Planning a trip to Europe? One of the first things on your mind is likely getting your hands on euros. While ATMs seem like the most convenient option upon arrival, understanding the costs and potential risks associated with them is crucial. Let’s break down how to get the most out of your dollar when converting to euros, especially if you’re just looking to start with around 0 In Euros.
Understanding ATM Fees When Withdrawing Euros
When you use your ATM card in Europe, you’re likely encountering a “Network” charge, typically around 1% of the transaction. This is a fee levied for processing the international ATM transaction and currency conversion. However, not all banks pass this fee on to you in the same way.
Some financial institutions, like Capital One and Schwab, are known for absorbing this 1% network charge. This means you get a near-perfect exchange rate, essentially paying no extra fee beyond the standard exchange rate when you withdraw euros from an ATM.
Many credit unions and smaller local banks will simply pass on this 1% network charge directly to you. So, for every $100 equivalent you withdraw in euros, you’ll effectively receive 99% of that amount after the network fee.
On the other hand, most major banks, such as Chase, Citi, and USBank, operate differently. They typically pay the 1% network charge but then add their own profit margin, often around 2%. This results in a total charge of approximately 3% when you use their ATM cards to get euros in Europe.
Banks like Wells Fargo and Bank of America offer another option: buying euros directly before you travel. They generally sell euros at about 5% above the current exchange rate early each morning. While this might seem high, consider this: if you were to use a typical major bank ATM card in Europe and incur a 3% charge, buying euros from Wells Fargo or BofA beforehand means you’re only paying about 2% (5% – 3%) more than that ATM transaction.
The Convenience vs. Risk of Waiting to Get Euros at European ATMs
The common advice is often to “just get euros from an ATM when you land.” While convenient, this approach carries some potential risks, especially if you’re a first-time traveler to Europe.
Getting Euros ahead of time is expensive and unnecessary. Get them from an ATM when you land
However, paying a small premium to have some euros in hand before you go can be seen as inexpensive insurance against potential problems. For example, spending an extra $2 for every $100 converted might be a worthwhile price for peace of mind.
If you’ve never used your ATM cards in Europe before, you can’t be absolutely certain they will work. Even if you have traveled to Europe previously, relying solely on ATMs upon arrival can be stressful if your cards are declined.
Imagine arriving at Frankfurt Airport (FRA), as one traveler experienced in 2004. Despite having used Wells Fargo and Chase cards successfully in Europe a year and a half prior, and even possessing a new card from a local bank, the first two cards were declined at a Deutsche Bank ATM. Fortunately, the Wells Fargo card eventually worked, but the initial moments of uncertainty highlight the potential for unexpected issues.
The bottom line: Unless you have recent, confirmed experience using your specific ATM cards in Europe, assuming they will work flawlessly upon arrival is risky. For a relatively small amount like $100 in euros, obtaining some currency from your bank before your trip provides a safety net and can save you from potential stress and inconvenience. Having a bit of cash on hand when you land is a prudent step for any traveler.
