This is one of the questions I’m asked most frequently by my clients, and my answer usually surprises them. None. Zero. Nada.
Credit card usage is extremely common in Europe. You should purchase anything you can with a credit card (hotel rooms, fuel, road tolls, food, sightseeing tickets, subway tickets, souvenirs). These days I routinely travel for weeks on end without spending a single cent in cash.
This is by far the best way to make purchases in Europe. If you look up the current exchange rate online the rate you’re going to see is the commercial rate, a rate that banks give each other for very large transactions. XE.com (https://www.xe.com) is a great site for finding current exchange rates.
Using a credit card gives you the best exchange rate that you, as an individual, are going to get. When you receive your credit card statement at the end of the month, your credit card company will have done the conversion to US$ for you. Most statements will show the amount in local currency (so you can compare it to your receipt and confirm you were charged the correct amount), and the US$ equivalent. The exchange rate is typically about 1% less than the commercial rate.
How do I get cash in Europe?
There are going to be times when you need to spend cash – for small purchases like postcards, a gelato, or an espresso. Many European businesses are very reluctant to take a credit card for purchases smaller than about $20, and may outright refuse. Occasionally I run across a restaurant, small B&B, or hotel that simply doesn’t accept credit cards. This is very rare now, but it does happen.
The best way to obtain cash overseas is to draw it out of an ATM with a Debit Card linked to your checking account. ATM’s are every bit as common as they are here. After inserting your card, the first question the machine will ask is what language you want (push the British flag).
Using a Debit Card gets you the same great exchange rate that you get when making purchases with a credit card (usually 1% less than the commercial rate). Your bank will probably tack on a Foreign Transaction Fee (FTF) of 1% to 3% to your foreign ATM withdrawals, and usually charge a small fee (less than $1) for using an ATM outside their network. Still, this is by far the best way to obtain cash.
There are some Debit Cards that offer to refund any FTF or ATM fees, but these are usually linked to investment accounts or wealth management banks. If you have one, great, but it’s not worth seeking one out just to avoid the small fee for foreign ATM withdrawals. As I said, I routinely travel for weeks on end spending little or no cash.
If you can get money out of an ATM in the US, you can do the same in Europe. If you don’t have a Debit Card linked to your checking account, get one before you go.
The only reason to bring lots of US$ and exchange them for local currency in Europe would be to avoid having your spending tracked by the government. You can do it, but the exchange rate is terrible.
Don’t even consider bringing traveler’s checks. This is an outdated method that will cause more frustration than peace of mind. These days it’s difficult to find a place that will even cash traveler’s checks, and when you find one, the exchange rate is ridiculously bad.
