"No turn is a wrong turn"
Your Trip, Your Money, and Your European Trip Planning
While a previous Bill’s Backroads column was written on trip planning to include emergencies for medical, contacts back home, etc (Bill’s Backroads #11 - Emergency Plans and Communications / Emergency Kits), this column will be geared toward the FINANCIAL aspect of travel to Europe. It’s probably more than you ever wanted to know, and it’s still a short story as to real in-depth financial matters of travel. Don’t worry….You’ll learn more as you go….. it’s easy.
Travel Cash vs. ATM Card – Credit Card – Bank or Travelers Checks
Today, you carry travel cash in U.S. Dollars (USD) to basically pay for airport food, parking, etc. while still in the U.S. both going but not yet in-flight, and on your return. I trust you can judge those funds. Just don’t think of the USD CASH as having the same purchasing power in Europe, for reasons you’ll read later.
The Euro (€) – What is it?
The Euro is the currency of the European Union (EU). As you all probably know by now, the Greater European currency is the Euro (EUR or symbol € ). No more Deutsch Marks, French Franks, Austrian Schillings, Dutch Gilders, etc. The EUR (€) is the currency of 12 European Union (EU) member states: (Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, and Spain); three European micro-states: (Monaco, San Marino and the Holy See-Vatican City), as well as EU institutions. Notice that two major tourist favorites are missing: Switzerland, which still uses its own Swiss Franc (CHF), and United Kingdom of Great Britain and Northern Ireland, which still uses the UK Pound Sterling (£)
What does this new EUR money look like? Below are some sample web links for more info. Sample coins can be found at euro coinage – Sample of paper bills, Depiction of euro banknotes
First of all it’s easy to understand the Euro. The € (Euro) is divided into smaller € cents, just like our U.S. Dollar. 100 Euro cents = 1 Euro. ½ Euro = 50 Euro cents. Etc.
Now to see what the Dollars vs. Euro is worth today, here’s one of my favorite sites: www.oanda.com, the currency site. When you open the site, at the top of the first page you’ll see
|
Quick Converter |
US |
Euro |
Convert |
FXConverter
- 164 Currency Converter Results
Sunday, January 23, 2005
1 US Dollar = 0.76959 Euro
1 Euro (EUR) = 1.29940 US Dollar (USD)
Median price = 0.76929 / 0.76959 (bid/ask)
Minimum price = 0.76628 / 0.76646
Maximum price = 0.76929 / 0.76959
This DAILY dual calculation is great for different mindsets.
For example, if you think:
How many € is the equivalent of one US Dollar? The answer above is 0.76959 €
Therefore if you exchange $300.00 into Euros, you’ll get approx. € 230.87 (before exchange fees and charges – read
on.)
OR, if you think:
How Many US Dollars is the equivalent of ONE € ? The answer: 1.29940 USD
Now, let’s take that souvenir you really want priced at € 300. What will it cost in US Dollars? The
answer: $389.82
What are the some different ways to obtain foreign currency for your trip?
In today’s world, I consider the best, safest, most convenient and least expensive means of obtaining foreign currency to be the ATM machine in your countries of travel. Below I explain my reasons. Having an ATM card is like having my own 24 hour bank with me keeping my money safe as I travel, and I only make withdrawals when I need them. In fact, I consider the ATM as the best way - by far - to receive your best rate of exchange for your money, at no or low additional costs to you.
Poor Choice: Carry USD Cash to convert to Euro on arrival.
Cash is probably the least favorite of all well traveled Americans, both for business as well as personal travel. High exchange rates and fees – when you find places to exchange your $ into €, coupled with the possibility of losing the cash to pick pockets or to accidents, all equal too high a price to pay for this inconvenient currency mode.
Poor Choice: Buy € from your bank and carry with you before you leave.
Not too good an idea in my opinion. First of all your bank must be large enough to have an international dept with a correspondent bank or branch office in the EU. Your bank will charge you conversion fees and high exchange rates that make such actions not thrift worthy (dollars to Euros and visa versa, EUR to USD). See below. Also it will take your U.S. bank a couple of days to get the Euros to your local banking office for you to pick up. Just remember, you won’t need the Euros until you land in Europe and from my experiences, I’ve found ATM machines in each and every airport lobby, well marked, numerous, and easy to use. Also, too much cash and you’re a prime target for pick pockets!
