Banking in Italy: Credit Cards, ATMs, Fees, Exchange Rates

Helpful Pages

Banking Overseas

  • Contact the customer service department of any and all U.S. credit cards you may use while living in Italy. Inform them you will be living in Italy. You will also need to contact them when you plan to take trips outside of Italy.
  • Find out their policies and fees regarding foreign transactions.
  • Ask if smart chip and PIN cards are available, since they are widely used in Europe.
  • Once you get to Italy, it is a good idea to set up an account with a local Italian bank to pay for utilities (if you live on the economy) and auto passes for the toll roads in Europe. The exchange rate is a lot better than working with an American bank.

Credit Cards

  • Credit cards are the cheapest way to pay for things in Italy and in any foreign country. The exchange rates average 9% better than cash withdrawals from an ATM.
  • While paying with credit cards does get you a better exchange rate than with cash, know that Visa and MasterCard charge a 1% foreign transaction (conversion) fee, plus most card-issuing banks tack on an additional 1-3% commissions of their own.

What Credit Cards are Accepted Overseas?

  • Visa and MasterCard are widely accepted in Italy
  • Discover card is not widely accepted in Italy. However, you should be able to use it is on base. Any business displaying a Diners Club logo will accept Discover
  • American Express acceptance is very rare, but is accepted on base.
  • Look for credit card logos at store front windows to see what cards are accepted

Smart Chip Credit Cards

  • Credit cards with computer chips that can be scanned and require a PIN are very common in Europe.
  • Some merchants and services in Europe will only accept the CHIP-and-PIN smart cards such as gas stations (especially after-hours), bike rental kiosks, toll booths, ticketing machines for trains and public transport.
  • The smart chip cards make it less likely that someone can steal your credit card information, which can happen a lot in Italy.
  • Call your U.S. bank to see if they offer smart chip cards. USAA offers a smart chip credit card (World MasterCard), but not a debit card.
  • It is also recommended to get a smart chip card through your local bank in Italy because some foreign cards are not accepted.
  • Some banks may only issue a chip-and-signature card, rather than a chip-and-PIN. For purchases of less than $50, this is usually not a problem, as no PIN is required on those transactions. For larger purchases on card readers manned by an actual person this should not be a problem either, as it will cause the machine to print a receipt for you to sign. Problems arise for charges greater than $50 at an automated machine where you will most likely need a PIN.
  • Note: Some banks issue a PIN with a chip-and signature card, but this is only to access the cash advance feature.

Cash Advances

  • Whenever you get a cash advance (ex. ATM withdrawal) on a credit card, the bank starts charging you interest at the highest rate possible immediately, not at the end of a monthly cycle in which you do not fully pay off the card as with most purchases.
  • Interest will keep accruing until you pay off your entire credit card bill.
  • You may be able to avoid interest by overpaying your credit card bill (by however much you expect to withdraw in cash advances, plus purchases), because they can only charge you interest if you are carrying a balance.
  • Some credit cards will also charge a foreign transaction fee of 2% – 4% for cash advances.
  • Use cash advances only in emergencies. Otherwise you should use your debit or ATM card.

ATMs (Bancomats)

  • Withdrawing cash from an ATM is the second cheapest way to pay for things in Italy.
  • ATMs in Italy are known as Bancomats and dispense money in euros. Your bank will convert the amount of your withdrawal into dollars using the most beneficial exchange rate possible. Note: Italian ATM machines will give the best exchange rates
  • To avoid fees and interest, it is best to use your debit card or your local bank ATM card, rather than a credit card when withdrawing cash. Credit cards may charge fees of 2- 4% for cash advances from the ATM, plus an accruing interest that begin the date you withdraw money.
  • For daily withdrawal limits you should account for the currency conversion when withdrawing euro in Italy. A $500 USD limit in euros would be around 380 euro.
  • Always cover the PIN pad when entering your PIN. Your debit card can be cloned at an ATM by a skimmer that skims the card while a mini camera records your PIN being entered. Some people choose to only use Bancomats on base for added security.
  • Don’t forget to clear out of the ATM/Bancomat before you walk away. Many have walked away from the screen when it still asks if you would like to make another transaction and someone else can walk right up and withdraw cash from your account. Make sure the ATM goes back to the welcome screen.

