
Here's the simple rule you need to know when using a foreign ATM - syc
http://transferwise.com/blog/2012-11/choose-local-currency-at-foreign-ATM
======
Nursie
Ah yes, DCC.

On the positive, it lets you know (probably) how much you're going to spend,
in your own currency. I say 'probably' because you might get hit by fees from
your own bank for using an overseas ATM as well. But it's not free.

So you could look upon it as being offered a paid service, and IMHO it
shouldn't be used without the customer being made aware of this.

The reason you will be asked if you'd like to pay in your currency is not
really anything to do with your convenience though, it's about who gets to do
the conversion and who gets to pocket the (inevitable) fees. With DCC the
merchant and their (acquiring) bank get to take the fees and set the rates.
Without this, your (issuing) bank does. At some point one of the acquiring
banks realised that they get to see the transaction before it gets back to the
issuing bank, and so they have the power to do this stuff, so DCC was born.

\--EDIT-- I should say it's possible, however unlikely, that DCC could turn
out cheaper. The article does give a great reason why this is unlikely though
- if there's one set of people more eager to screw you over than your own
bank, it's someone else's bank.

~~~
larsberg
> you might get hit by fees from your own bank for using an overseas ATM as
> well

Check with your bank before you travel. I'm with Citibank, and they have a
bunch of packages that they can enable on your account for free that remove
foreign transaction fees (e.g., if you're a student; if you have more than 50k
in cash; if you have a mortgage with them; etc.).

But, it being a bank, it's not like they're going to enable that stuff unless
you ask for it first, and don't even think about getting it waived when you
get back...

~~~
orofino
The best bank for this is Capital One. We signed up for cards (both debit and
CC) for our overseas travel only. We haven't had them charge us a single time
to date.

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Spooky23
There's an even simpler rule: The more convenient currency conversion is, the
more you are getting ripped off.

~~~
gabemart
>There's an even simpler rule: The more convenient currency conversion is, the
more you are getting ripped off.

That simply isn't true in my experience. For years, I used a debit card from
Nationwide in the UK to withdraw currency all over the world. They used the
VISA wholesale rate with no vig added on top and no fees for ATM use. In
total, I withdrew probably over ten thousand dollars on that card, and it was
one of the most convenient currency conversion systems I have ever used. (The
card now carries fees for the service).

On the other hand, going to a high street bureau de change would have been
much, much less convenient and would have secured me a worse rate in every
case. Traveler's cheques would have been both inordinately expensive and
hideously inconvenient. In fact, in the absence of a local bank account in
each country I visited, I'm still not aware of cheaper way to convert currency
than the system I used.

If you travel a lot and can find a bank or credit union that won't charge you
any fees, hidden or otherwise, you get great convenience and an excellent
price.

~~~
edandersen
> For years, I used a debit card from Nationwide in the UK to withdraw
> currency all over the world

Yep, you and thousands of others. Unfortunately expats ruined it for everyone
else, simply using it as a way to draw money from their UK accounts when
retired in Spain or wherever, never giving a penny to Nationwide. They
probably made a loss on each of these customers so they withdrew the service.

They really just charged the Visa wholesale rate for ATM withdrawals and
purchases abroad with no fees or markup or anything. It was fantastic.

~~~
ryankask
You should check if your bank is in the Global ATM Alliance
(<http://en.wikipedia.org/wiki/Global_ATM_Alliance>).

If I withdraw money from a Barclays ATM in London (or Deutsche Bank in Berlin,
etc) using my BofA ATM card, I don't seem to have an extra charges.

~~~
Osmium
This is true. It led to some bizarre situations though: my partner, wanting to
transfer money from her American BofA account to her British Barclays one,
would've had to pay a fee to do so directly. But walking two paces to the ATM
machine, taking the money out as cash, and then depositing the cash and you
can avoid fees. Always seemed weird to me.

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0x0
Same thing applies not only for ATMs, but also shops with card readers that
sometimes offer to charge you in your home currency.

~~~
joezydeco
Hotels will also do this if they know you're from another country. Always
checkout in-person at the desk and ask to review the bill before checking out.
Make sure the charges are in the local currency.

~~~
saryant
Hotels are also a great way to get rid of extra foreign currency right before
you leave the country. Ask them to put your remaining cash towards your bill
and put the rest on your credit card. Avoids having to convert cash twice.

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kalleboo
My home debit/ATM card also gives me a better exchange rate than any Forex
desk I've ever seen. Why do people still use those? Is it solely due to
familiarity with cash?

~~~
michaelhoffman
1\. Remarkably, some people are under the (incorrect) impression that they
will get a better rate at the bureau de change.

2\. Some people like to have local currency before they enter the foreign
country so they don't have to rely on finding a reliable local ATM before they
can spend cash.

~~~
kijin
2'. In many countries, as soon as you step out of the airport and/or a comfy
tourist district, cash is the only available payment method. Including the
cost of transportation to the nearest ATM. Which may or may not have a skimmer
on it.

~~~
Osmium
This is true in Japan. Trying to find an ATM that accepts foreign cards is a
nightmare. Post offices or 7-11s are the only reliable places.

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mapleoin
Except some foreign ATMs (e.g. Hungary) don't even show that dialog. They just
charge you the currency conversion.

