Robert Mitchell provided this useful information 11 years ago:

How to save money while paying your Euro bills - The Final Solution by rmitchell248 and JOFTAA

  • There is new, updated info, available here.
  • The info below in the second post is still current.

For the past couple years JOFTAA and I have been running through the best avenues available to save as much money as possible while paying our Euro bills while in Germany. This also includes converting U.S. Dollars into Euro for rent, utilities, spending money, etc.

We have tested many methods, from using the automatic payment service available from Service Credit Union (SCU) or Community Bank (CB), to opening a German bank account and funding that account using a USAA and/or Capital One ATM card at a German ATM.

While we were able to save money at first with USAA Bank since they waived the ISA (International Service Assessment) fee while on active duty, the waiver of this fee is only available for 1 year and only for Active Duty that holds an account balance before PCSing overseas. After that, USAA accounts levy a 1% ISA for transactions at non-U.S. ATM locations. Although Capital One does not charge this 1% ISA fee, their $600.00 daily ATM Limit has been a hindrance while attempting to pay 2,000-3000€ a month in bills, because getting this much Euro requires a trip to the German bank ATM every day for up to a week. While this method will work, it is not at all convenient. And, because you are going to the bank many times over several days, your Dollar to Euro exchange rate will change every day making it more difficult to calculate your savings against the DoD exchange rate.

These issues lead us to the next solution, and what will be our final solution, for paying our Euro bills in Germany unless SCU changes their policies. Please keep in mind that the DoD pays us 2.5% higher than the current Euro to U.S. Dollar exchange rate in our paychecks. SCU and Community in turn charge us 2.5% more for the Euro that they sell us on base than the current market rate. The whole idea behind what we are telling you is to keep this 2.5% for yourselves and not give it to SCU or Community Bank. While 2.5% doesn’t sound like a lot, it really adds up fast!

If you were to withdraw 2,500€ a month for your bills and another 500€ a month for spending money (not including any vacations or heavier than usual Euro spending) the savings are great.

Let’s say you require 3000€ that gets converted from dollars. For sake of argument I am going to use today’s DoD exchange rate of .6755 for my calculations. (August 28, 2011)
To get 3,000€ from SCU or CB on base it will cost you $4,441.15.

If you use your SCU debit card or ATM card (this does not work for CB!) at a German ATM, it will cost you roughly $4,330.13 to get the same 3,000€. This is a savings of $111.02. This is money that you get to keep each month my not using DoD exchange rates.

You can see why it is well worth these small steps to get your bills paid using this method. Using the numbers above, you have the potential to save about $1,332 per year! These numbers will fluctuate as the exchange rate changes, but regardless, you will save money monthly by not using a DoD ATM on base. The following information will spell out how to save your money step by step.

1. Open a Service Credit Union "Plus Checking" account

In order to save the ISA fee, you must do the following:

  • Use direct deposit (you can direct deposit your paycheck)
  • Use E-statements

December 13, 2011 update: SCU removed the 1500 minimum balance stipulation and has now have capped the rebate to1% of the first $2000 withdrawn. There is no minimum balance required, anymore. In other words, they will refund up to $20 worth of ISA fees per month. Aside from saving the ISA fee, you will also get up to $20 of ATM fees refunded at the end of each month. Here is a document with all of the changes.

Ask SCU to give you and your spouse one ATM and one debit card each. Your spouse will need to be present to get the debit card. Between the two of you, you will have four cards. Each card will have a daily ATM limit of $1,000.00, for a total limit of $4,000 per day. Of course, if you are single, you will be limited to one ATM card and one debit card, giving you a limit of $2,000 per day using the two cards.
Please check with SCU to make sure the above info is still current.

2. Open a German bank account

All decent size villages have a bank. There is bound to be at least one bank within a few minutes of your house no matter where you live. In order to open a bank account at the German bank, you will need your U.S. passport. Request an ATM card and it will be sent to your house in the mail. There is a small annual fee for having the card, but it is too small to even care about. One word of advice is not to deposit or transfer U.S. Dollars into your German bank account. The Dollar to Euro exchange rate at the German banks is not as good as at DoD banks. The German bank is only for taking Euro from the ATM, depositing Euro, and paying Euro bills.

