The Currency Question

A reader recently emailed me asking for an opinion on whether it was necessary to purchase euro notes before heading to Italy, and whether I thought it was necessary and prudent.

Personally, I do not purchase currency before my trip as I do not find that it is cost effective or necessary. Generally, a purchase of foreign currency must be done with your credit card. This is considered a cash advance which has a higher interest rate than a normal purchase. You may be able to purchase notes directly from your bank, but this generally will require a lot of lead time, and there are bound to be fees. Some places allow you to do an electronic check, such as (I’ve never used this site, but after clicking around and doing some research, it looks to be reputable and good pricing, too — you’ll be hard pressed to find a good price on euro notes outside the EU). The money will come directly out of your checking account, and you won’t have to worry about paying extra for the cash advance on your credit card.

Also note that while some places may claim that they do not charge a service fee, you will be paying more through the exchange process. For example, the current market value between the US Dollar and the Euro is $1.42 (roughly). If you do some price comparisons, you’ll find that many places do not charge a fee, but simply mark-up (or mark-down, depends on how you look at it) the exchange rate.

You might find it more convenient simply to make an ATM withdrawal when you arrive in Italy. I have never had a problem using my ATM card in Italy, but if you bank with a small local bank or a credit union, make sure to call them and ask if your card will work out of the country. Also, many international ATM’s only accept four digit pin numbers. If your pin is longer than that, ask whether you need to change your pin. In many instances, if your pin number is more than four digits, you only need to enter the first four digits. Make sure to check with your bank first.

Whether or not you purchase currency before you arrive is a personal choice. If you plan to arrive in Italy very early in the morning or late in the evening, it might be prudent to have some euro notes on hand in case of ATM closures since most banks and some currency exchanges offices may not be open. You could also purchase currency at the airport — most airports have currency exchange booths, and you could purchase 50 or 100 euro there. I wouldn’t purchase too much currency since you will get better rates of exchange with your ATM card at an ATM machine (bancomat).

Take note of ATM fees from your bank. ING Direct, in my opinion, offers to best bang for your buck. They don’t charge fees, and you pay only the exchange fees and the 2% surcharge from Mastercard (or Visa) – which is typically cheaper than most fees charged by banks. Most banks charge more to make international withdrawals — check with your bank before heading on your trip to find out how much each withdrawal might cost you!

Perhaps this is your first time in Italy, and you’ll feel more comfortable having some ready cash on hand? I suppose if you are more relaxed and don’t want to worry about being stranded without any money, then purchasing some currency will be one less thing to worry about on your vacation!

author’s note: Please keep in mind that ideas expressed here are my own opinions. Be sure to check with your bank/credit union/currency provider for specific details on your own transactions.