Money – Credit Cards and Debit Cards

Money is one of the biggest concerns when traveling internationally – do I bring cash? traveler’s checks?  credit or debit cards?  Do I need different currencies for different countries or will they take my American money?  Most importantly, how do I keep my money safe?

Dealing with money is actually not that difficult.  Let’s start with the basics.

Credit, Debit, Cash or Traveler’s Checks?

The best way to handle money in Europe or another international destination is to use a credit card and a debit or ATM card.  Traveler’s checks are a thing of the past.  You will likely have trouble finding a place to cash them, and when you do, you will be charged a fee.

Euros - Paper Money and Coins
Euros – Paper Money and Coins

It is possible to get foreign currency in the States, but again, you will pay a fee, and not all banks provide this service. Mine doesn’t.  Since I travel often, I routinely come home with 50 or more Euros, so I have it to start my next trip. Although this adds convenience, it is not necessary.  It is not difficult to get cash as soon as you arrive in Europe.  A few places might take American cash, but you will usually get a poor exchange rate – leave your dollars home.  (Occasionally, you may find a better rate for American cash if the country is experiencing some political instability).

Many – although, not all – places in Europe accept credit cards for payment.  I use a credit card whenever I can.  (See below for advice on choosing the right card). I don’t like carrying cash and I like having a record of my purchases on my credit card statement.

It is necessary to have a debit card or some kind of card that can get cash from an ATM.  I actually have a credit card that works as an ATM card and charges no fees, but this card is no longer available for new sign-ups.  If you have a no-fee credit card already, you can use that, but if not, you will need a debit card. (Again, see below).

Call Your Bank

No matter which cards you use, be sure to notify your bank that you will be traveling.  If you don’t travel out of the country often, your bank might think that your card has been stolen and put a hold on your card.  You don’t want to have to call from Europe to get you card reinstated.

Your bank will want to know your dates of travel and at least one of the countries you will be traveling in.  You can often set up your travel notification online, but if you’d rather talk to someone in person, you can call.  I recommend doing this a week or two before you leave.

Different Currencies

While many countries in Europe use the Euro, there are several that do not.  At this time, nine members of the European Union (EU), including the United Kingdom (British pound) and some Eastern European countries, do not.

There are also some European Countries that are not members of the EU. Norway (krone) and Switzerland (Swiss franc) are on this list.  Double-check if you are not sure.

If you travel from Austria to Switzerland, for example, you will need to stop at an ATM to get francs or go to a bank to exchange money.  Some Swiss stores may take Euros, but the exchange rate will not be as good as at a bank.  This doesn’t have to be a problem as long as you plan ahead.  At least twice when we had stopovers in Switzerland, we planned to store our luggage in the lockers at the train station.  We scrambled a bit for change for the lockers, but were able to get what we needed so we could walk around the cities luggage-free.

Keeping Your Money Safe

I have not been pick-pocketed in Europe…yet.  I like to think that it’s because I carry my money safely.  On my Travel Product Recommendations page, I have a link and description of the neck wallet that I use.  I keep most of my money, my credit cards and my passport in this neck wallet under my shirt.  I can access it discreetly if I am traveling with someone else or I can go into a restroom to get what I need for a particular purchase.

The same precautions for ATM use apply in Europe as apply in the States – shield the pin pad when entering your number, be aware of your surroundings, and do not use a machine that you suspect has been tampered with.

In addition, some ATMs in Europe – especially those in airports or train stations – are operated by an independent company and not connected with a bank.  These machines often give lousy exchange rates.  You will get a much better rate using a bank-branded ATM.  If you must use a non-bank ATM, withdraw enough to get by until you get into the city where you shouldn’t have trouble finding a bank ATM.

Be Aware of Fees

When choosing a credit or debit card, be sure you get one that does not charge a foreign transaction fee.  Most premium cards (ones that charge an annual fee), all Capital One cards, and some other cards do not charge this fee.  The popular Chase Freedom card, does.  If you aren’t sure, ask your bank or credit card provider.  The foreign transaction fee is usually 3% – on a $3000 trip, that is $90. I’d rather spend that money on a couple – or three – nice dinners.