3. Get ALL Euro at an OFF BASE ATM

SCU has an on-base rate and an off-base rate. The on-base rate is set by DOD, and is 2.5 percent above market rate. The off-base rate is set by VISA and is often slightly less (.2%) than the most current foreign exchange rate. When you use your SCU ATM card at the German ATM you get the better VISA rate.

If you use the ATM at the German bank that has your account, you can withdraw your Euro using your SVU ATM card(s) and then either deposit the Euro into that same ATM using your German bank ATM card, or you can walk the money over to the service counter and have the teller help you.

4. Set up automatic payments (optional)

You can have your German bank pay your monthly bills automatically. There is no fee for this service at the time of this writing. If you’d rather pay your bills manually each month, you can go into the bank and do this by filling out the appropriate transfer form. The bank teller can help you with this until you get the swing of it. Just be sure to fill out the form with the teller a few days in advance of the payment being due. Most of your bills will be paid via a bank to bank transfer. You can also make one time payments with the banks online banking as well as set up scheduled payments. German banks do not charge for one time transfers, but the DoD financial institutions do.
Your utility companies (electric, gas, oil, phone, etc.) will automatically deduct from your German account, so this is the time for you to give your new German account number to all of your utility companies.

Make sure you put enough money into your German account to cover all of your bills. One suggestion is to keep 1,000€ in your account and call that amount "zero" so that if your cell phone bill is higher than usual, or if you need to put something on your German debit card, you can. So, if your bills are 2,000€ monthly, you’ll deposit that 2,000€ on top of the “1,000€ Zero amount,” for a total of at least 3,000€ in your account at any given time during the month.

The only downside to this method is that you must remember to deposit your money into your German account monthly. If you are not able to do this one month, maybe due to a vacation, you can simply sign into SCU online banking and wire the money to your German account and pay the 2.5% for that month. To avoid this, you can put the funds into your bank before leaving. If you’re on a paycheck to paycheck program you may want to resort to the online bill pay while on vacation or TDY, etc.

The positive side is that you should be spending at least a couple of hours a month on your finances and going over your debits anyhow. This takes no longer than one stop to the ATM and it will not add to your accounting time in the least. The best part is that it saves you over $100 per month.

It is not complicated and will probably get you to have a better handle on your finances.

This money belongs to you. Regardless of if you are Active Duty or Civilian, this method can save you money. The DoD sets its rate to be flexible with the changing exchange rates. We have verified the reasoning for these increased rates with many sources. As long as you fill out your reconciliation forms honestly and accurately stating how many Euro you spent each month, there is no problem with the method being outlined.

Good luck! If you have any questions, please feel free to post them here at EverythingKMC. We will try to answer your questions as quickly and as accurately as possible.

Important update: It appears that SCU no longer allows their ATM card to be used at non-U.S. bank machines. However, you can still use the above method, exactly as written using the debit card. The only change is the amount of Euro you can take from the ATM each day. Even with this change, you should be able to get enough Euro daily to take care of most anything you need.

11 years ago

When we wrote the above, we did not take into consideration any day to day usage of a credit card. If you have a credit card which charges you an ISA fee for foreign purchases/transactions, you need to get rid of that card and get a card that does not charge you the ISA fee! If you get charged an ISA fee you will notice that your foreign purchases cost you a lot more than what you initially expected!

When you use a credit card on base, for the most part transactions are done in U.S. Dollars. However, you will notice that there are concessionaires on base who charge Euro. These concessionaires will allow you to pay in either Euro or U.S. Dollars. If you choose U.S. Dollars, they will convert your payment using the poorer DoD rate.

Also, while traveling throughout Europe and the rest of the world outside of The U.S., when you use your credit card for foreign currency purchases, you could be subject to an ISA fee of up to 4% depending on the credit card you are using.

This is why it is important to use a credit card that does not charge an ISA fee. You also want a credit card that uses the VISA rate for calculating the exchange rate.

