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Robert Mitchell provided this useful information 8 years, 9 months 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.



8 years, 3 months ago

Go back to the original post in this topic and take a look. It is confusing because we mention a few things, but the bottom line is this. I went back to Capitol One for my checking account. No ATM or ISA fees when using the ATM card to withdraw Euro from a German ATM. So, get your Euro using your Capitol One ATM card and deposit it into your German bank. Withdraw Euro, as needed, from your German bank, but it is best to use the money to pay your German bills. If you have a Service Credit Union account, you can do the same thing, but you are limited to how much ATM/ISA fees you can save each month.

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raivin01
8 years, 3 months ago

THANK YOU SO MUCH FOR POSTING ABOUT THE VENTURE CARD!

I just applied through the link above and it said we should hear back in 7-10 days. The ISA fees suck here so I will be happy to have a card that does not charge them. I've only used a credit card off base once when I was in Belgium and really wanted something and we didn't have enough Euro on us. My card charged me 3% to convert the purchase!

We try to always have enough Euro with us when we travel, but you never know when you will find that unexpected item that you really want and you don't want to ripped off with fees if you buy it. I don't want to worry about that anymore. This card will allow us to pay everywhere we can with the Visa card, get a better enchange rate and allow us save our Euro cash for when we are in small local places that don't accept credit cards.

I'm SO happy I was poking around this site today and ran accross this discussion!

7 years, 11 months ago

If there are any AF finance experts here; question is, on Mypay can you set an allotment w/ a German bank account number and routing number. I appreciate it if the answer is not answered by another question JOFTAA

7 years, 10 months ago

Rmitchell or JOFTAA,

question on opening a German bank account. I am active duty and didn't plan on getting a passport til now (when I arrived). Is there something else they (the bank) will take to open up an account with them, while I wait on my passport?

thanks!

7 years, 10 months ago

Quote by peteryuhu:
Rmitchell or JOFTAA,

question on opening a German bank account. I am active duty and didn't plan on getting a passport til now (when I arrived). Is there something else they (the bank) will take to open up an account with them, while I wait on my passport?

thanks!


When I opened my account, they insisted on a passport. I did not have it with me, so I offered my ID card. No dice. From my experience, a passport is the only way to go.

Oh, has anyone noticed that nobody answered the question asked by vigileer? If you want information, and you want accurate information, but you stipulate how the answer should be formatted, people may just ignore the question. I know I do. After all, if the question does not have all of the information for a proper answer, and another question is necessary, then so be it. But, vigileer made it clear that the answer should not contain another question. I decided to skip answering the question as to not insult the poster.

7 years, 10 months ago

Lol, agreed, I'm an AF finance expert I suppose, but decided not to answer that particular question since I wasn't sure I could do it as stipulated! Well I guess I could have given a 1 word answer. ;)

7 years, 10 months ago

Update for those of you using or considering a CapOne checking account to avoid foreign fees... currently, they don't charge for international cash withdrawals. However, starting August 15th there will be a 3% charge. The High Yield Free Checking Account will not charge the 3% international fee. The catch with that account is that you have to maintain a combined $5000 balance across all CapOne checking/savings accounts or your High Yield account will be converted to a Rewards checking account after two months and then you will have the 3% fee.

7 years, 10 months ago

The catch with that account is that you have to maintain a combined $5000 balance across all CapOne checking/savings accounts


This is with the Capital One banking. This is NOT with the Capital One credit cards! I spoke to two different reps at Capital One, and both said the same. Capital One banking has completely different policies.

Signup for Capital One Venture Card HERE:

To sign up for a Capitol One Venture Card, click HERE. Once the new window opens, find Capital One or Visa in the left hand column and click on it. Now you can choose to apply for either of the Venture Cards. It is very important that you apply online in order to support this site. If you apply by phone, this site gets no credit. All money earned for your application is used to keep this site online. And, be 100% assured that all information entered into your application is 100% safe. We never see any information once you click the link above. Thank you for your support!

7 years, 9 months ago

JOFTAA: First, thank you! If I am shopping in/around Germany, and the retailer allows me to pay in Euros, dollars or credit card, which should I choose?