~~~
masklinn
That is nasty as hell, and I'm surprised it's even legal: the expected default
would be to charge in the local currency and let the card issuer handle the
conversion.

~~~
travisp
Conversion without asking is actually against credit card merchant agreements
(and I assume the debit card agreements too, although I actually can't find
this anywhere). I wouldn't be surprised if you could complain to your bank if
what was reported here was actually true.

------
16s
One more rule... While you type your PIN, cover your typing hand with your
free hand to thwart card skimmer cameras. This won't prevent keypad overlays
from recording the PIN, but those are more expensive and more rare.

~~~
incision
Anecdotally, I've experienced 0 incidents of fraud linked to using foreign
ATMs, even those in questionable places. On the other hand, I've had several
incidents linked to handing over my card to servers in downtown US
restaurants.

One more rule...Never use an ATM in a strip club. They're the lords of
exorbitant fees, stuff like "$20 or 10% of the withdrawl, whichever is
_greater_ ".

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stephenbez
I'm from the US and am currently living in London. I highly recommend a
Charles Schwab bank account. No ATM fees and no foreign transaction fees. Also
great customer service.

For a credit card, Chase Sapphire Preferred has no foreign transaction fees,
and they waive the $95 annual fee for the first year.

~~~
dnr
Seconded. I got a Schwab bank account prior to traveling in Europe this
summer. They rebate even international atm fees. (You might want to save your
receipts in case they miss one, but I think they caught most of mine.)

For credit cards, most Capital One cards also have no foreign transaction
fees. This site was quite helpful: [http://www.nerdwallet.com/blog/top-credit-
cards/nerdwallets-...](http://www.nerdwallet.com/blog/top-credit-
cards/nerdwallets-best-travel-credit-cards/)

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dschiptsov
If you ask for local currency, then the bank has nothing to do but ask your
bank to pay the amount you wished + hidden fee for the operation. The exchange
rate used to debit your account will be of your bank for this moment.

In countries like India or Russia this fee could be up to 20% from the amount
requested _for foreign cards_.

If you're asking for a currency exchange, you will be charged for this
operation separately. The exchange rate will be what this particular ATM is
programmed with.

Any bank charge extra for _each_ operation.)

------
Janteh
The same is true for credit cards I guess, I have a Dutch cc and my bank
always give me a better rate than for example PayPal.

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brianbreslin
I thought this was going to be an article about avoiding card cloning in
foreign ATM machines from the title.

------
ajays
A related question: are there any credit cards which don't charge exorbitant
fees when used abroad? A friend of mine is planning on travelling extensively
in East Asia, South Asia, Turkey, etc. for several months, and I'm looking for
recommendations for her.

~~~
kingnothing
Charles Schwab Bank refunds all ATM transaction fees, domestic and
international, and uses VISA wholesale currency conversion rates. It isn't a
credit card, but it's probably the cheapest way to get cash short of taking it
with from the start.

~~~
zrail
I have an account with this card. I called them before travelling
internationally one time and made the customer service rep repeat the "no
fees" part at least three times before I was satisfied I wasn't hearing her
wrong. Great card and wonderful customer service. I highly recommend it.

------
orofino
Happily, after traveling for 5 months now in South America, I can report that
you do NOT have to worry about this here. I've yet to see anything at all like
this and have used ATMs in 6 countries and 37 cities.

Europe? We'll find out in a month or so.

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tomhunter
Related: [http://money.stackexchange.com/questions/10837/when-
paying-w...](http://money.stackexchange.com/questions/10837/when-paying-with-
card-abroad-is-it-best-to-pay-in-local-or-home-currency)

------
maybird
Any suggestions for Canada? I don't go often enough to find a better solution
than using an ATM there, but I do go often enough to feel ripped off every
time I do.

~~~
bstpierre
I spent a week in Quebec City a month ago and didn't use any local currency --
just charged everything. Hotel, restaurants, gas; they all take Visa/MC. I
don't expect to travel there often, so I didn't want the hassle of withdrawing
too much and then getting screwed on both sides of the currency conversion
(USD->CAD->USD).

------
mherdeg
Transferwise looks like a pretty cool startup.

Are you guys cheaper than Oanda? Do you plan to offer GBP->USD? (As a US
citizen working in London, this is all I want.)

~~~
syc
Hi @mherdeg,

Thanks for your comment and nice words. We're constantly working on new
currencies and USD definitely high on our priority list. If you drop us an
email to support [at] transferwise [dot] com we'll let you know as soon as it
goes live. ;)

~~~
nagrom
Can I suggest that you think a little bit about adding Saudi Riyal too?
There's a huge host of expat workers there who get paid in Riyal but generally
only ever spend dollars, pounds or euros...this kind of service would be
perfect for them to transfer their money home.

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xyborg
Great tip for travelers, I will suggest you to do this everytime.

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omgtehlion
and PayPal does this too...

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jdimov
I've traveled to more than a dozen countries over the past two years and I've
NEVER seen an ATM that asks me what currency I want to be charged in...

~~~
yardie
This is a more recent "service" that some banks are offering. I've seen it
around the UK/Eurozone but rarely further than that. I've always said no to
these screens because my bank doesn't charge me a commission on foreign
withdrawals so I have no need for the 2% local markup.