I personally use a Visa Card from Capitol One. They have two versions of the card. One has no annual fee, the other has a $59 annual fee which is waived for the first year. Neither has an ISA fee. This means that when I make a purchase on base in Euro, such as paying a TKS bill, or shopping with one of the super overpriced concessionaires, when asked if I want to pay U.S. Dollars or Euro, I always choose Euro. This is because Capitol One will convert my Euro into Dollars at a better rate than what DoD concessionaires offer. When buying from any of the AAFES concessionaires that offer you the choice, always choose to pay with Euro as long as your credit card doesn't charge an ISA fee and has a better rate than DoD as the Capitol One Venture Visa Card does.

By the way, the difference between the no annual fee card and the $59 annual fee card is that the free card gives you 1.25 reward points per dollar spent, while the $59 card gives you 2 points per dollar spent, plus a bonus 10,000 points (currently worth $100! Offers may change). If you spend a lot of money on your credit card, and you pay off your bill in full each month, the $59 dollar card is actually a much better deal than the free card. Otherwise, choose the no annual fee card from Capitol One.

10 years, 8 months ago

I am new to Italy and love what you have written but does it apply to Italy. I see that SCU only has locations in Germany and US and nothing in Italy but does the principle idea of getting Euro out of the non DoD ATM using SCU debit card work?

thank you and any help in this would be greatly appreciated, we could use such web based forum in Italy.

10 years, 8 months ago

The theory should be exactly the same anywhere you can buy/sell Euro for U.S. Dollars. You just have to be sure you are not being charged the service fees as described above. The biggest issue with changing from Dollars to Euro is the fees charged by the banks.

As for using a credit card while in Italy, I am going to highly suggest you look into the Capitol One Visa Venture Card mentioned in post number 2 above. If you sign up for the card using the link we provide, this site gets a small commission to help pay for our server. Thank you.

10 years, 8 months ago

It looks like SCU is making their account a little less desirable for those of us who are using their ATM and Visa Card.

The ATM fee refund amount used to be unlimited. So did the ISA fee refund amount. Now, the maximum amount that you can get a refund for is $20.

I am going to advise that you no longer use the SCU Visa Card for transactions. The Capitol One card is a much better deal because there are no International Transaction Fees (ISA) to keep track of. Capitol One Venture Card has no ISA fees at all, so you don't have to worry about going over the $20 limit that Service Credit Union is now imposing. When you click the link for Capitol One, look at the left column of the resulting website for the name CAPITOL ONE. Be sure to choose one of the Venture cards.

Attached to this message is a copy of the letter I received from SCU outlining the changes that took place on January 1, 2012.


10 years, 8 months ago

Thanks for putting up some great info. Unfortunately it looks like it is getting more difficult to get around the 2.5% hit we take when withdrawing euro. I've only been here a couple of months and haven't completely figured out the best way to maximize my pay yet. I currently use USAA as my primary bank and SCU as an alternate would like to continue to use them if possible. I normally withdraw euro off base directly from my USAA account.

Am I understanding the above post where I would only be saving $20 a month by switching to SCU? (USAA=1% ISA, SCU=1% ISA with $20 refunded). This would be assuming I open an account at a local bank for paying bills per the example above.

I'm not sure the $20 a month would be worth it for me to switch from USAA. I wish more places accepted C.C.'s as I get 1.5% cash back with my capital one card. With no ISA fees it is essentially saving 2.5% compared to withdrawing from an off base ATM.

10 years, 7 months ago

I was looking into the capital one card and had a question about the APR. It says that cash advance fees are hovering around 25% which seem quite excessive. Do they begin charging the minute you withdraw or is it at you billing cycle and as long as you pay off everything in full every month no additional charges are levied? Does anyone have personal experience with this? I asked my Dad and he said it sounds like the 25% starts when you make a withdraw.

10 years, 7 months ago

Information regarding the card should be obtained by Capitol One. I am no where crazy enough to use a credit card for a cash advance, nor am I crazy enough to charge more than what I can pay in full at the end of each month.

The moment you start paying interest, you lose all benefits of having the card.

If you do decide to get the card, please use our link in the first post. This is how we support this site. Thank you.

