Changing US dollars overseas (and a question)
 

A continual aggravation while traveling in foreign countries is the way financial institutions nickel and dime you to death with unconscionable fees. Most credit cards charge a rip-off 3% "foreign currency conversion fee," which is a fee for doing nothing since the conversion is automated. If you use an ATM you get hit for ATM fees (in addition to the rip-off 3% if you use a credit card in them.) And of course with credit cards and ATM advances there can be the horrendous finance charges. Banks charge a flat fee and/or percentage to change money which is often quite high. Currency exchanges often advertise that they change money at bank rates, but you'll find in the fine print (if at all) that they charge a whopping big fee or percentage commission. Some exchanges, including Amex, don't charge a fee or commission, but you'll get such a lousy exchange rate that you aren't any better off than if they had.

A recent trip to Greece suggested to me a way of avoiding all these charges, thus both saving money and offering the pleasant opportunity to flip the bird to all these rip-off artist financial institutions.

I discovered by chance that Alpha Bank, a Greek bank, will exchange US $ Amex checks into Euros without a fee or percentage commission at all of its branches. That is, not only is there no "check-cashing charge," but they actually waive any fee or percentage bank commission for exchanging the currency. 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. (AMEX offices will cash and exchange AMEX checks without charge, but you get a very poor rate.)

Now, typically you have to pay a 1% charge on AMEX checks when you buy them. Even at that you're ahead of the game by changing them free. But it's easy to avoid even the 1%. Many banks offer no-charge AMEX checks to customers with certain types of accounts. I think AAA does too, and there are no doubt other organizations that do. Many people reading this probably already have access to charge-free Amex checks without realizing it.

So that's the strategy: equip yourself with no-charge AMEX checks in US $ and in Greece change them at Alpha bank.

One downside to this is that there aren't a lot of Alpha Banks, so you may have to look around for a branch. And of course there may be convenience and security reasons to use credit cards or ATMs for some things. But still, if you use this technique as much as possible, the savings can be significant.

Which brings me to the question. Does anyone know of banks in other countries which exchange US $ Amex checks for free? I can't find a list anywhere, but I'd love to be able to use this method of changing money in other countries around the world -- it would save money, and would let me stick it to the rip-off artists who have been sticking it to travelers like me. If there isn't a list of such banks on the internet, maybe we can create one here.

My experience is quite the opposite, and I travel quite a bit internationally. I can only recall one instance that I was charged a fee by a non-U.S. bank for getting cash at an ATM, and that was in Montreal. My home bank does not charge any fees for using foreign ATM's. I stopped carrying travelers checks 10 or more years ago and can't see the advantage in switching back.

I'm not sure why you would want to get a "cash advance". Isn't your ATM card linked to your checking account?

My bank (Wachovia, which sucks by the way) charges $2 for a non-Wachovia ATM fee (that's universal inc. non-Wach US ATMs) and then a small percent for overseas transactions.

It's not too bad. I took a fistful of USD and walked into a Bank of Beijing Branch and got a rate of 7.57RMB/$1 which is not too far off the official interbank rate of about 7.70/$1 and no service fees on top of it so I did ok there.

I find most local bank forex counters give pretty good rates but really not any better if I did it myself at the ATM.

I left my last bank when they went to this type of policy (believe it was $1.50 per transaction plus 2% currency fee). My current bank doesn't charge either of these. That issue alone was enough for me to switch banks.

I think you told me which bank this was.

I have an HSBC savings account (one of the high yield ones) and they offered me an ATM card but i'm thinking about taking them up on that offer since they seem to have branches every where on the face of the earth.

When I used my US ATM card, linked to my bank account, at Greek banks' ATMs, I was charged by the foreign bank through my US bank 5 bucks a pop.

My references to ATMs and cash advances were to two different things. My ATM card is indeed linked to my US bank checking account and indeed incurs a hefty charge when I use it at a foreign ATM. If you use a credit card at an ATM, it will usually be a cash advance. In the past in was possible to create a credit balance on most credit cards so that your cash withdrawal on it at an ATM wouldn't incur finance charges but would just reduce your credit balance, but in recent years I've found that the rip-off artists at most credit cards have found ways to make it difficult or impossible for you to create a credit balance, no doubt exactly in order to prevent people from doing this.