Poor Choice: Buy € or $ Travelers Checks at your bank to convert in Europe.
Not too good an idea in my opinion. One small good point is they allow you to have “protected” emergency funds in the event you loose all your CC and ATM cards. And if you bring them home unspent, you can pay off your credit cards with them. Please note that only U.S. banks with international depts. and corresponding or branch EU banks will offer this service in Euros. This is basically another form of cash. See my “NO” reasons below.
Wire Money via American Express or similar??
You can’t be serious…right? That went out years ago. It’s so expensive, and try finding the correct AMEX office in the Euro community where you need the money... instead, just go to a local bank, have them call your banker in the U.S. and get your banker to wire you some funds via that Euro Bank. You do know your U.S. banker, right? Take his phone number / name in your MONEY BELT. Or, call Mom and Dad if you’re under 20.
BEST CHOICE: Use ATM Cards (NOT debit cards) as you travel for obtaining € CASH.
ATM cards save you, the traveler, in two (2) ways at least. First, there is NO currency exchange service charge (usually from 7 € to 15 € up on cash and bank or travelers check exchanges) and the rate of exchange for the ATM vs. the money changer will save you another 5% to 7% of the total. Based on the $300 exchanged above, you’d save about $30 to $40 dollars in fees EACH time you converted your $ money to Euros. While most European ATMs do not charge exchange fees, your bank at home may charge you a fee each time you use the ATM. While my preferred bank charges me nothing, one of my banks charges me $1.50 per ATM debit. We had another big-name bank that charged us $5.50 to $7.50 per debit… we left that big bank in a hurry!!!!! Check with your bank’s INTERNATIONAL dept, or with the Bank President to verify your bank’s ATM charges on European ATMs.
What is the basic difference between an ATM card and a Debit Card?
The BASIC difference is the ATM card will only work in ATM machines that honor the ATM banking associations listed on the back of the ATM card. While a DEBIT Card will usually work in an ATM machine, it can also be used in retail purchases very much as your Visa or MC credit card. Both the ATM and the Debit Card purchases come immediately out of your checking account assigned to that Card! Although you will likely have a Visa or MC logo on the Debit Card, don’t be confusing that card as a “credit card” because it’s not. The Visa or MC relationship is simply the bank clearing house that processes the Debit Card Purchases. For more detailed info, please refer to your own banking institutions.
Problem:
Your bank has daily maximum limits on your ATM withdrawals (usually $300).
SOLUTION:
Call your Bank that issued your ATM card to find the correct person / dept to notify, and authorize them IN WRITING
to INCREASE your daily ATM limit, FOR THOSE DAYS YOU’LL BE ON YOUR TRIP - only! Give a begin date and an
ending date, and the fact you’ll be in Europe. Then sign it.
Side Note: This is also good in the event of an emergency – Most European hospitals will not take Credit Cards or Checks from the U.S. and will only accept CASH in Euros. For this reason, when I go to Europe, I increase my ATM daily max to maybe $1,000 per day, and then drop it back to the $300 per day when I return home.
Problem:
Sometimes (rarely but it happens) your ATM card might not work in a few foreign ATM machines.
SOLUTION:
Don’t keep trying, as that ATM may “eat” your card. Go down the street to another ATM machine with a different
bank. Chances are it’ll work there. Also it’s a good idea to take two (2) ATM cards from separate banks
and hopefully different “credit member services”. Or if traveling with a spouse or friend, make sure you
EACH have an ATM card – at least one each. Some older European ATM machines do not accept cards with pin
numbers starting with the NUMBER 0, and they ONLY ACCEPT NUMBERS for the Pins on the ATM cards, as their ATM machines
don’t normally have letters on the keys. If the machine eats your ATM card, you’ll have to contact the Bank
owner of that machine to request the return of your ATM card. Don’t hold your breath that you’ll get it back!
Use your ATM card wisely. Only pulse out what you estimate you’ll need for the next two or three days, put
one day’s spending money in your pocket, and the rest in your Money Belt which you should wear UNDER your clothes
around your waist for best protection.
