Is it cheaper to buy foreign currency from Bank of America or use the Bank of America Debit card ATM through the Global Alliance ATM?

Is it cheaper to buy foreign currency from Bank of America or use the Bank of America Debit card ATM through the Global Alliance ATM?

It depends how much FX you intend to buy/use/spend, what currency it is, and what country(ies) you're traveling to.

The biggest problem with the Global ATM Alliance is that the withdrawal fees are only waived if you use the specific bank's ATM in their primary country. For example, Deutsche Bank has ATMs and branches all over Europe and some in the South Pacific, however, if you withdrew from DB in say, Australia, you'd still incur a fee.

The charge for pre-purchasing FX is nominal, but remember, you're buying the FX at a less optimal rate and if it's a more volatile currency, you have a greater potential of getting screwed -- plus you pay a surcharge on top of it.

If you use your debit card at ATM Alliance banks, you're only dealing with the FX rate on that specific date. Again, with a more volatile currency, that could be good or bad. Other issue is if you need a large sum of money, you'll find foreign banks to be more restrictive with their per transaction/daily withdrawal limits. That could be very inconvenience.

My best suggestion: 50/50. Get enough cash before you go so you have cash on hand. Then, if you need more, go to an ATM.

...I worked for BofA for 7 years...

Bank of America sucks for forex in addition to sucking bigtime as a bank in general. IMO the best solution out there for most folks is to open a FREE Schawb checking account which yields a FREE Schwab ATM card which is not only completely FREE of any foreign transaction fees and FREE of any off network ATM fees but it also rebates any ATM surcharge imposed by the foreign bank. And it gives about the best rate you will find anywhere.

Did I mention Schwab is 100% FREE for forex by ATM?

Using a CapOne debit card in ATM's around the world is a good bet for no fees and a great rate.

Most US banks charge very bad forex rates on selling foreign currency. Most US bnaks also charge a 3% junk fee to use an ATM overseas.

For years, I always use my ATM/debit card from my local CU. No forex fees and decent exchange. The one drawback is that I can only take out $300/day. I don't spend alot so that isn't a problem for me.

I do have a B of A debit card but I hardly use it for anything.

As others have said, it depends on a lot of factors, but I have found that the debit card almost always gives you a better rate than buying currency in the US.

And Bank of America debit cards do not give good exchange rates, even if you are within the ATM alliance. A debit card that does not charge exchange fees (Capital One, Charles Schwab, some credit unions, etc.) will give you a better rate.

my personal position is that I NEVER use a debit card.

Guess I have heard too many "scare" stories about crooks wiping out people's accounts, etc. So, I always use a credit card (knowing I will be liable for a maximum of $50 for unauthorized charges makes me feel better than someone draining my checking account). And since I pay all credit card bills on time and do not have to pay any fees/interest/etc, it is the credit card route for me.

BUT

other people have different perspectives.

I do purchase foreign currency before I travel. I buy mine through Wells Fargo. In terms of foreign currency purchases through WF, you do NOT need to be an account holder (as opposed to BofA). And, I have found that the currency rate through WF is better than other sources. WF sells the foreign currency online (or, you can phone them toll free) and sends it out NEXT DAY FEDEX delivery; if you order more than $1,000 you do not pay any delivery fee for this service.

The only "bad" thing from the above is that my CC all treat this as a cash advance, so I do wind up paying a small fee for that function (I guess I rationalize it away because my CU does NOT reimburse for foreign ATM charges, so I think of it as merely a wash).

I understand that you can walk in to certain specific WF branches and buy currency on the spot, paying by a withdrawal from your checking account, BUT since I am not an accountholder with WF, I do not have any experiences to share in this regard.

The country you are going to also matters.

In the UK, for example, many banks do not charge fees to use their ATM and the ATM's clearly state that. Using ATM's attached to banks means avoiding any such fees.

In some countries, there are great rates at exchange houses. That is often the case in eastern Europe, but almost never the case in any country that uses the euro. In the country I work in, I can generally convert dollars or euros to local currency at an exchange loss of less than one percent against the mid-market interbank rate. Sometimes, I can even to three currency transactions, dollars to local currency to a third currency for less than a one percent total exchange loss. In a euro-using country, your exchange loss at an exchange house is likely to be at least 6 - 10%.

Another thing to remember is that it is usually not essential to have local currency when you get off the plane. I cannot think of a major city in Europe that I cannot get into the city center with a credit card. That is where I generally change money, as there are few airports where you get good rates (Zurich, Mexico City, and Chisinau are the only three that come to mind) at exchange houses. If you feel you need a little local money in your pocket, go to McDonalds or a news stand at the airport and make a purchase, Most of them take dollars at an okay but not great rate but with no commission. Give them a 20 and you will get your change in local currency. Heck, even away from the airports, some McDonalds will do that. I remember in the pre-euro days, the best place to change money in Luxembourg was McDonalds. Go there first thing in the morning and get a Big Breakfast and depending on how much local money you needed, give them a US 20 or 50 or 100 and get your change in Luxembourg francs at a better rate than the banks and with no commission (unlike the banks). Or go later and buy a small coke and do the same thing.

Good day,

(some more information about getting/selling foreign currency. I am sure I am "preaching to the choir" with this post, but there may be some who can benefit)

my latest internet purchase of Euros from WF was for 1,500 Euros. It was sent to me next day FedEx with no delivery charge, so all it cost was the exchange rate (which was very good).

BUT

my order included a single 500 Euro note. Duh, fully 1/3 of the funds ordered were "locked" into one note? And, what am I supposed to purchase with a note worth approximately $725? A newspaper AND a coke?

So,

I contacted the local WF Intl Teller Site and explained to them my desire to obtain smaller bills for this 500 Euro note - and the same time, I explained to them that I was not a customer at WF, absolutely no accounts.

They said no problem. Come on down and we will be glad to do the exchange.

So, it took me about three minutes to wait in line, talk with the teller, and do the exchange. Got the smaller notes. No transaction fee.

Since my cc posts foreign currency purchases as a cash advance, I may just as well go to the local WF teller who sells foreign currency, get a cash advance, and then get the exact denominations I prefer.

I also asked about their buyback policy. She told me that as a non-account holder, I could exchange foreign notes for american dollars but that there would be a flat $5.00 charge. Given my past experiences with FOREX, et al., that does not sound too bad.

Maybe I will go to WF and put $50 in an account.

Using an ATM card to make a fee-free withdrawal is almost always the cheapest way to get foreign currency. Period.

The only way buying forex from BoA before you depart is going to be cheaper is if you aren't able to find a Global Alliance ATM on arrival and end up using some other ATM that results in big fees. And even then it could still end up being a wash.

So if you can, get a Schwab card so you're not limited to the BoA partner ATMs. If you can't, then I'd probably still go the ATM route and just make one big withdrawal at the beginning for the cash I think I need for the whole trip.