Robert Mitchell provided this useful information 8 years, 10 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.



7 years, 9 months ago

Wow, the ignorance and naivete of some (JOFTAA) is amazing. I bank with Kreissparkasse Kaiserslautern. I deposit US dollar checks (very high amounts) and pay around euro 20-25 TOTAL to convert dollars to euros. And obviously, at the international exchange rate; not the low SCU/Community Bank rates. If others want to pull $20K worth of Euro out of ATMs over the span of weeks (typical max ATM withdrawal is $1000 per day per ATM card), pay the 1% ISO fee, go for it. SCU used to waive all ISO fees; no more. Now they wave up to $20 per month only.

As far as retaining a US bank versus getting a bank/CU here, I'd recommend opening an account here. As far as I remember, my SCU account was free to open/maintain as long as I direct deposit my pay to them. The value, in my opinion, of a local account is two: 1. If you need to pay a euro bill on base (you shouldn't ever do this, but just in case, since you'll pay 2.5% worse exchange rate. 2. If you need a cashier's check (I needed one for passport or USAREUR driver's license renewal -- I forget which). It was right across the street and saved a trip to the APO to get a money order.

I do concur with JOFTAA about Capitol One credit cards. I've had one for years. No annual fees and no 1% international transaction fees. You pay the international exchange rate for the day of purchase (or posting to your account). Ensure you pay your monthly balance in entirety every month and this card costs absolutely nothing to you. Use this card for all international credit card purchases. And ensure you inform Capitol One you are a frequent traveler so as you make purchases in different countries, they won't be blocked due to possible stolen card (it happened to me once even AFTER I'd told them I travel frequently within Europe). Just remind them. One negative, and I don't know why, the Capitol One card is usually rejected at the French autobahn pay booths. Just have the cash on hand to pay these tolls just in case. Or skip their pay roads and use back roads for shorter French travels.

Lastly, do not EVER, EVER pull local currency from an on-base ATM. Doing so is an automatic 2.5% loss to you and gain to your bank/CU.

7 years, 9 months ago

If you are going to call someone ignorant, you ought to get your facts straight first, travelmeister. For the three years I was in Kaiserslautern (PCS 3 months ago), I had a bank account at Kreissparkasse Kaiserslautern and mainly used the branches in Krickenbach and Linden. At no time, ever, was it a better deal to deposit my U.S. Dollars into Kreissparkasse and have them instantly converted into Euro. Never. Ever. Getting Euro by exchanging Dollars at Kreissparkasse was a losing deal, every single time.

I got a better rate from my Capitol One checking account. I have said it before, and I will say it again. You get a better rate using Capitol One checking and taking Euro from the Kreissparkasse ATM, and then walking that Euro a few feet into the bank lobby for deposit, where there is no conversion because you are depositing Euro. Capitol One Checking was, every single time, without fail, the better rate between using Kreissparkasse or a DoD bank. Period. End of story. This of course excludes the monthly allotment from SCU, which we have already determined earlier in this topic, is the Visa rate, but is limited.

Since I passed a Kreissparkasse, every single day, sometimes 3 or 4 times, it was very convenient for me to stop at the ATM, withdraw Euro using my Capitol One Checking account to get Euro, and deposit these Euro into my Kreissparkasse account.

As for the rest of what you wrote, you did nothing more than repeat what had already been written, several times, throughout this topic of discussion.

Regarding the SCU $20 fee waiving limit. This is true, and it has already been discussed earlier in this topic, but thank you for feeling the need to repeat it. Although not the most convenient, due to the daily limit, you can still get the Visa rate from Capitol One Checking at the ATM at Kreissparkasse (or any other German bank for that matter). Like I said before, I drive or walk by the Kreissparkasse several times a day. I just grab the daily limit in Euro and deposit the money in the bank lobby. You get the same Visa rate that SCU offers, only there is no $20 reimbursement limit per month. Of course, I am repeating myself from earlier in this topic, but it appears that it needs repeating for at least one person.

Here is an experiment for anyone who wishes to try it. Take US$100 into a Kreissparkasse (or the German bank of your choice) and ask them how much Euro they are going to give you in exchange. Now, go to the ATM and withdraw the amount of Euro the bank said you'd get using your Capitol One Checking ATM card. See if the amount Capitol One takes from your account is less than $100. I'll bet you that it is.

7 years, 8 months ago

Quote by JOFTAA:
There is a lot of info in this topic...


Since this seems like a lively topic, and one that concerns most of us, I thought I'd add my $.02.

The way I've decided to handle my USD (US Dollar) to EU Exchange is by using a free service called XE Trade which will allow me to set up an account to manage direct bank to bank transactions.

I can use XE Trade to draw Dollars from my Service Credit Union (SCU) account to "sell" Euros to my local German Credit Union account. I can lock in the exchange rate I want (they call it a "bid") and then XE makes the deposit in Euros at the exchange rate I bid and locked in.

