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How much cash should you take on a trip to Europe?

How much cash should I take with me? This is one of the questions I’m asked most frequently by people heading to Europe, and my answer usually surprises them. None. Zero. Nada.

Use Credit Cards

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.


Be sure to use a credit card that does not charge a Foreign Transaction Fee (FTF)

The FTF is a fee, usually around 3%, that certain credit cards tack on to every charge you make outside the US. Why? Just because they can! There are lots of credit cards that do not charge an FTF, including certain cards from Capital One, Chase, and Citi. Why would you want all of your purchases to be 3% more expensive than they need to be? Be sure the card(s) you have do not charge an FTF, or get a new one that doesn’t charge this ridiculous fee.

Not all cards are accepted.

MasterCard (called EuroCard in some countries) and Visa are the most widely accepted credit cards in Europe. American Express is about as widespread as it is in the US, which is to say, it’s not as common as MasterCard and Visa. Discover Card does not exist in Europe.

Call your credit card company before you leave to let them know that you will be traveling overseas

That way, when foreign charges start appearing on your account, the credit card company won’t turn off your card. Many card companies now say this is not necessary.

Process the charge in the local currency

An increasing trend is for hotels, restaurants, and shops to ask you if you want to charge in US$ or in the local currency (Euros, Pound Sterling, Swiss Francs, etc.). Always choose the local currency. It might be tempting to charge in US$, thinking you’ll know the exact amount that will show up on your statement, but when you do this you’re actually letting the merchant’s card processor set the exchange rate. The rate they charge typically includes a 3% convenience fee. I’ve also had some places simply process my charge in US$ without asking, so I’m always careful to tell them I want it charged in the local currency before they start processing the charge.

Sometimes they don’t ask you to sign

Europe uses a Chip-and-PIN system for their credit cards, which requires the card holder to enter a PIN number to complete the transaction. It’s a much more secure system than the US’s – if someone steals a European card, they can’t use it without knowing the PIN. When the US switched from magnetic stripes to chips in our credit cards, they only went half-way – we use a Chip-and-Signature system. Our cards will still work in Europe, but merchants who don’t get a lot of US customers might not understand the whole signing thing, and just hand you your copy of the receipt without asking you to sign their copy. Don’t worry about it.

If you’re using your credit card to pay road tolls in places like Italy, France, and Spain most of the toll booths are automated. You won’t have to sign anything.

Expect them to hand you the card terminal

Because of the Chip-and-PIN system, the card holder needs access to the terminal to enter their PIN. In most restaurants the waiter will bring a wireless, handheld terminal to your table. They’ll enter the amount and insert your card, then hand you the terminal – expecting you to enter your PIN to complete the transaction. You can either tell them there’s no PIN – which they might, or might not understand – or just take the terminal and look at it dumbly for 10 or 15 seconds while the card is being processed. When the machine starts spitting out the receipt, you can hand it back to them.

In gas stations and most shops there will be a little keypad on the counter, connected to the Point of Sale system. Sometimes it has a slot to insert your card, and sometimes you hand the card to the merchant. Either way, the terminal recognizes that it’s a Chip-and-Signature card, so you won’t have to enter a PIN.

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.


Get no more than $100 worth of currency before your trip

On a trip a few years ago I left the US with no Euros, and less than $20 in US cash on me (I’ll pretend this was on purpose). After getting off the plane in Barcelona, I stopped at the ATM in the airport Arrivals Hall to get money for bus fare into town. Everything worked just fine.

This may be a little nerve-wracking for more risk-averse people. If you’d feel more comfortable having some foreign currency in your pocket before you arrive in Europe, you can get it from your local bank, or order it from a currency service. Your local bank probably doesn’t stock any foreign currency, but they should be able to order it for you. Allow a few weeks for them to do this. I recommend getting no more than $100 worth of currency, since the exchange rate is going to be terrible. If all else fails you can always exchange a little money at the international airport you’re leaving from, or the one where you land in Europe (airport rates are lousy, so change only what you need for the immediate future).

Make sure your debit card has a Visa or MasterCard logo

Some ATM cards can only be used for ATM withdrawals from your local bank. They cannot be used for Point of Sale purchases (in stores or restaurants, for example), and can’t be used at ATMs outside your local bank’s network. These usually do not have a Visa or MasterCard logo on them. These ATM cards will not work in Europe. To be sure your card works in Europe, confirm that it it a Debit Card, with a Visa or MasterCard logo on the front.

Know how much you want before you get to the ATM

When you insert your card and are prompted for how much you want to withdraw, the amounts will be in the local currency. Do a calculation beforehand to figure out how much you are going to want. In places that use the Euro (currently €1.10 per $1) or Swiss Franc (CHF 1 = $1) this is pretty easy, because it’s reasonably close to 1:1. It’s less obvious in places like Hungary (currently HUF 296 = $1) or the Czech Republic (CZK 22 = $1). There have been times that I forgot to figure the amount ahead of time, and in my panic to make a quick mental calculation ended up withdrawing something like $10.

Withdraw the maximum

Your bank is going to charge you a small fee (usually less than $1) each time you use an ATM outside their network. It doesn’t make sense, in terms of time or money, to be running to the ATM every day for $20 or $40 worth of local currency. Take out your daily maximum, usually around $200 or $300 worth of local currency. Put $20 to $50 worth in your pocket for easy access and tuck the rest away somewhere safe, like a money belt.

Charge in local currency

I’m now seeing ATMs offer to charge your account in US$, instead of the local currency, just like at some hotels and restaurants. Always choose the local currency amount. It might be tempting to charge in US$, thinking you’ll know the exact amount that will show up on your statement, but when you do this you’re actually letting the ATM set the exchange rate. The rate they charge typically includes a 3% convenience fee.

Don’t use a Credit Card for cash advances

Even though they both have a Visa or MasterCard logo, there’s a major difference in how cash withdrawals are treated if you use a Debit Card, versus a Credit Card. A Debit Card takes money out of your checking account. A cash withdrawal with a Credit Card is a actually a credit transaction, for which the credit card company will charge you a fee (usually 3%), plus an interest rate that can be as high as 25% from the time you withdraw the cash until you pay off your statement. Always use a Debit Card, not a Credit Card for cash advances.

Use ATMs during bank hours

Sometimes an ATM will eat a Debit Card. It’s rare, and it has never happened to me, but it does happen. What happens if the ATM eats your card at 6:00 PM on Saturday evening, and you’re leaving for another city the next day? For this reason I always try to make withdrawals while the bank is open, so I can retrieve my card if anything goes awry.

Should I bring US$?

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.

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