Ways to Keep From Getting Hosed When Getting to Your Money Abroad

5/17/2010 3 comments

Easy to get your money, but it'll cost you...

The ways to access your money while traveling have thankfully narrowed to a few simple choices, but banks keep piling on fees to directly put more of that money on their balance sheet each time. In most destinations, you want to carry a bit of cash and access the rest with your ATM card. Then you want to use a credit card for big bills (like local plane tickets) and situations where you need protection if something doesn’t materialize (like a local tour).

The problem is, banks keep finding more ways to get a piece of that action each time, regardless of whether the transaction actually requires any effort on their part. Most credit cards soak you for 2.7% to 3% on each transaction abroad, on top of what they make on the transaction and exchange fees, even if you’re paying in dollars or are in a country where everything is in dollars, like Panama or Ecuador. It’s a virtual pickpocketing job.

The other gotcha is ATM fees, where the local bank may charge you and then your bank at home will charge you again, whether the transaction actually cost them anything or not.

Thankfully, there are ways to get around these fees if you align yourself with the good guys. There are not many of these good guys, so it’s pretty simple: Capital One or a credit union for your credit card, Schwab or Fidelity for your checking account and ATM card.

For the full details, see this excellent article from Kiplinger’s Personal Finance: Cut the Fees Overseas

General, Long-term travel, Travel industry ATM fees, Capital One, travel money, travel tips, traveling money

Comments

Written by Steve Jespon on 5/18/2010. Reply

I hate the way companies, or even governments, are so sneaky in the way they take your money. If they have a valid reason to take it they should be able to charge you straight up.
Written by Carolina Bolado on 5/19/2010. Reply

We got a Capital One checking account and a Capital One Visa card just before our round-the-world trip, precisely to avoid these fees. (Cap One checking still charges $1.50 for using a non-US ATM, but that was better than most banks, which charge the flat fee PLUS a 3-4% charge on the amount of money taken out. We basically take out large amounts of cash at once to minimize the fees.)

So yes, yay to no/few fees, but man, has dealing with Capital One been annoying. We called them before we left with a specific, detailed itinerary of each country we’d visit and when. But they only can put travel alerts for two months at a time. Forget to update that every two months while on the road, and you could be locked out of your money at an inconvenient time. Like when we got off the bus in Melaka, Malaysia at 9 p.m. on a Sunday night and tried multiple ATMs without success; the money changer was closed, and we desperately needed ringgit. Thank God for our Citibank and HSBC cards, which have been lifesavers in times like these.

And not all departments have 24-hour customer service; you have to call during business hours, which is a problem when you’re several time zones away.

While we’re very happy that Capital One is looking out for us in the fraud department, that same vigilance has at some important times made it difficult to use our credit card or access our money. The money we’ve saved on fees is worth it, but after this trip, we’re not sure we’re going to keep our Capital One accounts.
- Written by tim on 5/19/2010. Reply
  
  Carolina,
  
  You raise a very good point: one card alone is not going to cut it. You always need a back-up, even if that means you’re going to get sucked into paying a hefty fee now and then to get at your money. Keep it in a separate place too, in case the first gets lost or stolen.
  
  I don’t think that two-month travel alert thing is unique to Capital One. I had the same thing with Chase (my backup) last year too. American Express seems to be the only one that recognizes people go away for an extended period sometimes. They’re much easier to deal with all around, but you pay for that privilege through annual fees and higher transaction fees.

Ways to Keep From Getting Hosed When Getting to Your Money Abroad

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