I'll then be able to use my German account for any Euro transactions (bills, beer money, ect.), and my SCU account for times I need to use USD.


The downside to this is that don't get any reward points for using the cards mentioned in earlier posts. The upside is that I can see the exact exchange rate I'm bidding on, and I don't have to make any trips to either bank to withdraw and/or deposit money.



I've checked with SCU, and since XE Trade is drawing out USD via EFT (Electronic Funds Transfer) there aren't going to be any ISAs (International Service Assessments.)



Everything I've been able to see is that XE Trade is offering competitive exchange rates. They're making money as a company by servicing 18+ million unique users per month.



Anyone care to jump in and poke holes in my plan? My goal is to keep as much of my pay as possible while minimizing the fuss.

7 years, 8 months ago

Quote by DWinchell:
Since this seems like a lively topic, and one that concerns most of us, I thought I'd add my $.02.

The way I've decided to handle my USD (US Dollar) to EU Exchange is by using a free service called XE Trade which will allow me to set up an account to manage direct bank to bank transactions.

I can use XE Trade to draw Dollars from my Service Credit Union (SCU) account to "sell" Euros to my local German Credit Union account. I can lock in the exchange rate I want (they call it a "bid") and then XE makes the deposit in Euros at the exchange rate I bid and locked in.

I'll then be able to use my German account for any Euro transactions (bills, beer money, ect.), and my SCU account for times I need to use USD.


The downside to this is that don't get any reward points for using the cards mentioned in earlier posts. The upside is that I can see the exact exchange rate I'm bidding on, and I don't have to make any trips to either bank to withdraw and/or deposit money.



I've checked with SCU, and since XE Trade is drawing out USD via EFT (Electronic Funds Transfer) there aren't going to be any ISAs (International Service Assessments.)



Everything I've been able to see is that XE Trade is offering competitive exchange rates. They're making money as a company by servicing 18+ million unique users per month.



Anyone care to jump in and poke holes in my plan? My goal is to keep as much of my pay as possible while minimizing the fuss.



I also have an XE account and find that it is a decent way to transfer money to Euro. The biggest thing you need to look out for are taxes! XE runs like an open book with the IRS and has very stiff anti money laundering policies. If you buy 10,000€ for $13,000 today from XE and by the first of the year the Euro is worth $14,000 you may have to do some explaining. Not to say that you will owe taxes but you will want to keep solid records of what the money is used for if a question ever comes up.


Now if you get good with this system you can buy your Euro on a margin every month and you could make a good chunk of change every time by selling it back to USD before withdrawing it again as Euro. The key is to be patient and only buy when there is a dip and be ready for a quick increase before you get out of it. If you are buying the Euro with money in your Forex account you might as well play it a little and earn some extra money that way. This however will be taxed.

7 years, 8 months ago

Quote by rmitchell248:
I also have an XE account and find that it is a decent way to transfer money to Euro. The biggest thing you need to look out for are taxes! XE runs like an open book with the IRS and has very stiff anti money laundering policies. If you buy 10,000€ for $13,000 today from XE and by the first of the year the Euro is worth $14,000 you may have to do some explaining. Not to say that you will owe taxes but you will want to keep solid records of what the money is used for if a question ever comes up.


Now if you get good with this system you can buy your Euro on a margin every month and you could make a good chunk of change every time by selling it back to USD before withdrawing it again as Euro. The key is to be patient and only buy when there is a dip and be ready for a quick increase before you get out of it. If you are buying the Euro with money in your Forex account you might as well play it a little and earn some extra money that way. This however will be taxed.


Thanks for the reply. I figure I'll use my XE account initially for simple currency conversions for personal use. As long as I always buy Euros and never sell them back, I shouldn't incur a tax liability. As I get better at speculating in the currency market, I might try my hand at making some money at it.

Have you found that the exchange rates offered by XE are the same or better than the other options posted about here in the thread?

7 years, 8 months ago

Quote by DWinchell:
Thanks for the reply. I figure I'll use my XE account initially for simple currency conversions for personal use. As long as I always buy Euros and never sell them back, I shouldn't incur a tax liability. As I get better at speculating in the currency market, I might try my hand at making some money at it.

Have you found that the exchange rates offered by XE are the same or better than the other options posted about here in the thread?


I am sorry, I only have a second Winchell but so you know even without converting it back to USD you could face a tax burden or at least the situation that you need to clarify.

If you buy 10,000€ today for $13,000 and in 2 months spend the 10,000€ when it is worth $14,000 you have essentially profited $1000. It is sad to think that you could have profited in this way but it is how it works.

The same goes for the guys cashing checks or pulling money from ATMs. The difference is that checks and ATM withdraws are not reported to the IRS in the same manner. You can also get away with it much easier being here under SOFA as the IRS essentially grants you a status as if you were still in the US spending USD on most of your transactions. But since XE does not know your status you will be reported in the same fashion as anyone else. There is little to worry about but you still should have some book keeping to back it up and show that you paid your rent, food etc as opposed to invested it here in rental properties, businesses, German bonds and things of that nature.

