10 simple rules for using your Debit and Credit Cards in Europe

The convenience of ATM cards and Credit cards extends worldwide, including Europe, thanks to a few global cash networks. These networks allow debit and credit cards to be used in different countries just as you would used them at home in the US. You should have no problems using your American cards anywhere in Europe provided you check a few things before you leave. In addition, if you apply a few simple rules you can also save a bit of money as well when you travel to Europe. This article will outline these few things you need to know before you use your ATM and Credit Cards in Europe.

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Understand modern cash networks

Each major credit card network (VISA, MasterCard and American Express) manages their own global cash networks. VISA’s network is called PLUS (also known as Visa PLUS) while MasterCard manages two networks: Maestro and Cirrus.

Take your Debit Card out of your wallet and take a look at it now. Look on the front side first.

These days almost all ATM/Debit Cards issued in the United States are working as credit cards as well, either VISA or Master Card. Most likely you will see the VISA or Master Card symbols on the front of your ATM/Debit card.

Now flip your card on the back side and take a look. In addition to the symbols on the front, your ATM/Debit card will likely have a few more symbols on the back side.

VISA Plus logoThese symbols represent the cash networks your card works on. For a VISA branded debit card you should see the Plus symbol while a Master Card branded debit card should have the Maestro or Cirrus symbols. The newest debit cards however, might not have any symbols on the back, so you will go with what’s on the front.

Cirrus logoThe important thing is to know what symbols are on the front and back of your Debit and Credit Card that you’re planning to take with you. You will need to know these symbols when you want to get cash in Europe. Not all ATM machines in Europe support all cash networks. You might see some debit cards bearing the PLUS sign but not the Cirrus and vice versa. It doesn’t really matter.

Therefore, remember that you must know the symbols on the front and back of your ATM/Debit card. If you can match these symbols with the symbols on an ATM machine in a foreign country, then you can make sure you are getting cash the safest and cheapest way. If you don’t have any symbols on the back of your Debit Card, look to the front…if it says VISA debit then it will be on the PLUS cash network, and if it says Master Card debit it will be on the Maestro/Cirrus network.

Simple checklist for using your debit and credit cards in Europe

RULE 1: Call your bank before leaving on your international trip. This one rule will save you lots of headache. It is the most important rule! If you don’t inform your bank or your credit card company, most likely your card will be rejected when you try to purchase things abroad. This is the only way financial companies can protect you against fraud…so help them out.

RULE 2: Your ATM card’s pin number must have 4 digits. In Europe pin numbers have a max of 4 digits allowed. In the US most banks allow for 5 digits as well. So, before you travel abroad, make sure you go to the local branch and change your pin to 4 digits…and also make sure you test it before you go. Europe has been moving to 5 digit pin numbers lately but there are still many older ATM machines that only work with 4 digit pin numbers.

RULE 3: Withdraw cash only by using your ATM card from an ATM machine bearing one of the symbols on the back of your card. The symbols on the front (VISA or MasterCard) are important only for purchases. Many ATM machines show the sign VISA or MasterCard only and none of the cash networks signs. If you don’t see one of the signs on the back of your card, then look for another ATM machine.

RULE 4: Know your cards’ fees. If you’re taking a credit card with you, call your bank and ask them how much they charge you on international purchases. Regardless if it’s a VISA or MasterCard, each bank that issues a credit card has its own fees and they are required to tell you what fees they are charging. Remember that your bank’s fees include the VISA (or MasterCard) foreign transaction fees. The typical foreign transaction fees are 3% of the amount. Read more about ATM card fees charged by most banks.

RULE 5: Increase your daily maximum cash withdrawal. Depending on the fees charged by your bank, it makes a lot of sense to withdraw the maximum allowed in one transaction. The reason is that many banks charge a flat fee per withdrawal, regardless of the amount.

RULE 6: While abroad, withdraw cash only from a local bank ATM machine and not from shopping malls or train stations. These ATM machines most likely will charge you extra money.

RULE 7: Always have some cash with you. Even if you have a good credit card, a number of places in Europe still only accept cash.

