Charlie (with photos added by Wynette): In 1969 Christy and I went to Europe and spent an hour at the bank, in the US, signing $10 travelers checks. We visited at least 10 countries, each for a different currency. We used the price of an ice cream cone as our unit of currency comparison.
On this trip Wynette and I are doing most of our buying with cash.
Nowadays it is so much easier, we just get cash out of machines. A few years ago each use of a cash machine involved a fee and a 2% (or more) conversion rate. Now most people get debit cards with no use or conversion fees. We have Capital One Bank cards but there are many others. Sometimes these cards pay the cash machine fees for you. I’m not sure what the business model is that allows profits there.
But banks crave profits so in the last few years when you get cash you are presented with a choice, either have the cash machine’s bank convert to dollars or do the transaction in euros and have your bank to the conversion. I did this yesterday and it said (some European full disclosure laws I assume) that it would convert at $1.19 per euro and my 200 euros would cost $238. I have been following the rates for months and know it should be less than $1.14. So I declined the conversion. Minutes later I check Capital One bank and it had charged me $228. I googled 100 euros and got $1.394 so this is an excellent rate. That extra $10 would have been a 4.4% fee, much larger than the old 2% fee.
You are presented with the decision standing at the machine on the street with bare-bones information and no way to know what choice might be better. Like they used to say, a banker can steal more money with a pen (update to computer) than a robber with a gun.
We have no-fee credit cards also. I used it for the train fare but I didn’t check the conversion rate. You often get the same choice, convert here to there, with credit cards. I rail agent didn’t offer a choice. I assume it went through in euros.
I wish I were there to taste the mushrooms!
My experience with banking in Germany/Austria and Britain is much different. When using my Bank of America ATM/debit/VISA card to get cash from an ATM, I am never given a choice, except for how many euros or pounds I wish to withdraw. Bank of America charges a hefty $5.00 fee + 3%, except at select partner banks (Deutsche Bank in Germany, Barclay’s in Britain, there is one for Spain, but not Austria). Our United Airlines/Chase credit card has no transaction fees, so is a much better deal, but we tend to use it only for larger purchases (pricey meals, hotel bills, gas, car rental). The only time I’ve been given a choice of bill in euros/pounds or dollars is at Hertz and international chain hotels. Due to the no fee deal, I always choose the local currency. Once Hertz didn’t bother to ask and just charged us in dollars, but it wasn’t worth complaining about the $20 or so when we got the bill… just treated it as part of the vacation expenses.
Oh yes, in Austria they just saute the chanterelles in butter.
Henry Shapiro