If you’re going to Italy, get ready for the time of your life! I’m sure you’re already planning for what to see, how to get there, where to stay, and other practicalities, so I’m going to discuss a money matter in this blog—namely—getting cash in Italy. In this piece, I’ll address:
- Is it better to use cash or credit in Italy?
- Is it cheaper to get euro in the US or in Europe?
- Should I exchange money at the airports or a currency exchange service?
- Can I use my ATM card in Italy?
- How do you find the lowest currency conversion fees for debit/credit cards?
In other words, I’ll show you how to make the most of your money.
Is it better to use cash or credit in Italy? You will want both, so take a debit and a credit card. Although many places accept credit cards, there are still plenty of places that only take cash. Jump in a taxi or on a bus and expect to pull out some euro. Smaller vendors generally only accept cash, too, so if you want delicious gelato, a unique painting from a street fair, a panino from a local stand, or many other cheaper goods, you will need to be prepared. You will also want to have a credit card, too, for larger expenses or to limit the amount of cash you have on you. Please note that Visa & Mastercard are the most readily accepted.
Is it cheaper to get euro in the US or in Europe? You do not need to exchange money before you go. Banks in the States generally tack on additional fees (flat rate, percentage, or higher than normal exchange rate) to exchange your money for you. There are ATMs at the airports (but make sure to look for ones that don’t have high transaction fees), so you can get money right when you get to Italy. If you’re concerned and want to have enough money to cover the taxi ride and first-day essentials, then maybe take out 100€, but I wouldn’t pay the additional fees for any more.
Should I exchange money at the airports or a currency exchange service? Nope. It’s too costly to use currency exchange stores. If you are worried about having cash at the end of your vacation, try to take smaller amounts out of the ATM so you only have what you expect you will need and spend down as you near the end of your trip (if you’re not planning to return to Europe in the near future).
Can I use my ATM card in Italy? Yes! And I’ve found that the best way to get euro in Italy is to use the ATM. I only use ATM machines with no transaction fees—BNL is a chain that I’ve found without them. I only use bank ATMs that are attached to the exterior of a branch or have machines inside. Machines within a bank have additional security which may deter those who want to attach card skimmers to the front…still look to make sure that nothing is amiss with the machine. Also, I only get money out when the bank is open…doing this provides me some protection in case the machine eats my card or there are other issues. If the bank is open, then I can ask someone to fish out my card from the machine that gobbled it up.
- If the machine isn’t letting you get the amount you want, try typing in a lower one—you may just be asking for more than its limit.
- For English, look for the British flag if you don’t see an American one.
- Do not let the ATM convert the cash for you. This is called dynamic currency conversion and can be quite costly. You may see two options—one in USD and one in euro—just choose the one in euro and proceed. If they convert if for you, the bank will charge a fee (sometimes hefty) for the convenience.
How do you find the lowest currency conversion fees for debit/credit cards? You will definitely want to have the right cards to avoid being gouged with currency conversion or foreign transaction fees. It is easy to get confused on what is a legitimate currency expense and what is a tacked-on fee. There is a daily difference between the value of the euro and the dollar—this is the exchange rate. The exchange rate tells us how many euros our dollars will purchase. I use XE currency converter to figure out the daily rate. If you have the right cards, this is the only number that matters because you won’t have any additional fees. But most banks/credit companies tack on a charge for converting your dollars to euros. This is usually a percentage of the transaction amount (generally between 2% and 3%). Find a card without this fee.
For example, at the time of printing 1€ cost $1.11, so 100€ would cost $111. If you have cards with no extra fees, this will be the end of it. If not, then you should add another $2-3 dollars to it. It may not seem like much, but it adds up.
My credit union doesn’t charge any currency conversion fees and uses the standard daily exchange rate (beware of banks that use a higher exchange rate than the standard in order to offer “no-fee” exchange). My credit card also charges no extra fees and uses a competitive exchange rate. Charles Schwab bank has a pretty good deal for travelers; they have no foreign exchange fees, rebate any ATM fees you may incur, and offer additional travel benefits.
Checklist (what to have/do before you go)
- Debit card with no (or very low) currency exchange fees/foreign transaction fees
- Credit card with no (or very low) currency exchange fees/foreign transaction fees
- Back-up debit card (I bring an extra card not attached to my normal bank account in case something happens. If Jon or I lost or had one of our debit cards stolen, our entire account would be frozen so it’s good to have another card associated with a different bank account in case the worst happens.)
- Make sure your daily withdrawal limit is high enough that you won’t have to go to the ATM daily.
- Let banks and credit card companies know you will be traveling, so they don’t freeze your account.
I’ve found that following this advice is the best way to exchange money in Italy, but it works for other parts of Europe, too. The more of my money that stays in my wallet, the happier I am. Before I went to graduate school and became a historian, I was a financial advisor. I guess you can take the girl out of brokerage, but you can’t take the broker out of the girl. Hope these tips help you on your next European adventure. Happy travels!
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