Interesting -- does that mean it doesn't charge the rip-off 3 percent "currency conversion fee" that credit cards charge? And does it give you the same interbank rate that you'd get if you walked into a foreign bank to change money? Do you think the other parameters of the account (minimum balance, service charges) make it worth while?

As I explained in two previous postings above above, I haven't paid any ATM fees to a foreign bank either -- my first impression in my OP was mistaken. What I'm interested in avoiding is ATM fees charged by my own bank.

Oh my gosh, thank you so much! I had no idea that my Nordstrom card (acquired basically for Christmas shopping and the preview sale purchases and not used since last July) would get me just 1 percent currency conversion fees!! (yes, I called to confirm cause seem good to be true) You have just saved me quite a bit of money, particularly for hotel charges. Merci, merci!! This is a great wiki and thanks for bringing it to my attention.....now if I could figure out to find more FTers wikis.....

I don't know why you keep saying the 3% exchange fee is a "rip off". Did you actually check the rate of that Greek bank who you praised in the first post? You wrote:

"And you get the same rate as you would at any other bank -- in fact, the rates I got were a little better than at some other banks."

I'm sorry, but most banks charge you a exchange rate far exceed the 3% from a credit card or ATM, if you walk in with cash or travelers' cheque. Even if the rate you get is "a little better", it's still worse.

Anyways, not all credit card or banks charge 3% over the official rate of the day. AE cards is 2%, some other 1% or even 0%.

A bank provide a service via its credit card, debit card or ATM. So do VISA/Mastercard. They need to make some money. They remain the cheapest way to get currency exchanged even at the 3% rate.

There has been alot of discussion on which credit cards to use to avoid the "foreign transaction fee" (Capital One comes to mind). However, I have a slightly different question:

If you are in a foreign country but the merchant charges in USD, will the credit card still levy a "foreign transaction fee"? I read somewhere that some banks/credit cards will charge the fee because you are making it in a foreign country, regardless of if they actually had to do a currency transaction or not. I can't remember where I read this, but I didn't want to get screwed. Some foreign countries conduct business in USD anyway, so I was wondering. You can't always count on the CSRs of the credit cards when you call to ask.... I've generally gotten a different answer each time I ask.

Capital One is great for foreign purchases. Their charge is ZERO. Use it all the time.

^^

The concensus is that the Dynamic Currency Conversion is a bad deal for the cardholder. Make sure the bill is in local currency, not USD.

In some foreign countries, the USD is the "local currency". Turks & Caicos in the Caribbean, for instance. With this being the case, would I still be charged a "foreign conversion fee" for making USD charges outside the USA? Or what credit card companies/banks would still charge in this case?

I'd agree with that. When I was in Ireland in 2005, I remember dealing with merchants who said they could charge me in dollars, but their exchange rates in USD were about 3% higher than bank rates (take the time to sort it out), and I requested to be charged in euros (my bank, at that time, only surcharged 1% on credit card, and rebated 1%, so I broke even on euro purchases).

There's one hostel booking site in London I still use, and they want a 10% down payment in USD, and, again, their rates are about 3% higher than bank rates when they convert from pounds to USD, and they no doubt get a cut of that. Their web site is set up in a way that you can't avoid paying that extra 3%. My bank doesn't add anything on to that. When I check in they want to charge my credit card in USD, also, and I've got in the habit of bringing pounds along to not get caught up in that.

I have no information on that. And you don't have a choice anyways.

Of course you have a choice. You can either make a stink at the point of purchase and refuse to sign the slip that says you agree to this ripoff "dynamic" conversion. Or, just cross out the purported agreement when you sign the charge slip.

Or, when you get home, dispute the charge as a billing error. This costs the foreign merchant money, probably gets you the fee back, and may, eventually, put a kink in this scam.

This is true of most banks in the US. But when I've changed US $ in half a dozen EU countries and in Japan at a bank, I've always gotten the interbank rate or a rate that was negligibly different, as I occasionally verify by comparing the rate on my receipt with the interbank rate published in that day's newspaper.

I was referring to countries that use USD as official currency, in a reply to a post above. There's no conversions, so no DCC. Issue is whether they will still be a fee. I have no idea.

Yes. An article in the July 2005 Consumer Reports reported that Visa and Mastercard had started charging 1 percent on non-US purchases in US $. I'm not sure if the individual credit card banks also add another percent or two like they do with foreign currency charges, but I wouldn't be surprised. In fact,wouldn't be surprised if these clowns eventually started charging us two bits every time we farted.

That article also reported that there were consumer law suits under way to stop these various creeping foreign transaction fees, but I don't know what their current status is.

This doesn't address all of your issues, but I have found Netbank to be a pretty good solution.

Netbank, has never charged me a fee, nor has it ever charged me a conversion commission, for withdrawing money overseas. Because it is an internet bank, it does not charge for using any ATM. However, being an internet bank, it doesn't have any ATMs of it's own. It uses others bank's networks, and I have had charges from ATMs withdrawing cash in the US. So avoid that, I write a check from the Netbank account and deposit into a local account, then make a withdrawl. This works for me, may not work for you.

Netbank, however, does not rebate charges from other banks (which is my problem inside the US). There are some internet banks that do rebate these charges.

For me, travelers checks would be more of a hassle than they are worth. YMMV.

In general, yes. And yes. In general you get charged about 3% by the merchant and then 3% by your credit card company. They still consider transaction to be from a foreign country even if it's in USD.

Here's an article from the Indianapolis Times about it:

http://www.indystar.com/apps/pbcs.dl.../1003/BUSINESS

I've been shopping in Dublin this afternoon, and quite a few merchants have asked whether I'd like the amount converted to dollars. I declined, but I heard many American say yes.