Thursday, 25 February 2010

Currency Conversion Fees: Credit Union Debit Card Solution

I wrote a few days ago about my uncharacteristically cavalier attitude toward the much-hated currency conversion fees (2-3%) levied by credit card companies. My attitude was born out of the suspicion that however much time I put into researching the options (like the Capitol One card), I would be spending a lot of time for at best a small return.

Of course, if you are talking about larger amounts of cash--as Duchesse and Shelley pointed out in their comments--what to me might be a mosquito-size annoyance would be a rat-size irritation.

I took a look at Frugal Son's bank statement. Just by chance. He is, as you might know, in France. In addition to a credit card linked to my credit card, he uses his own credit union account, which comes with s debit card.

Withdrawal: $46.95
Multi-Currency Conversion Fee: $0.46

Withdrawal: $436.91
Multi-Currency Conversion Fee: $4.32.

After a gasp of horror (OMG 10%!!!!), I realized that the fee was around 1%.

Debit cards seem to be the way to go, or perhaps specifically debit cards issued by credit unions. Of course, debit cards carry their own risks, especially if someone gets a hold of your PIN#.

I have found that it is best to have multiple sources of cash when abroad. This after our ATM card did not work--at all. We called the bank in the U.S. only to be told "Oh yeah, a lot of people are having problems."

Or when we went to Italy and discovered that--even in Florence--almost no business took credit cards.

ANy other tips for avoiding those nasty fees?

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