Foreign ATM Fee

  • Typically a flat fee of $2-$10 is charged by your bank for each use of your ATM, debit, or credit card at an international (out of network) ATM to withdraw foreign currency.
    • There may also be an ATM access fee charged by the foreign financial institution that owns the ATM you use.
  • Some waive this fee if you go to their “Correspondent Bank”. Ex. Bank of America’s correspondent bank in Italy is Banca Nazionale del Lavoro or BNL.
  • Make sure your card is compatible with the ATM by locating either the Cirrus, Plus, VPay, or BankMate symbol on the Bancomat and on your card.
  • On base: BNL seems to charge the lowest ATM fee and give the best exchange rate. The community bank charges about $4 more, and the ATM by the PX charges about $12 more. Global Credit Union also has high ATM fees.
  • Off base: the Bancomat (Banca Popolare di Vicenza) right off post is also good. It has no ATM fees and the exchange rate listed online is what they charge. Some prefer to pay the fees on post rather than use an off post ATM for added security.

Foreign Transaction Fee

  • Typically a 2-4% fee for using your debit or credit card in a foreign currency. The fee is calculated as a percentage of the converted transaction amount. This typically applies to everyday purchases and ATM withdrawals.
  • Visa and MasterCard charge a foreign transaction fee of 1%, plus most card-issuing banks add their own fees of 1-3% on top of that.
  • To avoid the foreign transaction fee issued by the credit card company, most will try to use their debit card for purchases so that they only pay their bank’s FTF or sometimes they pay none at all if their bank does not have a FTF on debit cards. *To bypass places that don’t take American debit cards you can choose to run you debit card as credit. Remember that debit cards do not have the same kind of security as a credit card. While you may be avoiding fees, you could also be at risk of having your debit card cloned.
  • Be cautious of 0% FTF cards. They often make up for it by getting you on the exchange rate.

Fees by Card (updated Aug. 2014)

  • American Express:
    • Purchases = 2.7% FTF
  • Bank of America:
    • ATM = $5 ATM + 3% (Visa/MC) or 1% (Amex) FTF
    • Purchase = 3% FTF
    • *On PCS orders overseas, they may waive foreign transaction fees. Most places on the economy don’t take Bank of America cards
  • Barclays
    • Purchase = 3% FTF
  • Capital One:
    • ATM = $0 ATM + 0% FTF
    • Purchase = 0% FTF
  • Chase:
    • ATM = $5 ATM + 3% FTF
    • Purchase = 3% FTF
  • Discover:
    • Purchase = 0% FTF.
    • *The exchange rate is not very good and the card is not widely accepted in Europe.
  • Navy Federal Credit Union
    • ATM = $1 + 1% FTF
    • Purchase = 1% FTF
  • USAA
    • ATM = $0.00* ATM + 1% FTF
    • Purchase = 1%
    • * Refunds up to $15 in other banks’ ATM usage fees each month and USAA does not charge a fee for the first 10 ATM withdrawals. Subsequent transactions will be charged $2.00 each.
    • A 1% foreign transaction fee (MasterCard, Visa and American Express) applies to withdrawals outside the United States. The 1% fee can be waived for first year by sending USAA a copy of your orders. This benefit applies to all USAA-issued Visa’s, MasterCards, and Debit MasterCards. American Express cards issued by USAA are currently excluded from this benefit. *Some have had luck with reapplying after the first year to have the fees waived again for another year.

Exchange Rate

  • When you use your U.S. credit card overseas, the credit card company or your bank will convert euros or other currency into dollars.
  • Credit Card Exchange Rates:
    • Visa: allows each bank to determine its own exchange rate for each country. So with Visa Cards, you will see a wide variation of currency exchange rates from each bank that issues Visa Branded Cards, i.e.. Capital One, Chase, and Bank of America all issue Visa Branded Cards. On the same date, each will have a different exchange rate on foreign currency and then add on their own foreign transaction fee.
    • MasterCard determines their foreign exchange rate for a given currency on a transaction date and then the issuing banks add on their foreign transaction fee. Mastercard’s exchange rate seems to be much closer to mid-market than Visa.
  • DO NOT let a merchant bill you in U.S. dollars! Sometimes a foreign merchant (hotels especially) will try to charge you in U.S. dollars rather than in local currency. The merchant may use a lousy exchange rate when it converts your bill into US dollars, so you might wind up paying both a merchant’s private currency markup in addition to your credit card’s surcharge. Tell the merchant to run your credit card transaction in their local currency or pay with cash.
    • Bank of America, Barclaycard/Juniper, Citibank/Diners, and USAA add the same conversion fee (FTF) regardless of the currency.
    • American Express, JP Morgan Chase, and Wells Fargo do not surcharge U.S. dollar billings.
  • Do not purchase foreign currency at the airport! They have horrible exchange rates and costly fees.
  • If you need to buy foreign currency while overseas, your best option is to use your major bank debit card at a cooperating bank’s ATM. Italian ATM machines will give the best exchange rates
    • Ex. Bank of America has an arrangement in Italy with Banca Nazionale del Lavoro (BNL) to not charge any foreign transaction or ATM fees.