RULE 8: Never withdraw cash using a credit card! This is valid in the US as well, but even more so abroad. You will pay dearly!

RULE 9: Setup a pin number for your credit card. Even though American credit cards have started having a chip in addition to the magnetic band, the American credit cards do not require a pin. However, especially when travelling to Eastern Europe, a pin number may be required for a credit card transaction.

RULE 10: Don’t change your purchase currency. Don’t accept merchants’ suggestion to change your purchase currency to your home country’s currency when making credit card purchases. Their question seems benign: “Would you like to pay for that in American Dollars or Euros?” You may think that’s a good thing but it’s not! They can set their own rates and it still counts a s foreign transaction on your credit card. Just answer no!

Should I use my ATM/Debit or Credit Card in Europe?

Using the right card for the right purpose can add up to significant savings when traveling to Europe. Back to my question: should you use your ATM or Credit Card in Europe or both? The answer is a bit more complicated but I’ll try answering this question from a pure financial perspective.

You might have a preference for one card over another but for me it really comes down to the fees I pay for every international transaction.

In order to choose the right card for your international trip you must know a few important things about the cards you already have.

Daily cash withdrawal limit

Each US bank has a different limit on daily cash withdrawal. US banks vary a lot in their limits and with some banks you can even ask for an increase in the daily limit for a given period of time. You just have to check with your bank.

Wells Fargo for example, allows $500 maximum daily (which can be increased by a simple phone call), so you would have to do a mental conversion before entering the sum you want to withdraw in the foreign ATM machine. I have not encountered any ATM machine in Europe that would limit the amount you can withdraw (unless they are running out of cash).

This limitation to the daily cash withdrawal limit was imposed by my bank here at home in the US. So, if you want to be able to increase your daily limit for cash withdrawal you have to call your bank and request it. They will usually increase it without any further questions. It’s your money anyway!

Foreign currency cash withdrawal fees

Your ATM card has several cash withdrawal fees associated with cash a foreign currency. A combination of a Flat Rate and/or a percentage of total. Again, it really depends on your bank. You’ve got to ask them so you will not be surprised.

Wells Fargo, for example will assess a $5 fee for ATM cash withdrawals made outside the United States and an International Purchase Transaction fee which is 3% of the transaction amount for each purchase made with your debit card in a foreign currency that has been converted into a U.S. dollar amount by a network. 

With a Wells Fargo debit card, for each $100 withdrawal you pay $5 in fees, while for each $1000 withdrawal you still pay $5 in fees.

Bank of America will assess a $5 fee for ATM cash withdrawals made outside the United States and an International Transaction fee which is 3% of the transaction/withdrawal amount for each purchase/withdrawal made with your debit card in a foreign currency that has been converted into a U.S. dollar amount by a network. 

With a Bank of America debit card, for each $100 withdrawal you pay $8 in fees, while for each $1000 withdrawal you pay $35 in fees.

Chase charges 1% of the amount withdrawn. In addition, Chase will charge $5 per Withdrawal and $2.50 for any Transfers or Inquiries at ATMs outside the US. 

With a Chase debit card, for each $100 withdrawal you pay $6 in fees, while for each $1000 withdrawal you pay $15 in fees.

The bottom line is that you have to know what your bank will charge you. So call your bank and ask.

However, just like home the US where you get charged extra by getting cash from ATM machines in shopping malls and some grocery stores, in Europe also you have to be careful where you get your cash from.

The safest place to withdraw money in Europe, in terms of not being charged extra, is an ATM machine of a local bank.

Foreign currency purchase fees

The fees your bank charges for foreign transactions include 1% charged by VISA or MasterCard for converting to US dollars and a percentage of the transaction total after converting to US dollars. 

Again, call your bank so you won’t be surprised. And for fun, just ask them why they charge you on top of what VISA/MasterCard charges you. It’s always fun to see how banks try to explain that they’re just trying to take advantage of the increase in international travel and make lots of money.

