Question
Last week, I went to an ATM in Israel and within the space of a few minutes made two cash withdrawals: both for 100 shekels, one using my BoA debit card and the other using my BoA credit card.
Based on the Universal Currency Converter, a flat exchange rate of that date would have cost me $21.97 for each.
Actual costs:
Debit card: $22.09, plus $5 withdrawal fee, plus $0.21 international transaction fee. Total: $27.30.
Credit card: $21.98 plus $10 "Finance Charge". Total: $31.98.
As the ATMs here allow a maximum 2000 shekel withdrawal, even the largest withdrawal wouldn't justify using the credit card (unless you actually need the credit). Although the difference grows smaller as the withdrawal grows larger, the 2000 shekels on the debit card would still cost $449.60 as opposed to $451 on the credit card.
Answer
Last week, I went to an ATM in Israel and within the space of a few minutes made two cash withdrawals: both for 100 shekels, one using my BoA debit card and the other using my BoA credit card.
Based on the Universal Currency Converter, a flat exchange rate of that date would have cost me $21.97 for each.
Actual costs:
Debit card: $22.09, plus $5 withdrawal fee, plus $0.21 international transaction fee. Total: $27.30.
Credit card: $21.98 plus $10 "Finance Charge". Total: $31.98.
As the ATMs here allow a maximum 2000 shekel withdrawal, even the largest withdrawal wouldn't justify using the credit card (unless you actually need the credit). Although the difference grows smaller as the withdrawal grows larger, the 2000 shekels on the debit card would still cost $449.60 as opposed to $451 on the credit card.
Wouldn't credit card cash withdrawal accue interest charges?
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Wouldn't credit card cash withdrawal accue interest charges?
I don't know. I would have thought that $10 "Finance charge" would cover that at least until the end of the month.
In any case, I can't see myself ever using the credit card at an ATM after making this experiment.
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What about something like this:
https://us.etrade.com/e/t/jumppage/viewjumppage?PageName=unbeatable2&tb=3555
E*TRADE Bank will not charge you a fee for withdrawing funds from any ATM but the owner/operator of the ATM may. This feature will refund the fees charged by the ATM owner/operator on all ATM fees. In the event of fraudulent or clearly excessive use of the feature on a given account, E*TRADE Bank reserves the right to remove the feature. As of 9/14/05, the 3.65% introductory APY is among the highest yielding money market accounts listed on bankrate.com.
Answer
Last week, I went to an ATM in Israel and within the space of a few minutes made two cash withdrawals: both for 100 shekels, one using my BoA debit card and the other using my BoA credit card.
Based on the Universal Currency Converter, a flat exchange rate of that date would have cost me $21.97 for each.
Actual costs:
Debit card: $22.09, plus $5 withdrawal fee, plus $0.21 international transaction fee. Total: $27.30.
Credit card: $21.98 plus $10 "Finance Charge". Total: $31.98.
As the ATMs here allow a maximum 2000 shekel withdrawal, even the largest withdrawal wouldn't justify using the credit card (unless you actually need the credit). Although the difference grows smaller as the withdrawal grows larger, the 2000 shekels on the debit card would still cost $449.60 as opposed to $451 on the credit card.
What about using ATMs in foreign countries to get local currency, drawing on your checking or savings account at home? How do the costs work out with that approach to spending abroad (i.e., good exchange rates with no % or added fees other than the flat per use one, if any, imposed by your bank at home for any withdrawls from another banks ATM)?
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What about using ATMs in foreign countries to get local currency, drawing on your checking or savings account at home? How do the costs work out with that approach to spending abroad (i.e., good exchange rates with no % or added fees other than the flat per use one, if any, imposed by your bank at home for any withdrawls from another banks ATM)?
That's exactly what I was talking about -- using my American ATMs in Israel to get Israeli shekels.
It would have been less expensive to just buy with the cards.
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Sounds like you just need to find a bank that doesn't charge the $5 "withdrawal fee."
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Sounds like you just need to find a bank that doesn't charge the $5 "withdrawal fee."
