A Practical Guide to Managing Your Money While in Europe

There are lots of places to spend money in Europe… fantastic sights, bistros, and shopping.  Soon you might begin to wonder how you are going to pay for drinks at a pub, souvenirs, entrance fee, subway tickets, or anything else. The next few paragraphs contain my suggestions to help you spend money in Europe with ease. I’ll discuss debit cards, ATM machines, credit cards, exchanging money, traveler’s checks and more.

Debit Cards

This is the best way to get cold hard cash while traveling in Europe!  There are ATM machines everywhere and you treat them just like those here in the United States.  Simply insert your card, type in your PIN code, and choose the cash amount. The machine makes some noise and then spits out cash in the currency of that country. Cool right?  A few years ago I traveled to Europe with my family.   My Dad could not get over the fact that all he had to do was put in his debit card (the one he got from his bank in the States) and out came different currency. I’m pretty sure he’s still fascinated about it to this day.

Even though this is the best way to get cash while traveling in Europe there is one drawback to using your debit card at ATM machines… the banks that own the ATM machines are out to make a little profit and usually charge a small fee for using the ATM machine.  It’s just like if you use Bank of America here in the US and got money from an ATM machine at a Wachovia Bank. To minimize the fees I suggest making a few large withdraws instead of a lot of little ones.  Many ATM machines in Europe don’t give you a receipt. This only happened to me one time in Germany, so I wouldn’t worry too much about it. However if it is important that you keep a record of your transactions and you don’t get a receipt the best thing to do is write down some information.  Consider recording the bank name, the street name and location of the ATM machine, the amount of cash you received, and maybe the time of your transaction.  By doing so you can check your bank statement online or later when you return home.

Points to consider when choosing a debit card:

• Make sure it has a hologram logo (Visa is best). People have had trouble with cards that don’t have the hologram. A lot of the time the cards that don’t have the hologram are only ATM cards and not a debit cards. You need a debit card! If you’re not sure what type of card you have contact your bank.
• Often students under the age of eighteen are issued ATM cards by their bank. These most often draw money from their savings account.  Here in the US these ATM card work without a hitch.  But in Europe they never work!  Don’t bring such a card to Europe…it will just take up space in your money belt and get you no cash!
• Make photocopies of your debit card as well as your credit card, passport, etc. Stick one copy in the bottom of your suitcase or moneybelt and leave another copy at home.
• Tryout your debit card at several ATM machines to make sure it works before leaving the country.

Credit Cards

Credit cards are a good thing to have when you are traveling in Europe. They are easy to carry and most businesses accept them.  Credit cards also provide peace of mind.  If for some reason you don’t have cash your credit card will serve as a back up.

Before you “charge it” there are a few things you should know.

• First of all Visa and MasterCard are the most widely accepted cards in Europe. This is mostly because they have partnered with European companies. If you take another kind of credit card (such as an American Express or Discover) it is a good idea to have a Visa or MasterCard just in case.
• Second, you should call your credit card company and notify them that you will be traveling out of your “normal spending region.”  Tell them how long you will be gone and in what countries you plan to visit.  If your credit card shows up in their “system” as being used to make purchases out of your normal spending region the credit card company will call your home telephone.  If the credit card company can’t get in touch with you they will most likely block future charges to the card until they personally speak with you.  They will not take a family member’s word for it that you are somewhere in the Swiss Alps. Last summer I forgot to call my credit card company and tell them I was going to be in Paris. When they called my home to make sure it was me that had just purchased a pair of shoes (that I could not live without, of course) I was not there, I was in Paris!  However they blocked future purchases on that card even though my Mom told them I was indeed in Paris.  Luckily, I got an email from my Mom telling me what happened and I called the company to straighten everything out.
• If you have never purchased anything with your credit card while traveling abroad it is a good idea to find out how your credit card company assesses fees and converts exchange rates.  Most credit card companies have caught on to the fact that more people are using credit cards while traveling and are beginning to charge a fee or commission. You could call them or look for the information on you credit card company’s website.
• It’s a good idea to make photocopies of your credit cards to leave with someone at home and to keep with you in Europe. If something happens, like your credit card gets stolen, then you’ll have all of the information on the photocopy of the card.
• Lastly, and maybe most importantly, make sure your credit card is activated and working before you leave the country. Don’t just get it in the mail and stick it in your money belt. Avoid the hassle of trying to deal with that on your tip when you should be having loads of fun.

Changing money in Europe

Taking American Dollars or traveler’s checks and exchanging them for local currency is a thing of the past.  Don’t do it!  It is time consuming and expensive! But, if you really want to do it this way be sure you go to a bank, not a currency exchange place in the airport or on the street.  Rates are usually posted on the outside window or at the teller’s window.  There is one rate if you are buying their money (the higher of the two posted rates) and one rate listed if you are selling them your money (the lower of the two rates).  As a rule of thumb, the “actual “official” exchange rate is considered to be half-way between the two figures.   If you choose this method you will get the worst exchange rate and be charged a commission to boot!  Don’t do it, but if you must…go to a bank.  Banks usually charge flat fees or fees ranging anywhere from 2% to 10%.

Travelers Checks

Once upon a time, before ATM machines,  traveler’s checks were probably the safest and best way to get local currency in Europe. However today they are a hassle and most people carry them only in case of an emergency. You can get them at your local bank, AAA, and a few other places.  Traveler’s checks have bad exchange rates along with high fees. Like I mentioned before the ATM machine and debit card combinations are the best!

Often we are asked, “should I get some euros or local currency before I go on the tour?”  It is not a necessity and I usually don’t because the dollar is weaker than the Euro, your bank at home will charge a fee and commission to order the foreign currency and the exchange rate is never good. Wait until you get to Europe, then get your cash from an ATM machine and go celebrate!

You can look up current currency exchange rates on the web at: http://www.oanda.com/.