American Express foreign currency conversion fees

If you look at the back side of the first page of your American Express statement you will see a somewhat clear statement with regards to transactions made in foreign currency. Transactions Made in Foreign Currencies: If you incur a charge in a foreign currency, it will be converted into US dollars on the date it is processed by us or our agents. Unless a particular rate is required by applicable law, we will choose a conversion rate that is acceptable to us for that date. Currently, the conversion rate we use for a Charge in a foreign currency is no greater than (a) the highest official conversion rate published by a government agency, or (b) the highest interbank conversion rate identified by us from customary banking sources, on the conversion date or the prior business day, in each instance increased by 2%. This conversion rate may the rates such establishments use.

What does this mean? Well let’s just take a simple example: Let’s say you purchase something in France that is 100 euros. American Express, when they receive the transaction, converts the price from Euros to U.S. Dollars using the highest conversion rate they can find (at least that’s what they’re saying…it’s hard to really check). Let’s say that they find 1.5 US Dollars to 1 Euro. That means that they will charge you $150 U.S. Dollars for the 100 Euro item you have purchased. Now, the finance charge is 2%, which means that that they would add an extra $3 (2% from $150). So, your total for that item would be $153 US Dollars.

US Bank Visa fees for purchases made in foreign currency

US Bank Logo Here’s an example of what US Bank says about foreign transactions on my VISA credit card statement: As a reminder, we may charge a foreign fee of 3% on transactions that occur in a country other than the U.S. Now, this is interesting! As if they will ever NOT charge me 3% on transactions that occur in another country. This 3% consists of 1% VISA foreign transaction fee and 2% US Bank Usage fee. Using the example I have used for American Express, the same 100 Euro item would cost me $154.50 if I would use my US Bank Visa credit card.

The best credit cards to use for foreign transactions?

The answer to this question used to be very easy. A cash back credit card without foreign transaction fees used to be the obvious answer. However in recent years banks have started issuing great credit cards packed with lots of travel rewards for an annual fee. So it really depends on what kind of traveler you are. You can learn how to pick the right travel credit card for you and see my two favorite travel credit cards by reading What is the best credit card to use while traveling?.

The simplest and cheapest travel credit card is Capital One Quicksilver. It doesn’t charge ANY foreign transaction fees but it also swallows all the fees Master Card charges for any foreign transactions. To put it simply, you don’t pay anything extra for using the card outside of the United States. In addition you also get 1.5% cash back on all purchases and you get Master Card Elite travel benefits. See my review of the Capital One Quicksilver credit card.

Second in line, in my opinion is the Chase Sapphire Preferred credit card for its generous sign up bonus and Visa Signature travel rewards. It does come with a $95 annual fee which is not cheap. See my review of the Chase Sapphire Preferred credit card

Third in line would American Express credit cards. There are two reasons American Express are good travel cards: the foreign transaction fees are 2.7% which is lower than the vast majority of credit cards which charge 3%. Secondly, American Express provides a lot of extra travel services with their cards. However, the big drawback of these cards is that American Express is accepted in fewer countries and stores.

Best way to use your Debit and Credit cards in Europe

There is a lot of hype everywhere about getting the right credit and debit cards for traveling. But unless you’re talking about getting lots of miles as a sign up bonus, a good travel credit card only saves you about $30 for each $1000 spent on your trip overseas.

If finding the right card causes you too much stress, then use whatever credit card you have (following the rules above) and enjoy your trip.

However, if you really want to squeeze every dollar out when you travel, like I do, here is my simple rule. When traveling internationally I try to simplify everything. So, when it comes to the debit and credit cards I take with me I have only one simple rule.

Here is my simple rule I use when traveling to Europe. I use my Wells Fargo ATM/Debit card for all cash withdrawals and I use only my Capital One credit card for purchases where credit cards are accepted.

And remember that the symbols on the front of your ATM card are for purchases while the symbols on the back are for cash withdrawals. Following this simple rule saves me between $20 and $50 for every $1000 spent in Europe.

My best resources for saving money on your trip to Europe

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