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How to Access Your Money Abroad

Traveler friendly ATM and credit cards

Finance on the Go
2 Comments 02 September 2010

The best things in life are free….but you can give them to the birds and the bees. You want money. Your money. Anywhere. Anytime. And, in this connected world, why should you have to give up an arm and a leg for that right? Fortunately it’s now possible to access all of your funds from anywhere in the world without losing a chunk of it in the process. You just have to do your homework first. (It’s okay. We did it for you.)

Nearly all banks charge a foreign transaction fee when you use your ATM or credit card overseas. This can be 1 to 3 percent or a flat fee of $3 USD. Also, don’t expect to see your bank’s ATM on every street corner of South East Asia. Instead be ready for all sorts of foreign banks you’ve never heard of each charging you flat ATM fees as high as $5 USD per transaction. And that’s if they work with your bank in the first place. The costs of getting your money while abroad all add up very quickly.

Sure, you could bring a wad of cash with you from home and rely on local currency exchanges, but this is neither safe- you could lose it or get robbed- nor is it very cost effective. Local currency exchanges may claim that they don’t charge a fee, but that’s only because there’s an implicit fee in the poor exchange rate they give you (See Exchange Rates Explained.) Using traveler cheques is safer but the exchange rate for cashing those is even worse.

Here’s a better alternative. Find a credit card that doesn’t charge foreign transaction fees and a bank that will cover your ATM fees and use both as your own personal currency exchange. These rates change often so it’s important to verify them yourself before you head abroad. FlyerGuide maintains an excellent list of foreign transaction fees for dozens of banks.

For my trip, I went with a free Capital One credit card and a free E-Trade checking account. Connected Traveling is NOT affiliated in anyway with either banks.

Capital One is one of the only major issuers that waves foreign transaction fees in order to attract new customers. Monthly statements specify the exchange rate used on each transaction so you can see how much you’re saving over the local exchange kiosks.

Though more commonly known for its brokerage accounts, E-Trade offers checking and savings accounts that come with an ATM card which can be used anywhere in the world. Up until recently E-Trade waved all foreign transaction fees. As of this writing, it now charges a 1% ATM fee on foreign transactions. However, they refund you in full any ATM fee that the local bank charges, be it a few cents or a few dollars. This is a huge saving and compensates for the new fee.

As an added perk, E-Trade interests rates are several times the national average. They also provide free bank-to-bank transfers so you can keep your old bank and just transfer over a few hundred dollars as needed with their great iPhone app (see iPhone – Essential Travel Apps).

Again, ALWAYS call and confirm rates before opening an account or using your cards overseas. While you’ve got the bank on the phone, be sure let them know you’ll be using your cards overseas so they don’t lock your account. Give them a date range, a list of countries you’ll be visiting and a phone number where they can leave you messages in case of any suspicious activity. (Skype is great for that).

All of these fees may seem trivial but they add up quickly. In my case, by avoiding foreign transaction fees on credit card purchases as well as local ATM fees, I saved $887 on my year around the world. That’s an extra flight to pretty much anywhere in the world….

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2 Comments so far

  1. TRX says:

    Great article, I was just going to get friends to keep topping me up with money from Western Union, but that gets REALLY expensive fast.

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