If you use a credit card as your ATM card, be sure your card does not charge a cash advance fee.  Many debit cards charge an ATM fee, although it may not be as high as the one on a credit card.  Whichever card you use, just be aware of the fees.  If there is a “per transaction” fee, it makes more sense to withdraw a larger amount of cash a couple times, than to make several smaller withdrawals.

Chip and Pin

You have probably heard about the transition to “chip”, or “chip and pin” cards, and wonder how it affects you.  We are still working on this transition in the States, but in Europe, consumers have been using chip and pin cards for awhile.  Do you need one?  Maybe.

I would recommend getting a chip card before you travel abroad – although you may already have one.  Many of the credit card companies that I have accounts with have sent me chip cards over the past couple of years.

Note, though, that many of these cards are “chip and signature” cards.  Rather than ask for a pin number, the merchant will ask for your signature.  In most cases, a chip and signature card will work fine.  In restaurants, hotels, museums or other places where someone helps with your purchase, you will not have any problems.

If you try to use your chip and signature card in a kiosk or toll booth, however, it will not work.  If you rent a car, you should have a chip and pin card or you may need a lot of coins.  Tolls (on the many toll roads) can often be as high as 15-20 Euros.  Unfortunately, the only chip and pin credit cards I know about at this time are the Barclay Arrival (free) and Barclay Arrival Plus (fee).  Again, plan ahead; if you will be driving you may want to look into this card.

Getting Cash

What cards do I recommend, then?  In order to get cash in Europe, I would recommend opening a Schwab High Yield Investor Checking  account and using the ATM card from that account. Schwab does not charge a foreign transaction fee and will rebate all ATM fees worldwide, so there are never any ATM fees to worry about.  (My daughter used her card in Europe, but also Japan, Australia and New Zealand).

With the Schwab card, you earn interest on the money you have in your account, so its a good place to stash your vacation fund.  This is not a “travel card” in that it does not earn points or miles.  You can use the card for hotel rooms, restaurants, or purchases as long as you have money in your account to cover them.  An added benefit is that the Schwab card works as a chip and pin card, so it may be the only one you need.

As I mentioned above, I have a credit card that works as an ATM card.  It does not charge a foreign transaction fee or a cash advance fee,  It does, however, start charging interest from the time of the cash advance, so if I want to avoid interest charges, I need to be diligent about paying the credit card balance as I travel.

Choosing a Credit Card
A Collection of Credit Cards
A Collection of Credit Cards

There are several travel cards – ones that earn points or miles on purchases.  Many of them charge a yearly fee, which needs to be figured against your spending patterns to determine whether the card is worthwhile for you.

I love my Chase Sapphire Preferred card, but I know it may not be the best choice for everyone.  It does not have a foreign transaction fee, but it has a yearly fee ($95).  I earn double points on all hotels and dining and my points can be cashed in or transferred to hotels and airlines for great deals on rooms or flights (nearly free).

The Capital One Venture card also has a yearly fee ($59) and no foreign transaction fee.  The Venture card earns double points on everything, but the points can only be used for travel.  There are other Capital One cards that do not charge yearly fees ($0) and none of them charge foreign transaction fees, so if you are not interested in earning points or miles, these are cards to consider.

The Barclay Arrival Plus is similar to the Venture card in that it earns two points per dollar on everything and the points must be used for travel reimbursement.  It has no foreign transaction fee and a yearly fee ($89), but it also comes with chip and pin as mentioned above.

The Discover It Card does not charge an annual fee or foreign transaction fee. Discover is not as popular in Europe, though, so it may not be accepted everywhere.  I recommend leaving it home – you don’t need to carry more cards than necessary.

The Bottom Line

Talk to your bank or credit card provider several weeks before you travel.  If you will be charged fees, you might want to think about getting a new credit or debit card.  It takes some time to open an account, so plan ahead.

Then, remember to let your account providers know that you will be traveling. Research and preparation brings peace of mind so you can thoroughly enjoy your trip.

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