Fidelity's mySmartCash ATM card rep told me, to bypass the low daily limit of $500 a day ATM withdrawal, is to go to the bank to ask for a cash advance. The caveat is, the cash advance is subj to 1% network fee while the ATM withdrawal has no such fee.

I thought the ATM withdrawals are also subj to the 1% network fee.

I'm not sure what your point is. Many of the biggest credit card issuers are now charging fees for all transactions processed outside the US. It doesn't matter what currency or where the actual business is.

The party to complain to is the bank, not the merchant, since the merchant isn't charging the fee. In my experience the banks will sometimes reverse the fees in cases where they truly came as a surprise. For example, I had no problem getting Citibank to reverse a foreign transaction fee I was charged for a lane reservation at a bowling alley in NYC (the bowling alley's website happens to use a Danish credit card processor).

That said, I now use my Schwab card whenever I think there's any chance something could get processed outside the US.

My point is that if I walk into my local grocery store and they process the charge via a French bank either in $$ for Euros then the grocery store is going to have a problem.

The OP said he booked a trip with a US based company. Unless there is something to the contrary in the cruise contract he had a reasonable expectation that the charge would be made against a US bank in dollars. According to him it was not. My point was the merchant was not entitled to do this unless there was an express agreement that permitted him to.

His complaint is with the merchant because it was the merchant who selects the processing bank.

The operative term here is "reasonable expectation." You had reasonable expectation your charge would be processed here in the US. I'm happy the bank took care of your complaint, but it was merely an accommodation. They had no obligation to do so (unless the merchant violated some VI/MC rule and VI/MC has obligated themselves to make you whole in such a situation).

This is a very good point. I've yet to figure out exactly what the forex fee or spread is for an ATM withdrawal and how it compares with a charge, whether for goods or cash advance since they are processed the same way through the VI/MC system.

Does anyone know?

I've kept track of a lot of credit and ATM transactions on my and my friends' trips, and haven't found any consistent rate trends distinguishing ATM withdrawals from POS purchases.

The only difference I'm aware of is timing: when you make an ATM withdrawal, the rate is calculated on that day; when you make a POS purchase, the rate is usually calculated when the transaction posts to your account. So in theory you're better off using credit if you think the local currency is falling vs. the USD and the ATM if you think the local currency is going up.

But since none of us can reliably predict exchange rate movements, practically speaking I'd say it's a wash.

I really don't understand why this is such a huge thread...its very simple. There are only a few cards that charge no fees for foreign transactions.
Capital One is the most common....what else do you need to know? Instead of trying to figure out forex spreads, atm fees, transaction fees, exchange rates and other everchanging numbers...just put a Capital One card in your pocket, call them to make them aware of your travel plans, and buy what you want for the price listed....simple

Well, it would be simple, but calling them just doesn't work -- they still systematically decline charges for no reason I can figure out. It is really necessary to have a backup card.

Correct me if I am wrong, but ATM owner fees just for withdrawing money isn't covered in the no forex fees catch-all. It seems like a common occurrence reading around FT threads that out of country ATMs don't split out the ATM owner fee from the withdrawal amount.

Over the past 11 years I have never had an issue - and CapOne now has an automated system that takes your travel info. Then again my card use has been limited to Aus/NZ/Middle East/Europe/Mexico so YMMV depending on where you visit.

Of course, it make good sense to carry a backup card with a high limit (my capone card limits are 1/5 of Chase and Citi). And if you are traveling with spouse then each can have a backup which further reduces risk of loss.

Last month I notified both C1 and Citi (AA MC) of my trip to Europe. C1 rejected one charge on the trip (possibly because it was in a different country than a previous charge the same day?), but accepted all further charges throughout the trip. Citi rejected my first charge, and locked the card.

Maybe more than one backup card?

Well I'll give you two reasons..

For purchases I'd like a card that earns a good rebate either in cash or some kind of worthwhile points/miles but incurs no forex fee. The LH card met those conditions (except that they may have changed the rules). The Schwab seems a very good alternative.

For cash, I find that ATMs transactions are sometimes fine but other times nothing but trouble (ie poor exchange rate, fees, limits to amount etc). I generally find better to do one large counter cash advance (which uses the VI system). I know the rate I'm going to get, there is no limit and if there is an issue I'm dealing with a person not a machine (it can ruin your whole trip if the ATM seizes your card for example which happens).

Again I'd say the Schwab is the best. You can use it either for counter or ATM and there is no daily limit (or at least wasn't). I carry a couple of others just in case that one doesn't go through (which has happened) but its been the most reliable.

There isn't anything wrong with the Capital One cards except I didn't think the rebates were up to what I could get with the Lufthansa.

Not that it matters anymore but once upon a time the BA card had no forex fee making it the clear winner in my book. Sadly no longer.

Just to clarify, at non-Global Alliance banks (whether via ATMs or at the counter), BofA will charge $5 plus just a 1% "international transaction fee". The fee won't be charged at the time of receiving the cash, but will show up later on your statement. The 3% ITF applies only if the card is used as a credit card for a purchase. See this page for lots of good ATM FAQ's. One answer explains how to contact them to increase your daily allowance for withdrawals, which means you wouldn't have as many $5 charges during your travels.

Capital One...no fees.

...and no service, either.

It's really a shame Schwab withdrew its offer. The Fidelity AMEX is no good because it has a foreign exchange fee and AMEX has lower acceptance in many countries. For now, Capital One is the best alternative for new comers.

Look into Capital One Direct Banking as well, no fee access at ATMs worldwide and easy to link your local bank account to it for $$ transfers. Same exchange rate policy as the CCs. Then you can withdraw cash in the local currency