7 years, 9 months ago

Quote by chaplainfoust:
JOFTAA: First, thank you! If I am shopping in/around Germany, and the retailer allows me to pay in Euros, dollars or credit card, which should I choose?


This is a very good question. I am glad that someone has finally asked.

If you use Euro, and you bought it at a favorable exchange rate such as by using your Capitol One bank account with no ISA fees and no ATM fees, then this is a good deal. Just be sure you get your Euro at a favorable rate. Using DoD banks is NOT a favorable rate.

If the merchant allows you to use dollars, compare the Euro price being offered to the Dollar price being offered and see what the exchange rate is. For example, if the item is 1€ or $1.40, the merchants exchange rate is .7142. Today's exchange rate with Forex is .813. This means the merchant is charging a very large amount to exchange your money. You'd be better off paying Euro in this case. Always do the calculation. The way you do this is to divide the Euro price by the Dollar price. For the above example, it is 1÷1.40.

If you are good at managing your money, and you pay your credit card debt in full each and every month without fail, then paying with a credit card is your absolute best bet as long as the card doesn't charge any fees for using your card outside the U.S. The Capitol One Venture Card has no fees, and gives you between 1.25 - 2 points for each dollar spent, depending on which card you get. Not only do you get the points, not pay a foreign transaction fee, but you also get to use Capitol One's money interest free. To me, using a credit card is a no brainer as long as it meets the criterion. Also, when using the Capitol One card, you know you are getting a great deal on the current exchange rate at the time of your purchase. Some merchants will swipe your card and give you a choice of Euro or Dollars. TKS does this. It's better to have TKS charge your credit card in Euro since they use DoD's exchange rate. Just remember to pay in Euro (on your credit card) if it is a better deal at the time of purchase. It most always is.

If you use the link above to get your Capitol One card, this site gets a small commission which helps us keep the site online. Thank you for using our link, above. Also, be sure you check the terms and conditions of the bank you choose to withdraw Euro to be sure there are no charges.

7 years, 9 months ago

Last week (8 Aug 12) my colleague needed to withdraw $2,000 worth of Euros. He checked the DoD rate at Community Bank on base, and it was $1 = 0.7935 Euros, giving him 1587 Euros. He checked the Int't Exchange Rate at the same time, and it was $1 = 0.7846 Euros, giving him 1569 Euros. He gained 18 Euros by shopping the DoD rate on base. ... Is this a fluke?

7 years, 9 months ago

Last week (8 Aug 12) my colleague needed to withdraw $2,000 worth of Euros. He checked the DoD rate at Community Bank on base, and it was $1 = 0.7935 Euros, giving him 1587 Euros. He checked the Int't Exchange Rate at the same time, and it was $1 = 0.7846 Euros, giving him 1569 Euros. He gained 18 Euros by shopping the DoD rate on base. ... Is this a fluke?


Probably is a fluke. He probably got a bad rate from where he looked. If your friend can find Euro at a worse rate than DoD, then he's looking in the wrong place to get his Euro. I have never exchanged Dollars for Euro at DoD, and have ALWAYS had a better rate than DoD.

Edit: I just noticed that the date you posted (8 AUG 12) is a Saturday. It is possible that the DoD rate could have been better. Here is why: On Friday afternoon at 4pm (CET), DoD locks the exchange rate until Monday afternoon at 4p (CET) when the rate changes again for DoD. If during that period of time when the rate for DoD was frozen, it is possible that the "real" exchange rate was not as favorable. However, the moment the rate at DoD changed again, I'd be willing to bet that the DoD rate was not as good. There is always a brief period of time in which the DoD rate is frozen and the real world rate can change and not be favorable, but it is rare.

During volatile times with the Euro, when there is a lot of movement, it is possible that because of the locked DoD rate for the weekend, you could possibly, for a very brief time, get a better rate. I have not seen it happen myself, but the Euro was not swinging nearly as much when I was trading Euro. Check the rates on 11 AUG to see how they would have compared (after DoD changes from the locked weekend rate).

Quote by libra71:
Update for those of you using or considering a CapOne checking account to avoid foreign fees... currently, they don't charge for international cash withdrawals. However, starting August 15th there will be a 3% charge. The High Yield Free Checking Account will not charge the 3% international fee. The catch with that account is that you have to maintain a combined $5000 balance across all CapOne checking/savings accounts or your High Yield account will be converted to a Rewards checking account after two months and then you will have the 3% fee.


