How ATM Can (AND WILL) Trick You When Traveling

HONEST GUIDE
13 Jun 202108:17

TLDRThe video script from The Honest Guys highlights common tricks ATMs use on tourists in Europe, particularly in Prague, to charge higher fees and offer less favorable exchange rates. It advises travelers to always decline conversion at ATMs to avoid markups and fees, and to withdraw smaller amounts of local currency instead of large sums. The video emphasizes using cards for transactions as much as possible, as most businesses accept cards and it's a more cost-effective method for tourists.

Takeaways

  • 🌍 When traveling abroad, be cautious about using ATMs in foreign countries as they may have tricks to charge you more.
  • 💰 ATMs may encourage you to withdraw large amounts of cash, which can be unnecessary and potentially risky.
  • 🔄 Be aware of conversion options at ATMs. Declining conversion at the ATM can save you money, as the ATM's exchange rate may be less favorable than your bank's.
  • 🏦 Using local currency is generally the best option, whether at an ATM or when making purchases, as it avoids additional conversion fees.
  • 📈 The European Central Bank issues exchange rates, and ATMs are now required to display these rates due to EU regulations.
  • 💶 ATMs may charge a fee for the conversion service, even if your home bank does not charge for ATM withdrawals.
  • 🛍️ Many businesses, including coffee shops and pubs, accept card payments, reducing the need to withdraw cash from ATMs.
  • 🚫 If you must use an ATM, always decline the ATM's conversion offer and opt for withdrawing in local currency to avoid extra fees.
  • 🗺️ ATMs with these tactics can be found in tourist destinations across Europe, not just in Prague.
  • 📌 The video script provides a detailed explanation of Dynamic Currency Conversion (DCC) and its implications for travelers.
  • 🎥 The Honest Guide offers practical advice for travelers to save money and avoid common pitfalls when using ATMs abroad.

Q & A

  • What is the main focus of the video?

    -The main focus of the video is to educate travelers on how to avoid common tricks and fees associated with using ATMs in foreign countries, specifically in tourist destinations around Europe.

  • Why do ATMs try to make travelers withdraw larger amounts of cash?

    -ATMs encourage travelers to withdraw larger amounts of cash because they can charge higher fees and markups on the exchange rate, which results in more revenue for the ATM operators.

  • What is the significance of choosing 'without conversion' at an ATM?

    -Choosing 'without conversion' at an ATM ensures that the traveler gets a more favorable exchange rate from their home bank, avoiding the markup that the ATM company would add, thus saving money.

  • What is the fee associated with using an ATM in the Czech Republic?

    -In the Czech Republic, using an ATM to withdraw cash often incurs a fee, which in the video's example is 99 Czech crowns, equivalent to around 4 Euros.

  • How does the ATM's dynamic currency conversion (DCC) work?

    -Dynamic currency conversion (DCC) is when the ATM offers to convert your foreign currency to the local currency. The ATM may charge a fee for this service, and the exchange rate may not be as favorable as the one provided by your home bank.

  • Why is it recommended to choose 'local currency' at an ATM?

    -Choosing 'local currency' ensures that the withdrawal is processed in the currency of the country you are visiting, which often results in better exchange rates and lower fees compared to accepting the ATM's conversion offer.

  • What is the advantage of paying with a card instead of withdrawing cash?

    -Paying with a card avoids ATM fees and exchange rate markups, allowing travelers to save money and enjoy a more seamless payment experience at most businesses that accept cards.

  • How does using a foreign card affect the withdrawal amounts offered by ATMs?

    -When using a foreign card, ATMs may offer lower withdrawal amounts to reduce the potential fees and exchange rate markups that the traveler would have to pay.

  • What is the Honest Guide's recommendation for tourists visiting Prague?

    -The Honest Guide recommends that tourists use their cards for payments as much as possible to avoid ATM fees and enjoy their trip without unnecessary expenses.

  • How can travelers find more information about ATM fees and tricks?

    -Travelers can subscribe to the Honest Guide's channel for more tips and information on avoiding fees and tricks while traveling.

Outlines

00:00

🌍 Traveling Abroad: ATM Tips and Currency Conversion

This paragraph discusses the importance of being cautious when using ATMs in foreign countries. It highlights the tricks that ATMs may play, such as encouraging users to withdraw large amounts of money and offering currency conversion at unfavorable rates. The speaker, based in Prague, emphasizes the need to decline conversion and withdraw in local currency to avoid losing money due to markups on exchange rates. The paragraph also mentions the additional fees that some ATMs may charge, even if the user's bank does not. The speaker's advice is to minimize ATM use and pay with cards whenever possible to avoid these fees.

