Checking out the currency options

Exchange services, banks, ATM cards have varying fees. Compare before you go.

By Jerry Hirsch, Times Staff Writer
12:00 AM PST, January 22, 2006

DURING the early days of international bicycle touring, cyclists would hide coins and valuables in the tubing of their bicycle frames to evade robbers.

On a 1,300-mile bike tour of Spain and Portugal last year, Steven Sweedler of Plymouth, N.H., found it easier to stash an ATM card in his pocket.

"When I land at an airport, I get 200 to 300 euros from the nearest ATM and then pay for lodging and meals with cash," said Sweedler, who has taken six trips overseas since 2001. He refills his wallet as he goes, which works fine in Europe, where ATMs are easy to find.

How best to handle money while traveling has been a quandary since the time of the caravans. Thankfully, credit cards, banking networks and the ATM have made it convenient to obtain foreign currency and complete financial transactions overseas.

But convenience isn't always cheap. Travelers will find that a little research will save them money and trouble.

Traveler's checks, ATM and credit cards, a wad of cash — each has pros and cons. That's why experts suggest carrying a diversified travel wallet.

ATM and credit cards. See what the options are in your wallet. Call the customer service numbers and ask the banks and issuers how they calculate the exchange rate and what extras they tack on for purchases in a foreign currency. These vary by bank and by card.

If you're taking the ATM option, Bank of America is one of the better ways to go — but be careful to follow the rules. Typically, BofA charges 1% over the wholesale currency exchange rate and a $5 fee for overseas withdrawals. Tack on a local bank fee, and you can be paying a hefty 6% or more for grabbing 100 euros from a Berlin ATM.

But if you seek out bank machines that are part of the Global ATM Alliance there are no transaction fees, said BofA spokeswoman Betty Reiss. There are 27,000 such machines worldwide including the ATM networks of Scotiabank in Canada; BNP Paribas in France; Barclays in Britain and parts of Africa; Deutsche Bank in Germany, Poland, Spain and Italy; and Westpac in Australia, New Zealand and the South Pacific.

BofA doesn't treat its credit card customers nearly as well. They pay 3% over the wholesale exchange rate in premiums and transaction fees, Reiss said.

There are better credit card options. American Express charges its customers a 2% premium over the wholesale exchange rate. Automobile Club of Southern California members can obtain a Visa card with just a 1% foreign transaction fee, said spokesman Paul Gonzales.

Traveler's checks. These remain a tried-and-true method of carrying money on vacation. If you are careful to store the receipts separately from the checks, you can quickly get a refund, making them one of the safest forms of overseas funds.

But they are rarely the cheapest, said Ron Archer of Archer Travel Services Inc. in Glendale.

There's a 1% fee upon purchase (though many banks will waive the purchase fee for good customers), and tourists can encounter service fees and higher exchange rates when they are redeemed, he said. As long as it is a recognizable issuer, the label on the checks isn't important.

"People are really comfortable with traveler's checks, and they feel secure with them," said AAA's Gonzales. "But more places now take credit cards than traveler's checks."

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