[Idyllchat] cash and credit cards

Sat Nov 24 09:49:51 EST 2007

Fellow Travelers,

1. We still use Amex Travelers Checks.  On Saturday (7/21) during our wonderful July Untour to the Heartland (Reuti) we found ourselves short of Swiss Francs.  No problem.  I knew the banks in Meiringen were open Saturday morning.  Yikes!  While true, the banks closed at 11 a.m.  We arrived at 11:25 a.m.  What to do?  Simple.  Take out my Mastercard (issued by Citibank) and use the ATM located in front of the popular BEKB bank in the center of Meiringen, the bank where we intended to cash our travelers checks if the bank had been open.  At the ATM I bought 200 SF using the Mastercard.  The Mastercard bill showed I was charged $166.64 for those 200 SF plus a $5.00 transaction fee.  My calculator tells me I paid $0.858 per SF.

The travelers checks, except for one, were cashed at this BEKB bank.  We take $100 travelers checks.  The least number of SF received in three separate cashings at the bank was 118.00, the most, 118.9.  Using an average of 118.45, even with the 1% surcharge applied when buying the Amex travelers checks, we paid about $0.853 per SF.

Aristotle told us long ago that one swallow does not make a spring.  Likewise, the above comparison does not constitute an exhaustive study.  Nonetheless, from this exercise I learned that travelers checks with a 1% surcharge versus the ATM with the fee is about a wash.  As a lone wolf who has not yet made the switch to ATMs, I need to make calculations like this to be sure I'm in the ballpark with you ATM travelers.  I know that certain cards have no ATM fee, and that ATMs are open 24/7 while banks are not, etc..  The comparison above was of use to me so I decided to pass it on.  Nothing more than that.

2. On 7/19 we walked Lake Lungern's West Shore, one of many hikes in Untour's Hiking and Biking Guide.  This was a delightful and relaxing stroll half around the lake, ending in Kaiserstuhl.  At Kaiserstuhl we had our mid-day meal at Landgasthof Kaisershuhl, the restaurant beside the main road, which, if I'm not mistaken, comes highly recommended by Untour and others.  We weren't disappointed.  The tab was 55.10 SF.  As the American Express card was not accepted, we paid using the Mastercard.  On the subsequent Mastercard bill we were charged $45.91.  This converts to $0.833 per SF.

Not two hours later on the same day we were in Susan's Geschenk-Budigg, a souvenir/gift shop in the center of Meiringen where purchases came to 55.40 SF.  This time, the American Express (Optima) card was used for the purchase.  On the subsequent American Express bill we were charged $47.21.  This converts to $0.852 per SF, which is 2.3% higher than the Mastercard conversion rate on the same day.  

I guess the moral of the story is that, while we can inquire of the credit card company all we want about whether or not there is an ATM transaction fee and/or whether or not a currency exchange fee is applied, the number in the computer that actually converts SF (or other currencies) to dollars on the day of purchase is rather important.  And, of course, this number, unless we phone, which we don't, is not available until we return home.

3.  A while ago I read an email posted to this fantastic chat site saying that airports have increased markedly the fee for currency exchange.  It's true in Zurich.  In the past I've noticed no significant difference in the exchange rate whether cashing a travelers check at the airport or cashing at a bank.  This year, at Zurich airport, a $100 Amex travelers check brought 114 SF whereas for the remainder of the trip the same denomination delivered on the order of 118 SF.

4.  Here comes a confession:  I really got clobbered on that unintended ATM transaction in Meiringen.  To keep it simple for comparison sake, Item 1, above, does not tell the whole story.  The bank behind the Mastercard not only charged a $5 transaction fee, it treated the transaction as a cash advance.  This means that, to the bank, I took out a loan at the ATM, a loan subject to a usurious interest rate (The nominal APR used to compute the interest on the cash advance was 23.310%).  This amounted to an additional interest charge of $2.79 for the period between when the ATM transaction occurred and the close of the billing cycle.  Worse, even though I paid the bill by check immediately upon receipt, additional interest amounting to $0.96, accrued for the period between the close of the billing cycle and when Mastercard's bank applied my check.  

That's about it on ATM/travelers check jazz.  A lot of numbers and a lot of minutiae, which, in the scheme of things, amounts to little.  At, say, a $500 equivalent of local currency obtained at the ATM over a two-week period versus the same amount in travelers checks, the winner could be ahead by less than ten bucks.  Because purchases paid by credit card in restaurants, hotels, shops, etc., usually amount to more than the amount extracted from the ATM during the vacation, the number we really need to make a useful comparison of credit cards is the magic currency-exchange number in the credit card company's computer at the moment of truth when our SFs (or other) are converted to $.  This number we learn only upon returning home when we see the bill.  Moreover, if we use only one credit card, there is no other number against which we can compare.  In that case, ignorance is truly bliss, or, if you'd rather the biblical corollary ... Those that increaseth knowledge increaseth sorrow.

5.  Finally, with regard to exchange rates, below, for the past 16 of 18 years is the cost of one Swiss Franc in US cents.  All conversions were taken from summertime American Express bills.

Year Cents
89 63
90 79
91 65
92 74
93 67
94 77
95 88
96
97 69
98
99 65
00
01 58
02 71
03 73
04 81
05 78
06 81
07 83

Have a phenomenal holiday season.

Happy travels,

Dick Stewart

  ----- Original Message ----- 
  From: Hetzel, Andrea 
  To: Patricia Edie ; idyllchat at untours.com 
  Sent: Wednesday, November 21, 2007 1:33 PM
  Subject: RE: [Idyllchat] cash and credit cards

  We just returned from Germany / Austria in October where we used Commerce Bank Debit Card and Commerce does not charge any transaction fee when using their card.

  Regards, Andrea

------------------------------------------------------------------------------

  From: idyllchat-bounces at lists.untours.com [mailto:idyllchat-bounces at lists.untours.com] On Behalf Of Patricia Edie
  Sent: Wednesday, November 21, 2007 10:31 AM
  To: idyllchat at untours.com
  Subject: [Idyllchat] cash and credit cards

  I echo all the suggestions to use bank affiliated ATMs in the country once you arrive to obtain your local currency and to have notified your bank of your travel plans prior to departure.

  Also notify your credit card companies so that your cards are not locked off.

  Regarding credit cards, we recently returned from a month's trip in Italy.  This is the first time that we conducted all credit card business usinig a Capital One Rewards card.  The statements are now coming in and it is wonderful not to have any currency exchange charges associated with our purchases.  To my knowledge, except for some credit unions, Capital One is the only credit card does not add a certain percentage transaction fee for purchases made in another currency.  We did take another credit card as a back up, but we never had to use it.

  We obtained this valuable information from this discussion list!  Grazie!!

  Patricia Edie

------------------------------------------------------------------------------

  _______________________________________________
  This message was sent by IdyllChat.
  To reply or send a new message, email to:
  IdyllChat at lists.untours.com

  Visit the IdyllChat archives:
  http://mailman.dca.net/pipermail/idyllchat/

  Search Idyllchat Archives for any subject at: http://search.dca.net/sites/untours/main.html
  >
  Read real Untourists' candid accounts of their Untours: 
  > http://www.untours.com/triplogs.html To unsubscribe, change to digest delivery, or 
  temporarily pause delivery, visit:
  http://mailman.dca.net/mailman/listinfo/idyllchat
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://mailman.dca.net/pipermail/idyllchat/attachments/20071124/2a97a95c/attachment-0001.htm