05:01

💳 Dynamic Currency Conversion (DCC) and Payment Advice

The second paragraph delves into the concept of Dynamic Currency Conversion (DCC), explaining that it involves the ATM offering a different currency than the one on the user's account. It advises that it's generally better for the user's bank to handle the currency conversion. The speaker also provides guidance on what to do when paying at shops and other establishments, recommending the use of local currency to avoid unfavorable exchange rates. The paragraph further clarifies that the ATM's fee structure may differ depending on whether the user accepts or declines the ATM's conversion offer. The speaker encourages using cards for payments and highlights the prevalence of ATMs in tourist destinations, concluding with a note on supporting the creators of the content.

Mindmap

Keywords

💡ATM

ATM stands for Automated Teller Machine, which is a computerized telecommunications device that provides customers of financial institutions the ability to perform financial transactions without the need for direct interaction with bank staff. In the video, the focus is on how ATMs in foreign countries, particularly in Prague, can have tricks to charge tourists more money through high withdrawal amounts and currency conversion options.

💡Currency Conversion

Currency conversion refers to the process of exchanging money from one currency to another. In the context of the video, it highlights the potential for ATMs to offer conversion services that may include unfavorable exchange rates and additional fees, causing travelers to lose money.

💡Foreign Transaction Fees

Foreign transaction fees are charges that are often imposed by financial institutions when their customers use credit or debit cards for transactions conducted in a currency other than the card's home currency. The video emphasizes that these fees can be incurred when using ATMs abroad and advises tourists to decline conversion options to avoid such charges.

💡Dynamic Currency Conversion (DCC)

Dynamic Currency Conversion is a practice used by some merchants and ATMs where they convert the transaction amount into the customer's home currency at a rate set by the merchant or ATM, rather than the prevailing market rate. The video warns that this can result in less favorable exchange rates for the customer and advises opting to pay in the local currency instead.

💡Local Currency

Local currency refers to the official currency of the country or region where a transaction is taking place. The video advises tourists to opt for transactions in the local currency when using ATMs or making purchases to avoid unfavorable exchange rates and additional fees.

💡Travel Tips

Travel tips are suggestions or advice given to individuals to help them have a more enjoyable and efficient trip. In the video, the creators offer travel tips related to using ATMs and managing money while abroad, such as declining conversion options and paying with cards whenever possible to avoid unnecessary fees.

💡European Central Bank

The European Central Bank is the central bank for the euro and administers the monetary policy of the eurozone, which consists of 19 EU member states and their national central banks. The video mentions the European Central Bank to illustrate the markup on the exchange rate that is currently issued by the institution, which affects the conversion rates offered by ATMs.

💡European Union

The European Union is a political and economic union of 27 member states that are located primarily in Europe. The video references the European Union to highlight the regulations that require ATMs to disclose their conversion rates, which was not a requirement a few years prior to the video's production.

💡Tourist Destinations

Tourist destinations are places that attract visitors due to their various attractions, such as cultural sites, natural landscapes, or recreational amenities. The video mentions tourist destinations to emphasize that the ATMs discussed are not only found in Prague but also in other popular travel locations throughout Europe, where tourists may encounter similar challenges with currency conversion and fees.

💡Card Payments

Card payments refer to the use of credit or debit cards to pay for goods and services. The video encourages the use of card payments over cash withdrawals to avoid ATM fees and suggests that most businesses, including coffee shops and pubs, accept cards as a form of payment.

💡Transaction Fees

Transaction fees are charges that are imposed on a customer by a financial institution for processing a transaction. In the video, the term is used to describe the fees that may be charged by an ATM for providing cash or conversion services, and how these fees can be avoided by declining conversion and using card payments directly.

Highlights

The importance of being cautious when using ATMs abroad to avoid unnecessary fees and unfavorable exchange rates.

Prague, a city with numerous ATMs that may not always have the travelers' best interest in mind.

The Czech Republic uses Czech Crowns instead of Euros, which is important for tourists to be aware of.

ATMs may attempt to trick users into withdrawing larger amounts of cash than necessary.

The揭示 of the ATM's second trick: offering conversion options that may result in significant losses for the user.

The European Central Bank's role in regulating the markup on exchange rates and its公示要求.

The additional fees that ATMs may charge on top of the conversion markup, such as a withdrawal fee.

The strategy of declining conversion at ATMs to save money, even though the ATM may still charge a fee.

The prevalence of ATMs in tourist destinations throughout Europe that may employ similar tactics.

The concept of Dynamic Currency Conversion (DCC) and why it's generally better to have your bank handle the conversion.

The advice to always choose to pay or withdraw in local currency to avoid unfavorable exchange rate conversions.

The potential for different ATMs to have varied programming, affecting their fees and conversion practices.

The recommendation to use cards directly for purchases instead of withdrawing cash from ATMs to minimize fees.

The Honest Guide's mission to educate travelers on these practices to help them save money during their travels.

The impact of tourist seasons on the prevalence of such practices and the importance of being informed before traveling.

The demonstration of how using a local card significantly changes the withdrawal options and fees offered by the ATM.

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