10 years, 7 months ago

Quote by JOFTAA:
Information regarding the card should be obtained by Capitol One. I am no where crazy enough to use a credit card for a cash advance, nor am I crazy enough to charge more than what I can pay in full at the end of each month.

The moment you start paying interest, you lose all benefits of having the card.

If you do decide to get the card, please use our link in the first post. This is how we support this site. Thank you.

I would not be taking out more than I could cover in a month but when you use the card at an ATM to witdraw money to then deposit into the bank isnt that considered a cash advance or am I totally off base with that assumption?

10 years, 7 months ago

If you use a CREDIT CARD at an ATM, that is a cash advance. You can open a Capitol One checking account and get an ATM card to use. That is what I did. You get the same great exchange rate, no ATM fee, and no ISA fee. Great deal!

You just need to have a way to deposit money into the Capitol One checking account. I do that by transferring money from another bank into my account.

10 years, 7 months ago

Ok, here is what I understand....since we're military USAA will waive th ISA fee for 1 year when we use our ATM card in the German ATM's. After the 1st year, I need to open a Capitol One checking account and get an ATM card. Then I need to find out if USAA will increase the amount we can take out of the ATM so I don't have to make daily trips to the German ATM. Take the euros we get from the ATM and deposit them in the local bank ( I remember reading Volksbank seems to be an easy one to use). Use the German bank account to have our bills paid directly to landlord and utilities. Does this sound correct? Thanks for all the info/help you have put into this. It's helping our transition here go better than expected!

10 years, 7 months ago

That sounds right to me. The only thing I would change is to use Capitol One from the start. Why bother having to worry about a one year deadline in regard to ISA fees?

Granted, USAA may raise your daily limit, but you have to call them each time you want the limit raised. And, even if they do raise your limit, you have to deal with ISA fees after the first year. Those fees will get nasty. At this point, I'd rather take a walk to the bank each day to get Euro. Volksbank was just a suggestion at the time. I am using Kreissparkasse. It is in my village. Kreissparkasse is in a lot of villages. In my case, I pass the bank several times per day, so going in to get Euro is not really an inconvenience. It's just a part of my daily routing, along with the meat market and the bakery.

10 years, 7 months ago

I just got off the phone w/USAA and they will only waive the 1% ISA fee if you or your spouse is deployed. If you have PCS to a new base and do not have a deployed family member,you will be charged the 1% ISA. If the merchant you use your USAA ATM card charges a fee (2-3%) USAA will refund those up to $15.00 monthly. This makes a pretty easy decision for me to get a Capitol 1 checking account w/the no fee ATM card.
This may be a dumb question, but here goes....If you use your Capitol 1 ATM card in the German ATM's ie Volksbank or Sparkasse do they have a fee also? Meaning we save the ISA fee from Capitol but still have to pay the German banking ATM fees?? Then I see no savings. The German ATM fees could range from 1.5-3 euros per transaction. HELP!! Thanks Again, Mae

10 years, 7 months ago

I think that you would still be saving even if the German bank charges an ATM fee. If you always take out the max, say 600-1000 euros that is 1-3 euros for the ATM fee versus the 1% ISA fee which would be 6-10 euros. But if you start using the ATM to take out 20 here and 20 there then yes, the ATM fee would start to really matter and would eat into the savings.

Im thinking though, that once you get the German bank then you could use their ATM card to withdraw free from their network of ATMs to get 20 here and 20 there.

10 years, 7 months ago

We went to Volksbank today in Misenbach and wanted to use our USAA ATM card and read on the merchant ATM their fees is 2% of the withdrawal amount or minimum 5 euros. Pulling 1000 euros out, you would be assessed a fee then of 20 euros (2%). Ouch! Do that 3x's a month....Volksbank 2% fee then USAA 1% ISA fee on 3000.00 euros.

10 years, 7 months ago

OH WOW, I did not know they charge that much. So I guess it is safe to disregard my last. Maybe the Kreissparkasse that JOFTAA spoke of would be better. Im sure he will advise us newbies soon lol!

How are you enjoying Germany so far? It looks like I will be arriving in country on Saturday.

Would you like to contribute? Add your reply to this topic