7 years, 7 months ago

Went to a capital one bank branch in New Jersey intending to open a checking account with no foreign transaction fees and apparently they stopped that account type. Currently the FTF on their checking account is 3%...boooo! Oh well the venture card will still be a deal that I will jump on.

7 years, 7 months ago

Quote by BillyHo:
Went to a capital one bank branch in New Jersey intending to open a checking account with no foreign transaction fees and apparently they stopped that account type. Currently the FTF on their checking account is 3%...boooo! Oh well the venture card will still be a deal that I will jump on.


I believe this is because you went into the branch. As noted earlier, the in branch and the online checking accounts are not the same. Check out the terms and conditions of the online checking account. You may still be able to get the account without any foreign transaction fees. Also, if you do use Capitol One for the Venture Card, please remember to use our link so we can get some credit to keep this site running. Thanks.

7 years, 7 months ago

Quote by JOFTAA:
... Also, if you do use Capitol One for the Venture Card, please remember to use our link so we can get some credit to keep this site running. Thanks.


The link you provided is blocked by our base IT web monitors. Will your credit be noted if you send me the link?

7 years, 7 months ago

First off, thanks for posting this information online, it was very helpful.

I do have a follow up question. How would a DoD civilian fill out the DSSR 130 worksheet considering the current discussion? We just arrived to Germany so I will first fill out this worksheet based on estimates of how much rent and utilities would cost per year in Euro. That I get. But when it's time to reconcile after 12-15 months here in Germany, I will disclose to the government how much I actually paid...which will be in Euro. There will be no way to find out how much I actually paid in U.S. dollars: my German account will have lots of ~750 Euro deposits and the 2000 euro rent, ~100 euro cell bill, etc. My U.S account will show my DFAS allotment and several ~$1000 withdrawls.

The topic of reconcilation was mentioned in an older thread (http://www.everythingkmc.com/showthread.php?t=13763). A link to the DSSR 130 worksheet is here: http://aoprals.state.gov/content/documents/1852_LQA.doc

When I reconcile next year, block 15 of the DSSR 130 asks: "

Foreign currency rate used to compute expenses listed under item 16." Item 16 being the total cost of rent, to include other allowable reimbursable expenses. From what it looks like, DFAS or my HR department, will get a snapshot of the US/Euro exchange rate at the time the reconcilation is processed in order to calculate if we were over/under paid. I assume using the DoD exchange rate at month #12 or #15 of my time here.



How can this process account for the 12-15 month fluxuation in the exchange rate and how much we actually paid in dollars? Can someone cite the JTR Vol 2 section and find out that government is required to use the DoD exchange rate and that any difference can be retained by the employee?



Thanks again...

7 years, 6 months ago

I have a big question. I have a Service Credit Union Debit card and had been using this method. But recently my card broke and they issued me a new one with a chip. Now it seems like my card doesn't work in most off base ATMs. Does anybody know if this will no longer with with Service Credit Union.

Thanks,
Paul

7 years, 6 months ago

Quote by c-5_fred:
I have a big question. I have a Service Credit Union Debit card and had been using this method. But recently my card broke and they issued me a new one with a chip. Now it seems like my card doesn't work in most off base ATMs. Does anybody know if this will no longer with with Service Credit Union.

Thanks,
Paul


You'll need to go into SCU and get a card with a mag strip. They will give it to you right there in the branch.

7 years, 6 months ago

Thanks for the info. First thing when I get a chance I will go in there and ask them for one. Is there a specific name for it because even though the new card they issued me has a chip it also has a mag strip. If I have any issues today I will let you know. But also a piece of info to pass on. I called Bank of America since my SCU card was giving me issues and they managed to refund all my ISA and international ATM fees that I gave them dates for and have set up waviers from now untill forever for all international fees. Didn't even ask for a copy of my orders.

7 years, 6 months ago

Avoid using any card from SCU with the chip in it. Currenly when you use the card with the chip you must pay the DoD exchange rate for your purchases!

7 years, 6 months ago

Quote by c-5_fred:
Thanks for the info. First thing when I get a chance I will go in there and ask them for one. Is there a specific name for it because even though the new card they issued me has a chip it also has a mag strip. If I have any issues today I will let you know. But also a piece of info to pass on. I called Bank of America since my SCU card was giving me issues and they managed to refund all my ISA and international ATM fees that I gave them dates for and have set up waviers from now untill forever for all international fees. Didn't even ask for a copy of my orders.


Interesting info about BOA. They are usually whores about everything. If they are waiving all of your ISA from now on, that is a better deal than SCU who limits you to $20 a month.

Quote by rmitchell248:
Avoid using any card from SCU with the chip in it. Currenly when you use the card with the chip you must pay the DoD exchange rate for your purchases!


Ah! So you are still alive and well. Good to see you.

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