I called Capitol One this morning and spoke with a friendly rep by the name of Dana (I hope I spelled her name properly). She said that this is absolutely not true for any account that is opened online with Capitol One.

Here is the real catch.... There is no way to open a new Capitol One online banking account until their merger with ING is complete. You can, however, open an account in a Capitol One physical branch and open an account that has no fees. The states are Texas, Louisiana, Virginia, Maryland, Washington D.C., New York, New Jersey, and Connecticut. You can open an account in one of the branches in a state above, and manage your account online. This kind of stinks for people living in a state without a branch, but I would hope that the merger would not take too long.

Who knows, perhaps there is a friendly rep at Capitol One who can figure out a way for those in the military to open a branch account over the phone without having to reside in one of the states. After all, if I were a Florida resident, I would still be able to fly to Texas and open an account, right? Surely there must be a way for Capitol One to open an account for military members so we don't have to deal with ING and pay fees. Who knows, maybe a friendly rep (hi, Dana!) will see this message and reply.

7 years, 9 months ago

Oh my, previous posters have posted so, so much wrong and bad advice. Here is the real deal.

1. Use only off-base ATMs. It is true that DoD-sponsored banks charge you 2.5% higher exchange rates (in both exchanges dollars to euro and euros to dollars). DoD does not pay us 2.5% more money... DoD-sponsored banks also charge this 2.5% on all euro transfers, plus a buck a transaction.
2. Use only an off-base German bank to pay your euro bills. It's simple to establish an account. A passport is required for most banks.
3. Do not pull euro from SCU/Community bank accounts (via German bank ATMs) to deposit to your German account because the cap on paying ISA/exchange fees is quite low now ($20 a month for SCU). Instead, write a US check in dollars and deposit that check into your German bank account. The cost is negligible (it cost me about 23 euro total to deposit $20K into my German account). There are NO other fees. Do not make monthly deposits as you'll be paying close to 20 euro per deposit. The higher the deposit amount, the lower the percentage you'll pay to convert those dollars to euros. The process takes about 4-7 business days to complete each deposit -- so ensure you're not trying/hoping to deposit today and make euro payments same day or next. Repeat the process one month before you're running out of euro to pay the utilites/mortgage, etc and you're good to go.

7 years, 8 months ago

Thanks for the information. So much to learn... I hadn't yet thought about exchange rates, foreign currency, and how to manage pay in US $$.

My family will remain CONUS after I move to my new job later this year until my daughter completes school next spring. Should I continue to have DFAS direct deposit my pay into our home station bank account, as we have been doing, and then write a check to a new German bank account to cover my expenses there?

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On an unrelated note, obviously from a new member, - how can I stay logged on? This site seems to disengage after just a few minutes.

7 years, 8 months ago

Quote by Q Q Q Q:
Thanks for the information. So much to learn... I hadn't yet thought about exchange rates, foreign currency, and how to manage pay in US $$.

My family will remain CONUS after I move to my new job later this year until my daughter completes school next spring. Should I continue to have DFAS direct deposit my pay into our home station bank account, as we have been doing, and then write a check to a new German bank account to cover my expenses there?

*
On an unrelated note, obviously from a new member, - how can I stay logged on? This site seems to disengage after just a few minutes.



There is a lot of info in this topic, so you probably missed that part that says to NEVER convert U.S. Dollars into Euro by depositing U.S. funds into a German bank. You'll get hosed. Read through the posts one more time, it is worth the reading to save a ton of cash. The bottom line is to use a bank that will allow you to remove money from an ATM while in Germany and not pay ATM fees or ISO fees. This allows you to go to a German ATM at your bank, withdraw Euro, and then walk the Euro into your bank (a few feet away) and deposit it. This way, you get the exchange rate of your bank, instead of the German bank. Check into Capitol One, as suggested, to see if they still do this. Service Credit Union, too.

As for this site disengaging you after a few minutes, that should not happen. Try deleting your cache and cookies from your browser and see if that takes care of it.

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