This is the 2nd post about wiring money overseas. In the first post, I talked about words we come across
And what great timing for this post! Today I need to wire just under $3,000 to rent a RV for a month out of Germany.
Let’s use my case as an example scenario…
I need to pay about 2217 euros to pay off the balance on a RV rental (family vacation coming up in June).
My options are these:
1. Use local (Czech) bank to wire transfer ~55,500 Czech koruna.
2. Use Paypal and their “send money” option.
3. Use our bank account in US to wire transfer ~$3,000 USD.
What makes my mind? Fees, interim charges, & the ever-fluctuating exchange rates.
Here are some facts I know:
Fact: The Euro/Czech koruna exchange rate is fair, but has been better.
Fact: Dollar/Euro exchange rate is great for option #3 now. (Savings of ~$300 from a month ago)
Fact: Paypal charges up to 3.9% for int’l money transfers.
First, a few words about my attention to exchange rates. Caring about exchange rates is all fine. But unless you have accounts based on different currencies (and with money), then the knowledge does you little good. Right?
I learned this the hard way. “Oh, if only I had enough dollars in our US account, I could have saved quite a bit, this time….hmmmm.”
Now, the fact that Paypal would charge me 3.9% for a transfer of just under $3k ($2,987) pisses me off.
That’s $116; earned for doing what exactly? So that rules out option #3 of using Paypal. They may be fine for minor e-commerce, but Paypal is no replacement for a international money transfer done through banks.
Fees and Charges
Multiple fees and charges here.
For the international money transfer itself, banks charge between $1 and $10. That’s paid by the sender, taken from the balance. Recipient will rarely get charged to receive money. That’s all typical and you probably know this already. But what you might not know is that the transfer fee, say $10, can be taken by each interim bank used for the transfer. For an IBAN transfer, each bank that your transfer goes through is entitled to take their little bite from the balance (yes, without asking permission). The way to avoid surprise is to ask your banking rep ahead of time “What amount will arrive if I transfer $X?” But when dealing with currency exchange, that question gets tougher for them to answer.
Lastly, a fee for exchanging money is common. It’s and it’s typically a flat fee (not proportional to the amount). In short, the larger the transfer, the smaller the exchange fee means to you.
There are other options.
– You can use Western Union or Travelex. But not a smart idea between strangers (ala 419 scams or “Dear Sir, I will share 60% of FIVE MILLION DOLLARS…”). Also, if you use these services, you’ll be shocked how little money ends up in your pocket. One example, sending $400 by Western Union might eat up $40-$50. If you believe “Oh, but it’s worth it!“, then you’re desperate.
– You can carry up to $10,000 undeclared in your carry-on bag. Don’t laugh; it’s perfectly legal. And if some uppity TSA agent insists on detaining you, then you remind them of Steve Bierfeldt.
Well, I’ve got to run. I have to transfer some cash to Germany. Oh, my choice? I’m using our US bank account and I’m sending $2987 today. It will cost me $10. Not bad.
Any questions? Write and ask – I’m here for you.