Credit Cards

Once upon a time, when visiting Europe it was recommended that you carry traveler's checks. They cost a few extra percent to buy AND a few extra percent to cash, but it was considered worth it since they could be replaced if lost or stolen. But, it got so fewer people would accept them and places like the American Express office in Rome shortened their hours.

Enter the age of the credit card. The cards gave you a good exchange rate since they were buying currency in bulk. Mastercard, in particular, is widely accepted throughout Europe (beware, Discover is not accepted anywhere). But then credit card companies discovered they could make a killing by using slightly different exchange rates for selling than they were buying AND added a few percent (3-5%) on as an exchange fee. Ouch.

Now it is the ATM card. They give a reasonable exchange rate and you can negotiate things so that withdrawal fees are eliminated or at least kept to a minimum. But, scammers have skimmers, readers, and cameras skillfully deployed so that if you aren't careful somebody can gain access to you account and empty you out to the tune of a thousand dollars a day for as long as your account can handle it.

So, what is a person to do? We plan to use an ATM card and pay for most things using cash. We will gain some measure of security by linking it to an account where we hold minimal cash, replenishing the account through online transfers as necessary. Plus, for those times when only a credit card will do, we have discovered that there are some cards which do not have foreign exchange fees. We use Capital One, although we haven't done enough with it to be able to recommend it to anyone else. And that is more than you need to know about the finances of travel.