The withdrawal fee was charged by Bank of America, not the Israeli bank.
Actually, the only reason I did this was curiousity. If I want shekels I use my Israeli Visa and if I am in a Euro Zone country I use a debit card from Deutsche Bank and when the day's limit on it is up switch to a Deutsche Bank MC.
About the only two places I have exchange money anymore are Turkey and Switzerland (I almost never get to Britain).
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That's exactly what I was talking about -- using my American ATMs in Israel to get Israeli shekels.
It would have been less expensive to just buy with the cards.
We may be talking about close, but different things. You said that you made a side-by-side comparison of your BoA "debit card" and your BoA "credit card" to take money out of an ATM in Israel. I presume that BoA "credit card" was a VISA or an MC, and I don't know how your "debit card" works. (I have never had any interest in debit cards, since I never perceived an advantage to them of any sort, at least to me.)
When I asked about the experience of others using ATM cards, I didn't have in mind using either "debit cards" or "credit cards" to pull local currency out of ATMs when abroad, but rather using the same card that I use here at home to pull cash out of ATMs. Here at home I incur no charges other than what a bank other than my own might impose as a flat per transaction fee (e.g., $2 whether you take out $20, $100, or $400, no % of the transaction), and my own bank does not impose any charge on these transactions.
I believe that I have not "lost" anything going to ATMs abroad, though perhaps I have to go back and scrutinize my account statements to see if they are taking some "vigorish" out in a less obvious way, e.g., burying it with the exchange rate. But I don't keep track of how much cash I pulled in the local currency, so I might later match that up with came out of my checking account back here and calculate what rate I received.
If I were to "test" the approaches for myself, as perhaps I will do the next time abroad (IAD to PVR within the month?), then my side-by-side comparison would be X in local currency charged to credit card vs. X in local currency pulled out of ATM with the card I regularly use to access my accounts here at home, not with a "debit card" (which I don't have) in the ATM or a "credit card" in the ATM. Then I would be closer to the answer I am seeking, namely why not deal in cash, relying on ATM transactions drawing directly from one's bank account at home rather than going with charge cards with their added measure of "vigorish" (3% surcharge for currency exchange).
[And are you sure that the difference between "debit card" withdrawal from ATM vs. credit card withdrawal would grow smaller rather than larger as the amounts involved increased? It wasn't clear what were variable costs and what were fixed ones with each option other than the $5 and $10 components. Someone else asked about interest charges with the credit card option, both a variable and continuing rather than one-time charge. Of any option, I think pulling money from an ATM with a credit card, here or abroad, must be the least attractive.]
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The withdrawal fee was charged by Bank of America, not the Israeli bank.
While it is routine for banks to charge per transaction fees of $1.5-2 for with use of their ATMs by non-account holders, I have never encountered foreign banks doing it (most recent experiences with Holland and Uruguay). Have others encountered this when abroad (outside US)? (The $5 BoA hit you with strikes me as excessive. Do they do that whenever and wherever you pull money out, or was it more because you were overseas? I do wonder how representative your experience with BoA was of US banks generally.)
Actually, the only reason I did this was curiousity. If I want shekels I use my Israeli Visa and if I am in a Euro Zone country I use a debit card from Deutsche Bank and when the day's limit on it is up switch to a Deutsche Bank MC.
About the only two places I have exchange money anymore are Turkey and Switzerland (I almost never get to Britain).
What is different about those two countries, especially the latter (Switzerland) that you chose to "exchange money" (go to a bank teller or currency exchanger?)? I can only see going other than the "mechanical" route (charging with credit card or pulling money from ATM) in places where I might get a better rate in the street ("black market") and it has been a while since I was in that situation (January 2002 in Argentina, when local currency was cratering). Is there a reason to go about things differently in Switzerland or Turkey, two places I have not visited in over a decade, though both my wife and I would like to go back to Turkey?
