Off to Europe? 5 reasons to pack an ATM card

Your ATM debit card can be an easy, cheap way to get cash in Europe. Bank exchange rates (1 percent to 3 percent) and transaction fees (up to $5) can be far lower than using credit cards or traveler’s checks. But there are other reasons: European ATMs are easy to use and there are lots of them. According to Retail Banking Research, Western Europe has 350,000 ATMs alone.

Travel guru Rick Steves, who writes guidebooks and hosts TV travel shows, hasn’t used traveler’s checks for years. He gets his cash from ATMs and says debit cards are now a standard way for travelers to get money. And Edward Hasbrouck, author of “The Practical Nomad: How to Travel Around the World,” agrees.

“ATM cards are preferable over credit cards,” says Hasbrouck, who has been to more than 50 countries. “It’s a free, instantaneous way of accessing money.”

The trick is assessing overseas bank charges. SmarterTravel.com columnist Ed Perkins searches out ATM cards with the cheapest transaction and exchange fees. And he recommends Bank of America, which is part of the Global ATM Alliance. The draw, he adds, is that you can withdraw no-fee money from other Alliance members, including Barclays Bank in the U.K., BNP Paribas in France and Deutsche Bank in Germany.

Perkins warns, though, that co-branded ATM cards — those with Visa or MasterCard insignias — do charge the same high rates as credit cards, about 3 percent in exchange fees. And even ATM debit cards aren’t exempt; some banks charge 3 percent for some currency exchanges. “It’s still a lot less than using traveler’s checks, where you lose anywhere from 5 percent to 10 percent in conversion fees and charges,” says Perkins. “And with credit cards, you get hit with charges and fees when you take cash advances.”

No card is foolproof, though. That’s why it can be smart to take a credit card, too. Perkins, like other travel experts, uses his ATM card for day-to-day expenses and his credit card for big expenses like hotel rooms and flights. “I carry two cards, just in case there’s an unexpected layover,” says Hasbrouck.

Here are five more reasons why using your ATM card in Europe makes sense:

1. Few cash withdrawal fees

Some large banks, like Citibank and Bank of America, don’t charge fees for withdrawals made within their network. But withdrawals outside the network can set you back up to $5 per withdrawal.

2. Mostly lower bank exchange rates

Some banks, like Bank of America, charge minimal exchange fees; others don’t. For example, JPMorgan Chase charges a 3 percent conversion fee when changing your money into euros, pounds or the like. Then it pays to withdraw larger amounts, says Perkins.

3. Easy access to your money

Linking to your savings account in Europe isn’t always possible. But if you also have an online account, you can shift money into your checking account quickly if you need more money, says Eric Perlmutter, ATM channel management executive at Bank of America. “In most cases, you’ll always be able to access your checking account.”

That’s because it’s usually easier to get cash from ATMs than using your credit card. “Many U.S. credit cards won’t work in Europe,” says Hasbrouck. “Automated kiosks for train tickets don’t work with them, for example.” The reason, he says, is that European credit cards have different chips in them. They’re basically smart cards.

However, European ATMs work much like American ones, and they usually have English-language instruction. One caveat: Many European ATMs use four-number PINs. And some ATMs are equipped to take longer PINs; others aren’t. “You may have to get a new PIN,” says Perkins.

4. More cash expenses

Some places, such as French restaurants, only take cash. So Hasbrouck recommends withdrawing two or three days of expenses at a time. That means toting up your expenses, so that you don’t rack up ATM charges needlessly.

5. Plentiful ATMs

Western Europe boasts a high degree of ATM density, says Deborah McWhinney, head of personal banking at Citibank. “Finding a machine isn’t difficult,” she says, adding that using an ATM is also easy “given the near universal acceptance of U.S. cards.”

The trick is matching your ATM card to a bank network. That way transaction fees don’t pile up. And they can run up to $5 for each withdrawal. For example, Citibank has 825 branded ATMs in Europe, though many are in Eastern Europe or Russia.

Conversely, Bank of America, through its Global Alliance partners, offers its customers access to more than 11,500 ATMs in Europe, mainly in the U.K., Germany, France and Italy. In Spain, you may be out of luck. However, many banks have online ATM locators you can use.

Before you go to Europe, don’t forget to notify your bank first. It may reject charges from unusual places and freeze usage. “They could flag it as fraud,” says Hasbrouck.

And always have a plan B; carry a credit card, too. “There’s no one magic way that works everywhere,” says Hasbrouck. “Europe is diverse. Be prepared for other possibilities and the unexpected.”

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