I thought my OP described very specific and concrete advantages to switching back to travelers checks.

I've found that most ATMs don't levy their own charge.

Their are some exceptions - typically when they are not run by major banks - eg privately run ATMs within bars in London. Some country exceptions too - Vietnamese cash machines seem to levy a fixed fee of VND20,000 to VND40,000 (less than US$3 max). Typically works out to 1% as the transaction size is often limited to VND4M.

Beyond that it just comes down to which card I use. I'm sure all UK travellers know by now that Nationwide don't levy the "almost standard" 2.75% fee on non-GBP transactions. So if I use their standard debit card in the 7-ELEVEN "China Trust" ATM about 10 yards from where I'm sitting now, the rate I get will turn out to be almost exactly (ie sometimes more, sometimes less) than the mid-rate I see on OANDA. If there is a skew, it seems undetectable. If I use their VISA credit card in the shops, the same applies. If I draw cash then they charge 2% I think, plus interest until paid off.

If I use almost every other card I carry, I get charged between 2.73% and 3%. Nationwide is not the only card in the UK not to charge - I'm sure I've read here of US cards that also don't charge. When I cancelled Amex, one reason was I had stopped using it as a payment card because of the charge. They just seemed to think I was being pedantic. I pointed out that since almost all my charges were foreign, the 2.73% skew they charged on my level of expenditure was a multiple of their annual fee - so perhaps they were pedantic in asking for it. The annoying thing is they refused to believe that another bank existed that doesn't charge this fee and said that I probably hadn't read the terms and conditions of Nationwide card properly....

I think the responses you are getting here indicate you should consider changing banks for your cash transactions, if you do enough foreign travel to explore finding banks that will cash AMEX travelers checks for free.

Like others, I haven't paid a fee for my ATM withdrawals, except at a couple of private ATMs in Canada. Thats on every continent but Antarctica.

I haven't been to Greece, but on July 1 a €100 withdrawl from Bank of Ireland at SNN posted to my account at $135.50.

For some reason I always take travellers checks and they are always a pain. Expensive to cash and inconvinent. I really find that the ATM is much more effecient.
In South Africa the SA bank charge me a .60 cent fee to use their ATM, my home bank charged $3 to non-WAMU ATM, which I knew before I used. Still to be able to get local rands at a grocery store at noon on Easter Sunday, makes it all so worth it. It was a bank to bank conversion with no additional fees.

Everybody (myself included) is telling you that their experience is different than yours. I can't remember having a foreign ATM charge me any fee either.

Go look for a different ATM machine if one says its charging you a fee.

Sorry, I must have misunderstood my bank statement, which said the $5.00 is a "NON-[my bankname] ATM TRANSACTION FEE: $5.00" So I see now it must have been charged by my own US bank, and not the foreign bank; it wasn't clear from the statement.

But the basic point is the same: whether the charge comes from the foreign bank or mine, it's there. And from looking at bank web sites, I find that all banks charge for using ATM's for withdrawing money if the ATM isn't either part of that bank's network or a specific designated partner network. (Sometimes this varies by the type of account you have, or you get a very limted number number of free ATM withdrawals per month at certain partner bank ATMs.)

And the basic question is the same: is there a US bank at which I can get an account, which will let me make an unlimited number of withdrawals from that account (not a credit card cash advance) via ATMs in foreign countries all over the world, without having to pay an ATM fee whoever charges it, and which will give me the foreign currency at interbank rates without my being charged a commission, conversion fee, or any other fee by either bank involved or by anyone else? That would be the equivalent to the technique I described using Amex checks. (Or at least the technique which I found works in Greece, and I was asking if it would work in other countries too.)

Well, there is this famous wiki that all avid FT-ers should be aware of.

Not my bank, which happens to be on the wiki highlighted in the post above mine. There's been other posts on FT about other banks that also rebate ATM fees. If you're doing substantial travel outside the U.S., it really pays to do your homework on this topic. I did a lot of research before changing to my current account about 2 years ago, as I needed an account that would be ATM-friendly for all the travel I do outside the U.S.

When I need cash overseas (I live in USA), I use a debit card issued by a brokerage firm. It does not charge any fees. I have never paid any fees to the foreign bank that owns the ATM machine.