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Correct me if I am wrong, but it is always better to get cash from a Debt Card than a Credit Card. The Credit Card charges a "finance charge" and starts to accrue interest immediately, since there is no grace period for cash advances. Most credit cards that I know of only allow grace periods for purchases, not cash advances or balance transfers.
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Itsme, I really can't tell you any more than I did. I don't know if variables would have been involved had I made larger withdrawals.
By "exchange money" I did not mean going to a money changer. I meant using a debit card or a credit card based on a different currency. If I go to an ATM in Lugano, I don't have the possibility to use a debit card from a Swiss bank (I am not rich enough to have a Swiss bank account).
I also don't visit Turkey often enough to make it worth my while to have an account there.
The absolute cheapest way for me to buy in any Euro Community country is for me to use my German credit card to pay (as opposed to getting money from an ATM). There are no charges at all. The next best way is for me to use my German debit card to get Euros at an ATM -- I only pay a small fee for the ATM use (and none if the bank is allied with Deutsche Bank).
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Correct me if I am wrong, but it is always better to get cash from a Debt Card than a Credit Card. The Credit Card charges a "finance charge" and starts to accrue interest immediately, since there is no grace period for cash advances. Most credit cards that I know of only allow grace periods for purchases, not cash advances or balance transfers.
FWIW, I think you are right about credit card advances. But is the cheapest way to go to rely on cash taken from an ATM with the same card one uses routinely at home to pull money out of one's checking or savings account? (I am not referring to a "debit" card, that allows a merchant to draw directly from your account to pay for purchases of goods or services.)
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Itsme, I really can't tell you any more than I did. I don't know if variables would have been involved had I made larger withdrawals.
By "exchange money" I did not mean going to a money changer. I meant using a debit card or a credit card based on a different currency. If I go to an ATM in Lugano, I don't have the possibility to use a debit card from a Swiss bank (I am not rich enough to have a Swiss bank account).
I also don't visit Turkey often enough to make it worth my while to have an account there.
The absolute cheapest way for me to buy in any Euro Community country is for me to use my German credit card to pay (as opposed to getting money from an ATM). There are no charges at all. The next best way is for me to use my German debit card to get Euros at an ATM -- I only pay a small fee for the ATM use (and none if the bank is allied with Deutsche Bank).
Thank you for your answers. I don't think the side-by-side comparison that you did was very informative, however, for a number of reasons.
And I am frankly confused about not using a debit card at an ATM in Lugano because you don't have accounts in Switzerland. Isn't the whole point of this thread drawing foreign currencies against US $ accounts? A Swiss debit card presented to a Swiss ATM would yield Swiss francs drawn from a Swiss franc account, wouldn't it, with no foreign exchange involved.
If in the experience you cited with the BoA debit card at an ATM in Israel, we knocked out the $5 fee because some banks do not charge it, then it looks like the foreign exchange transaction (shekels for US$) was a very efficient one, with something like a 1% variable cost, if that wasn't part of the buy-sell spread on US$ to shekels.
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The absolute cheapest way for me to buy in any Euro Community country is for me to use my German credit card to pay (as opposed to getting money from an ATM). There are no charges at all. The next best way is for me to use my German debit card to get Euros at an ATM -- I only pay a small fee for the ATM use (and none if the bank is allied with Deutsche Bank).
When you are using your German credit card to pay in a Euro Community country, you are not engaging in any foreign currency transaction. And when you use that German debit card to get Euros, you are not engaging in any foreign currency transaction either.
I thought the point was how to finesse the excessive fees (I think 3% is definitely excessive, what I characterize as "vigorish") that American banks hit us with when we use our cards abroad. If that was not the point, then perhaps we have been talking about different things.
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Itsme, I only talked about the ATM in Lugano because you asked why I exchanged money in Switzerland and Turkey. I was showing that I don't physically exchange money but do it by going to an ATM.
I have no idea which American banks charge for withdrawals overseas. I can only say that I have a BoA Visa Platinum Check Card (which is what I referred to as my "debit card") and a BoA Visa Platinum Credit Card. These are the two I used for my comparison.
