8gpf2@...
> I'm not sure about the money market part of it, nor do I know about
> your ATM card. I've never had a debit card, and I've only used an ATM
> once or twice with a bank issued VISA to see if I could. We have two
> different banking institutions, and while almost all the accounts are
> joint, Bob uses the checks of the bank, and I use checks of the Credit
> Union account.

Rosaly,
I talked to the credit card division of our credit union and found out that
the debit card would draw money out of our checking account if I used it and
for no fee...If I went over the amount in checking, they would automatically
transfer funds from my savings account into my checking account, three times
in a month without a fee..But they will not transfer from my money market
for charges made on my debit card...I am allowed to transfer only two times
from my money market to any of the other accounts each month..So the best
thing for me is to just transfer a sizeable sum into my checking account
from my money market before we leave...Then just transfer what is left back
to M/M when we return, as it pays higher interest.

I also found out that there is a 1% fee for using the using the ATM
internationally..He said that the 1% was not received by the credit
union...that .20% of the 1% was a conversion fee and .80% of the 1% was the
across border's fee.
The limit on my Master Card Debit card used in the ATM was $500. a day...If
used as a credit card it was $3000.a day. So my card can be used as a debit
or credit card....I'd rather just use my regular Visa card for charges while
in a foreign country and the debit card at the ATM for extra cash when/if
needed.

--Jean