Monday, May 12, 2008

Bank Money Transfers & Exchanges

I've been asked by one of my "many" readers to say more about some practical matters of living in Italy. I just wrote this reply to someone asking about transferring money to Italy and how to avoid the add ons from the banks, so I thought might as well post it here too.

It's pretty hard to avoid the add on fee charged over the wholesale rate you find on the Internet. Those rates are for million dollar exchanges. We do phone transfers from B of A to our bank in Italy. There is a flat fee for the transfer and an add on depending on the amount we transfer. Then our bank here charges a small fee for their service.
If you are in Italy use your credit card from the US or just take money out with your atm card. Either one is a bit less than or the same as bank transfers. I found PayPal to be good. You can set it up to transfer money in from you bank account, they put the money in a money market account and pay interest. They only charge $1 for atm withdrawals and the exchange rate is usually better than the bank. If you use the atm card as a charge card when purchasing you can set it up to get 1% cash back.

We also use a credit card that gives us miles on a frequent flyer program. We pay it off every month using our US checking account. So we get mileage and also avoid having to transfer money for daily expenses such as groceries, clothes, etc.

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