Q&A: The best form of money to use while traveling through Europe

Dear Liz: My friend and I are widowed and really not money-wise. What is the best form of money to use in Europe, including Budapest, Vienna and various small towns? I’ve heard small-town merchants (and maybe even those in cities) don’t take credit cards, but even if they do, our bank charges substantial fees. I’ve also heard negative things about using ATMs. We’re going to be in most places only for one night, so getting each area’s currency would be cumbersome.

Answer: Americans accustomed to paying with plastic can be surprised to discover that merchants abroad, including some hotel owners, want to be paid in cash. Even businesses that accept credit cards may balk at processing U.S. cards, since our plastic lacks the more secure chip-and-PIN technology now used by most of the rest of the world.
So you’d be smart while traveling abroad to have multiple ways to pay and to choose methods that don’t ding you with excessive fees.

Let’s start with credit cards. Carry at least one with a Visa or MasterCard logo, because those are the most widely accepted brands in Europe. Call your issuers to see whether they charge foreign transaction fees. Many do, and these fees of up to 3% make every purchase more expensive than it needs to be. If all of your cards charge such fees, consider applying for one that doesn’t. Capital One waives foreign transaction fees on all of its cards, according to financial comparison site NerdWallet. Other cards that waive such fees, and which offer rich travel rewards, include Barclaycard Arrival World MasterCard, Chase Sapphire Preferred and BankAmericard Travel Rewards Credit Card.

Whichever card you use, call the issuer to let it know the dates you’ll be abroad. Otherwise your issuer may shut down your account for suspicious activity. Carry a backup card (and alert its issuer) in case your primary account is compromised or mistakenly blocked.

When you need local currency, the best way to get it is often from a bank ATM. Travel guru Rick Steves, who spends a few months in Europe each year and primarily uses cash, suggests you avoid “independent” ATMs run by companies such as Travelex, Euronet and Forex because of their often-high fees. Bank ATMs in Europe typically don’t charge usage fees, although your home bank may levy a $2 to $5 flat fee plus a foreign transaction fee of 1% or more for every withdrawal.

You can minimize usage fees by making infrequent but large withdrawals. Or you can use a checking account that doesn’t charge fees. Charles Schwab’s high-yield checking account offers unlimited ATM fee rebates worldwide with no foreign transaction fees, according to Brian Kelly of the travel rewards site ThePointsGuy.com. If you have an account with Capital One 360, the online bank, ATM fees are waived and the bank absorbs MasterCard’s 1% foreign transaction fee. USAA Bank charges a 1% foreign transaction fee but doesn’t charge a fee for the first 10 ATM withdrawals.

If you do find yourself carrying a lot of cash abroad, consider bringing a money belt that tucks under your clothes. That’s generally more secure than carrying money in a wallet or purse. And have a great trip!


  1. When I traveled in Europe I primarily used a credit card for my hotel and larger expenses but used cash for smaller purchases like food and souvenirs in marketplaces. Like Liz said, I have heard of different cards that waive foreign transaction fees and its probably worthwhile to get one. If you bank with Bank of America, they have global partnership like BNP Paribas and Deutsche Bank. If you use their partnered bank ATMs, the ATM fee is waived but you still pay a transaction fee (I think it was 3%). So you don’t have to worry about taking big chunks of cash out at once. Just get what you need because you don’t have to pay the AMT fee every time and the percentage will be the same anyway.

    Here is a list of Bank of America international partner ATMs:
    Barclays (United Kingdom)
    BNL D’Italia (Italy)
    BNP Paribas (France)
    China Construction Bank (Mainland China)
    Deutsche Bank (Germany)
    Santander (Mexico)
    Scotiabank (Canada, Peru, Chile and the Caribbean)
    UkrSibbank (Ukraine)
    Westpac Bank (Australia and New Zealand)

    Or just go with Liz’s advice and open a free online checking account with CapitalOne 360(Formerly ING Direct). Now that I know they waive foreign ATM and transaction fees, I love them even more! That’s awesome!

  2. Since it sounds like they haven’t travelled for a while, warn them to stay away from travelers checks. Even though they used to be required, now they are just a headache. No one accepts them and you have to wait in banks to cash them. Use credit cards and ATMs, easy peasy.

    • Liz Weston says

      Good point. Getting travelers checks used to be part of preparing for overseas trips, but no more.

  3. Roseanne says

    What about getting Euros before leaving home from your bank? The conversion rate is fair and the convenience can’t be beat. That ‘s what we did for our last European trip.

    • Liz Weston says

      We have enough euros from our last trip for the first day. My experience with local banks is that the exchange rate is not great compared to what will be available at the destination ATMs, and the fees are greater.