Credit Cards
I find MasterCard (M/C) and Visa, in that order, are the most often received cards in Europe - especially in the small back roads towns and villages. Personally, I take one of each. Don’t take Discover Cards… haven’t seen them over there. Amex and Diners Club? We have friends that use them. Many places take them, but from our experience they’re not nearly as popular in the small towns and outlying areas as the M/C and Visa.
Credit Cards are good for travel for all the obvious reasons, and if “both your ATM cards get eaten” or your pockets get picked – and they didn’t take your credit cards because they were in your MONEY BELT – then you can feasibly go into a bank a “buy some money” on your charge card... at a price!
Important rule for using your credit cards before making international charges. I strongly suggest calling the customer service dept of each of your credit card and ATM card companies and telling them you’ll be making some charges and transactions in Europe…. or Germany, Switzerland, Austria, etc over the next couple of weeks. These days, most credit card companies are refusing payment on “out of the norm” charges based on your “normal” spending habits. That I can attest to from personal experience!
How Much to Pulse out at a time, and how much to carry in my pocket?
This is strictly personal and depends on your budget and spending habits, where you travel in Europe, cost of your travel items, etc. I like about 3 days worth of spending money, i.e. the equivalent of $300 to $400 USD. Since many small eating establishments do not accept credit cards, I carry cash to eat at these places. Also, sleeping accommodations such as small rooms, Zimmer, Bauernhöfe, Ferienwohnung or Ferienhaus, and other sleeping accommodations usually take cash only (see http://www.bensbauernhof.com/farms.html for some great examples!). Larger pensions and hotels will usually take Visa / MC credit cards. Historical sites, tours, museums, etc usually charge for entry. Estimate 10 € pp average. As frugal independent travelers, my wife and I try to hold a normal AVERAGE days expenditures to $100, or about 80 €, and we can get pretty close to that with our experiences. That’s room, food, gasoline, entertainment (castle tours, etc) and a couple of Bier each with our meals. That includes picnics and food-on-the-go. We have friends who can travel on ½ to ¾ of our budget and still have an exciting blast!
Bottom Line
Here’s hoping you do understand that Euro are REAL foreign money and not “funny money.” (I learned the hard way in college years ago when our UT Men’s Glee Club toured Mexico. In one night of poker, using Mexican Pesos – worth a cheap $0.08 ea. at the time – and playing those “match the pot” poker games, I lost three hands and it cost me $180 USD. Way back then, that was big money – probably equivalent of $500 today - and it also was my previous nights poker winnings as well as my remaining travel money for the next 5 days. I was broke! Never again would I ever think of a foreign currency as “funny money.”)
Last bit of advice
1. Take a Money Belt and WEAR IT under your clothes at all times.
2. Do NOT stuff your MONEY BELT in your pocket - WEAR IT at all times.
3. Do NOT stuff your MONEY BELT in your purse - WEAR IT at all times.
4. Do NOT leave your MONEY BELT in your suitcase or backpack!
5. I prefer to carry my daily money and one credit card in a money clip in my front pocket. My rear pockets are empty. My cameras, film, water, etc are in a “day pack” over my shoulder, or in the pockets of my multi-pocketed travel jacket.
6. If you can’t find a Money Belt, even at WalMart, click on this site: Rick Steves money belt
7. If your plans include Paris and you plan to ride the METRO, and you are NOT wearing a Money Belt under your clothing, I can only suggest you safety pin under your collar a note with your U.S. bankers telephone number so you can call for immediate emergency money to get you home………. Your pocket will stand about a 40% chance of being picked on the Paris METRO.
Once again this money column is probably more than you ever wanted
to know. Rest assured you’ll only have to read it once. If you’re a parent attempting to help your
student traveler on her or his first international trip, print this out and give them a copy. If you’re helping
your retired parents plan for a trip to Europe, give them EACH a copy of this, and explain to them what an ATM
card is and just how it works. Remind them to always take their card AND cash AND receipt from the ATM after
using it.
Travel Wisely. Travel Safely. Travel Healthy.
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