Tuesday, July 31, 2018

ATMs The Definitive Word

Having explored the ATM situation here in Sevilla extensively, for the good of the internet, I summarize our findings here. First, the winning combination: 
If you come here to Spain from the US and all your assets are in USD and you want euros cheap, before you leave, get an ordinary CapitalOne 360 checking account with a debit card and put some money in it. When you get here, look for a BankInter ATM machine (locator), go to the nearest one and withdraw some euros. At some point, you'll be given the option to conduct the transaction in USD or euros. Do the transaction in euros. There is no fee and the exchange rate will match the day's rate to about 3 decimal places. Basically, free currency exchange.
Now for a bit more detail. The option to do the transaction in dollars or euros comes up a lot here with both debit and credit card transactions. Choosing the most advantageous option is complicated and depends on the card issuer.

Some cards charge a foreign transaction fee. In this case, doing the transaction in euros will result in an additional charge from your card issuer (your US-based bank or credit card company). Sometimes the fee is a flat rate, sometimes it's a percentage of the transaction. It's really difficult to figure it out sometimes and you maybe should just call your card issuer beforehand to get the details. There are some cards that don't have a foreign transaction fee (e.g. CapitalOne cards, and a few others). But a lot do, especially if you're just using your local bank.

If your card issuer charges a foreign transaction fee, then you should consider doing the Spanish transaction in USD. But, there's a catch there too. In that case, the Spanish vendor may charge a transaction fee for working in USD. Now you really have to work. You've got to compare what the Spanish vendor is going to charge to what your US card issuer is going to charge and pick the cheaper. When you're standing at an ATM machine on a busy street in Madrid with 4 Spaniards lined up behind you waiting for the same machine, you have to be prepared. I recommend taking your phone and snapping a picture of the screen that gives you this option USD or euros and canceling the transaction right away. Then, go off to a discreet location and do the math.

This is no fun (and I'm a mathematician). By far, the best approach is to get a card(s) with no foreign transaction fees and do all of your transactions in euros while in Spain (or elsewhere for that matter). Both our credit cards and debit cards are CapitalOne so we do credit and debit transactions in euros.

Even here, however, there is one last catch. There are still the old ATM fees that have nothing to do with currency exchange. Your card issuer might charge a fee for not using one of their machines, and the Spanish bank that owns the ATM might charge a fee. This is why I'm happily writing this blog post. The BankInter ATM does not charge a fee and CapitalOne doesn't charge a fee for using it (so I guess it must be in their ATM network somehow).

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