I know that Deutsche Bank has an arrangement with BoA that means I would not get charged for using my DB card at one of BoA's ATMs. DB has a similar arrangement with banks in a few other countries.
It is possible that all of these banks are in some mutual pact and that my BoA card would not get a charge at any of them but I don't know that for a fact.
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When you are using your German credit card to pay in a Euro Community country, you are not engaging in any foreign currency transaction. And when you use that German debit card to get Euros, you are not engaging in any foreign currency transaction either.
That is true, but in addition to the conversion charges, before the Euro went into effect DB used to charge me 1% for using my card in a foreign country. That, too, is no longer in effect within the Euro zone.
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FWIW, I think you are right about credit card advances. But is the cheapest way to go to rely on cash taken from an ATM with the same card one uses routinely at home to pull money out of one's checking or savings account? (I am not referring to a "debit" card, that allows a merchant to draw directly from your account to pay for purchases of goods or services.)
In most cases I think that using an ATM overseas is the best way to get your money without paying for high fees. Yes you're not going to get the best rate possible, but those are the transaction fees. Unless you are transferring large sums of money, in terms of millions, then you are going to have to pay a small fee. Credit cards are not the best option if you have a debt or ATM card. In my experience travellers checks are okay, depending on where you use or cash them.
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In most cases I think that using an ATM overseas is the best way to get your money without paying for high fees. Yes you're not going to get the best rate possible, but those are the transaction fees. Unless you are transferring large sums of money, in terms of millions, then you are going to have to pay a small fee. Credit cards are not the best option if you have a debt or ATM card. In my experience travellers checks are okay, depending on where you use or cash them.
Any reason to think that you will get a less favorable exchange rate taking X amount of foreign currency out of an ATM than charging X amount to your credit card? I doubt that banks have a different buy/sell for exchanges effected by withdrawals of cash through ATMs and charges to credit cards.
If you were transferring millions, you would be doing it bank to bank by wire. And in my experience, the maximal amount of cash you are allowed out of a bank account using an ATM is usually $500/day.
Travellers checks in $s leave you to exchange into the local currency somewhere, and you may be slightly advantaged when dealing with a high end merchant who wants to be generous because your business nets them so much, but more often you are disadvantaged, sometimes very much disadvantaged, exchanging them. (Travellers checks are not as universally welcomed as people might think, and in places they can be difficult to negotiate.)
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Any reason to think that you will get a less favorable exchange rate taking X amount of foreign currency out of an ATM than charging X amount to your credit card? I doubt that banks have a different buy/sell for exchanges effected by withdrawals of cash through ATMs and charges to credit cards.
If you were transferring millions, you would be doing it bank to bank by wire. And in my experience, the maximal amount of cash you are allowed out of a bank account using an ATM is usually $500/day.
Travellers checks in $s leave you to exchange into the local currency somewhere, and you may be slightly advantaged when dealing with a high end merchant who wants to be generous because your business nets them so much, but more often you are disadvantaged, sometimes very much disadvantaged, exchanging them. (Travellers checks are not as universally welcomed as people might think, and in places they can be difficult to negotiate.)
As far as I know it is all depend on your bank for credit card purchases or ATM withdrawls. There are several other forums that have already discussed this issue, so I would recommend using the search function of Flyertalk. You will have to look at the exchange rate and also foreign exchange fees (both of which differs from bank to bank). I usually charge as much as I can on my credit cards and only pay cash which it is the only option whether overseas or domestically.
I know that I my limit for an in-house ATM cash withdrawl is $10,000 per day, but I think that is also bank dependent and depends on how much money the ATM has. Now if it is regarding a foreign ATM, I know that I have personally been able to withdraw more than $1,000USD at a time. Again, this would depend on your bank.
But regarding your general question, I would use a Visa Debt Card connected to a bank account versus a Credit Card at any ATM. The only reason I could think of something using a Credit Card for a cash advance is if they do not have the funds available in their checking or savings account and that they can only use cash for their transaction.