Paying in Euros

  • In Italy, as in most of Western Europe, the official currency is the Euro (€). The Euro is divided into 100 cents with two decimals after the comma.
  • Euro paper money comes into different colors and sizes depending on the face value. 500 Euro bills are violet, 200 Euro ones are yellow, 100 Euro bills are green, 50 are orange, 20 are blue, 10 are red(dish) and 5 are grey(ish).
  • There are also coins: 2 and 1 Euro (both are made with two different metals – golden and silver – and the value is printed big on one side), 50, 20, 10 cents (golden material) and 5, 2 and 1 cents (bronze material). The bigger coin has bigger value. The 1 cent coin is very small.
  • In some European countries (like Greece) it is more common that merchants will only take cash.
  • Taxis can often only be paid with cash (euro). Some taxis accept plastic, but since the driver must pay a 3% commission to the bank, they prefer cash payments.
  • You can often get a discount by choosing to pay in cash at hotels and restaurants.

Banks on Post (Vicenza)

  • There are three banks on post: BNL (Italian), Community (Bank of America), and Global Credit Union
    • BNL is known for having the best exchange rates, which is great for ATM withdraws. You will recieve a free debit card. They do impose a 2-4 euro monthly fee for having an account with them though. You will nee a codice fiscale (Italian social security card) to open up a bank account with them, which is obtained from housing. They can help with setting up automatic bill payments for housing. You can also add minutes to your Wind cell phone through their website. You can also use the highway/autostrada telepass system if you have an Italian bank account.
    • Community Bank: is able to exchange foreign currency such as euros, franks, and pounds. For a fee of $1 they can also give you a Euro check (like a money order) for VAT tax payments. You do not even have to be a Community Bank member for the service.
    • Global Credit Union: is known for giving the best car loan rate.

Theft Prevention

  • Check all receipts you sign, because in Italy it may show whole debit/credit card number on most receipts. If it does, mark out everything except the last four digits of your card number.
  • Always cover the PIN pad when entering your PIN, especially at the ATM/Bancomat
  • Always clear out of the ATM/Bancomat before walking way.
  • Remember that debit cards do not have the same kind of security as a credit card. While you may be avoiding fees, you could also be at risk of having your debit card cloned.
  • Invest in a money belt for walking around in Italy or traveling abroad


  • If you plan to open any stateside investment accounts, you must open them before you PCS. It is a violation of the SOFA agreement to open them after.
  • While you can buy stocks through USAA while in Italy, you cannot buy mutual funds.

Value Added Taxes

  • The Italian Value Added Tax (IVA) in Italy is 20% and it is already factored into the price of the item.
  • As a non-European citizen you are not obligated to pay the VAT. However, it is up to the store owner as to whether or not they will give you a VAT form.
  • In order to get a refund you have to pay at least 155 euro or $212 in a single store.
  • VAT tax and refund requirements vary in each European country.
  • There is VAT Refund Process at the airport for those actually visiting Europe and one for military (see below).
  • VAT Form Process for Military
    1. Go the the store and ask to buy something using the VAT form. (Note: they are not obligated to give you the VAT form, it is up to the merchant.)
    2. The store fills out an invoice and gives you the amount on the receipt without the taxes.
    3. Buy a cashier’s check for that amount (in Euros) from the bank.
    4. Take everything to the Tax Relief office and complete some more paperwork. Pay the VAT fee.
    5. Go back to the store and give them the VAT paperwork and purchase your stuff.

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