Monday, May 22, 2006

Easy way to Save Money Traveling to Italy

The European currency is the Euro. Over the last few months the dollar has further weakened against the Euro by almost 10%. This means that all things being equal a trip to a European country will be at least 10% more expensive. When changing money companies and banks will charge a base fee, a percentage of the transaction and will choose the exchange rate that you change at. Most credit cards do the same thing but the fees are even higher. The fees for exchanging money can arrive at 10%.

There are a few things that can limit the damages. When making reservations, ask for a price in USD. Most primary hotels will be able to do this. Once you have a price ask to pay in advance. Depending on when you want to send the money there are a couple of things you can do. If you have at least two months, you can send them a check in USD and they will email you a voucher for the funds deposited. If the time is very limited you can send an international wire transfer, this will cost about 25$. I would send more money than just the basic price for the hotel so you can have some money for the hotel restaurant and other amenities you may need.

Another way to save money is to take cash. The cost to exchange in Italy is significantly, about 8%, lower than to change in the US. Every city will have little shops that change money. Two of these are Thomas Cook and Western Union. Just as with other things convenience and competition have their price. Exchanging in the Airport will cost almost as much as the US but waiting 15 minutes and changing in the city will save you a bunch of bucks. The hotel will also change money but their prices are not very competitive.

If you find yourself in need of cash, an ATM is called a Bancomat. Be sure that your card is activated to work on international circuits before leaving the US. Some Bancomats will also be exchange machines that will take major currencies and disperse Euro. It is counter-intuitive but these are not the best way to exchange. Their advantage is that you can access them 24 hours a day and they are slightly less expensive than a bank.

Finally use the credit card wisely. Credit cards are the most expensive way to change money. They charge fees on fees and choose the worst rate during a certain period. Use the credit only as a last resort. Check into the company’s fees before traveling. There are bad cards and there are disastrous cards. The least expensive card I use is the Bank of America Signature. The cards I never use are Citibank, Providian, and Capital One. The absolute worst, that is the one to leave at home, is the Chase Card. Never use the card to get cash. I do not use traveler’s checks because of the fees but this may be something worth looking into. If you do use traveler’s checks always get the checks in dollars. The local exchange shops can take them, obviously with a surcharge.

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9 Comments:

Blogger Italian Wine Guy® said...

citibank now charges what they call
"PURCHASES*FINANCE CHARGE*FOREIGN TRANS" -- which is essense is a service charge on foreign transactions, in addition to the exchange fee they also "hide" in the charge..so they're getting 2-3% from the merchant plus 3% from the card holder plus an exchange fee..pretty good rate of return for citibank

3:23 PM

 
Blogger Travel Italy said...

And if you get cash there is a 3% "desk charge". I would even use the prepayment vouchers with my companies in Italy. It allowed us to control cost better and not get a lot of suprises at the end of the month. Additionally the hotels love it!

3:28 PM

 
Anonymous Anonymous said...

How effective is it paying for meals, gifts,etc. with a credit card instead of paying with cash?

7:22 AM

 
Blogger Travel Italy said...

The exchange costs and fees are accentuated because of minimum fees. This means that a 30 Euro meal could cost you 50-60 $.

I strongly suggest cash for these minimun expenses. Most hotels have digital safes in the rooms just in case you do not want to carry money around.

You may also be able to find a CC that does not have these high fees but most of my cards just rape you every time you use them. So I avoid them if possible.

7:40 AM

 
Blogger Ann said...

I suggest avoiding travelers checks, especially American Express. A friend of mine went to visit a small town in southern Italy last summer, went to a couple different banks to TRY to cash them, was told they never heard of American Express.

Speaking of American Express, is a credit card to avoid bringing here. First it isn't widely accepted here, and if it is, the shopkeeper MAY try to talk you into using a different credit card, since American Express' fees are more expensive compared Visa or MasterCard.
Ann
http://www.blocharm.com/amborg

5:59 AM

 
Blogger Travel Italy said...

Ann - Thanks for the additional info. I never use Amex, although Raffaella has in the past.

Cash is still my favorite poison.

8:15 AM

 
Anonymous Anonymous said...

Do you or anyone have a suggestion as to how I can send (transfer) money to the USA from Rome?

9:15 AM

 
Blogger Travel Italy said...

If you do not have an Italian bank account you can transfer money with Western Union. There are local offices in most major cities.

1:42 PM

 
Blogger Nancy said...

There is a special Capitol One card that does not charge the translation fee (from local currency to US dollars). I use it for all our foreign purchases, including online bookings for hotels that bill in local currencies. All the other cards charge 2-3% on every transaction. That saves a bundle.
If you use the ATM, use your bank card, not a CC. The fees on these are astronomical and start at the time of withdrawal. Your bank will charge a set fee for every transaction, so take out the maximum you can and make as few withdrawals as you can.

8:15 AM

 

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