BANKING ABROAD
"The time has come, the Walrus said, to speak of many things, of sailing ships and sealing wax..." and stuff like
banking.
See what I did there? Crafty, that bit of poetry! I know. I'm a total nerd. Moving on...
In preparation for my upcoming move, I've done quite a bit of research into the best way to bank abroad. If you're not careful, you'll end up spending hundreds, possibly thousands, of dollars in banking and credit card fees while abroad.
I'm headed to Israel in less than a month and thought now would be the perfect time to jump into an international-friendly checking account. My upcoming trip will give me the opportunity to test it out and make sure it's what I want while living overseas.
Here's what I've come up with as the best solution for me:
I'll be using a combination of money management methods, credit cards, my savings and checking accounts (US), Debit Cards and most likely I'll open an Italian bank account, eventually.
First:
Credit Cards.
I purchase everything using credit cards. Everything. Then I pay them off monthly. This gives me points and miles for flights. Currently I favor using the Chase Sapphire card. But I also have a British Airways card. Both of those cards have zero foreign transaction fees.
(To be perfectly honest, I'll probably get rid of my BA card as soon as I've used up all of my miles as the amount of miles needed to purchase flights are crazy high and don't include fees, which are higher than for any other airline out there because British Airways are based in the UK. And the UK has INSANE amounts of fees for flights. I get more for my mileage and money by using my Chase Sapphire card, which has a great, and very flexible, rewards program.) Both of the cards I just mentioned are "chipped," which is a feature that is required in credit cards in many European locations. If you use a non-chipped US credit card, odds are you'll run into this problem if you travel. It's annoying.
Second:
Cash, Bank Accounts & Debit cards
I'm going to need cash while traveling. Most places in the US accept cards of some sort these days, but the further you get from big cities anywhere, the more you need cold, hard cash. Abroad, cash is still more readily relied upon than cards are.
Cash poses an interesting problem.
If you exchange at the exchange booths, you're going to go broke, quickly. Those places charge exorbitant rates to change your money. Ridiculous. Also, you don't want to carry too much cash around with you, that's a recipe for disaster, or mugging, or both. The solution? A bank account with no international transaction fees and zero ATM fees.
After a bit of research, I decided to open a
High-Yield Checking Account with
Schwab. Many travelers these days LOVE this account (Windtraveler, Wandering Earl, etc.) The account is linked to a brokerage account that requires a minimum $1,000 starting balance. But after the brokerage account is opened, you can transfer that $1k into your checking account and use it all up to your heart's content. There is no minimum balance after the initial deposit in either the brokerage or checking accounts.
It seems like a little bit of juggling, but it's well worth it. Here's why:
-While traveling in a foreign country, the easiest, cheapest way to get cash is via ATM card.
-No international transaction fees (Often banks will charge a 4% "transaction fee" on whatever amount you withdraw overseas)
-No ATM fees, worldwide. (Any ATM fees you incur will all be credited back to your account. From anywhere. From any bank.)
-Link other accounts (other banks) to your Schwab account and transfer money, fee free. I don't plan on keeping a large sum of money in this "travel" checking account. I'll transfer money into from my primary banking accounts as needed. That way, if anyone ever gets ahold of my ATM card, I won't have much to lose.
Are you traveling abroad? How do you handle your money?
"Do yourself a favor and prepare ahead of time," says our resident Expat Expert, Mary of
My Life in Scotland has some great tips about banking abroad. To read more about what she suggests, check out her
blog!
Questions? Moving abroad yourself? Leave a comment and let me know what I can do to help! :)