Bank Account / Money Useage Overseas Advice

Hey! Will be leaving for RTW trip next year and need advice on the money handling / account setup for overseas. I need help understanding the pre-trip setup to have as far as debit / credit cards and bank accounts goes, as well as the best way to handle spending internationally. Are there better banks to use travel style accounts with? Is it better to go with debit or credit cards? Is there a general amount to carry in the actual region's currency aside from cards? I really don't know too much about this area at all though I'm sure it's not too difficult to reason out.

What is the best way to handle all of this in your guys experiences overseas?

Thanks for reading!


Chris

P.S. If there are already good existing threads on this subject, feel free to send me there!

Chris,

When I did my RTW trip I used debit cards the whole time. I decided it wasnt worth the hassle and just took the hit of the international fee and withdrew in the local currency. I would always take out the maximum amount (like $200) so that I wouldnt get hit as much with the fees and tried to keep an extra $200 hidden (in Europe I would more than likely keep more). I believe CapitalOne has no international fee and it is probably worth investing in. I could use my mastercard at almost all ATMs except in El Salvador. I kept one debitcard that was Visa and one that was mastercard so it wasnt a real issue. When you cross borders the exchange rate is normally bad so I would just exchange a minimum amount or what I had left in the currency of the country before.

I had travellers checks too but most people dont take them and I was told by my bank that they are really passe. I probably now would have someone wire me money from home if I was in a real emergency. Hope it helps and enjoy!

When I travel, I have one ATM (debit) card and two credit cards - Visa and a Mastercard. My CCs are entirely percentage based (3%, I believe), while the debit card is 1% + $2.50 per withdrawal. If you hunt around, there are better options for both, but I've picked banks that balance my home and travel needs, rather than picking the ultimate travel bank.

I used to keep fairly detailed records of exchange rate spreads+fees, and found that directly paying for things with my credit card worked out to roughtly the same expense as withdrawing the maximum amount ($500/withdrawal) at the ATM. Aside from North America and Western Europe, though, cash is king, and if somewhere does take credit cards, there's usually a punishing 8-12% surcharge.

Aside from Cuba, where there were no ATMs, I never use the credit cards to get cash, since that will incur an interest expense the moment the transaction hits. I do, however, keep a PIN set up in case I ever lose the debit card or it doesn't work for whatever reason. Keep your cards stored in seperate locations so any loss still leaves you with a backup.

I've brought travelers cheques in the past, and they've been a fair bit of hassle. I wouldn't recommend them unless you have some unusually compelling reason for taking them. I was able to use them to take advantage of unusually favourable exchange rates 6 months prior to my Ecuador trip, which saved me a few hundred dollars. That qualifies as a compelling reason, IMO.

Mostly, though, if there isn't an ATM, there isn't anywhere that can exchange a TC either. In addition to your spending money, keep a significant amount of US cash hidden in various locations, for those days that you simply can't find an ATM. I usually have about $500 hidden in about 4 different locations.

My Charles Schwab debit card doesn't charge anything for overseas ATM withdrawals and actually reimburses you if the local machine/bank does. I found that to be the best option when I was researching it last year. Haven't found anyone else that does that same thing. Might look into CapitalOne if they do though.

@ikr1212: Man that is a super helpful post! Any reason why you chose debit cards instead of credit or instead of a combo of the two (could be a dumb question - never used credit before so that is all new jazz to me)? Yeah it seems not many are too fond of travelers checks these days. Thanks man this was great!

@2wanderers: Tons of useful info that I can use. I'll have to do a bit of hunting to see what banks are offering now. When you stated that you "keep about $500 in diff locations", did you mean $2,000 all together or $500 scattered among the 4 places? Just curious.

@travel droppings: That sounds like it could possibly be a good option. Will definitely check out Charles Schwab - and be sure to poke at CapitalOne as well.

Thanks guys. This is really good stuff.

Yeah...I was in S.America most of the time and barely any place takes creditcards. Maybe if I was in Europe I would have looked at this more.

@ikr1212: Oh ok - good to know. Thanks again man.

EternalAdventures wrote:@2wanderers: Tons of useful info that I can use. I'll have to do a bit of hunting to see what banks are offering now. When you stated that you "keep about $500 in diff locations", did you mean $2,000 all together or $500 scattered among the 4 places? Just curious.

The second one. $2k would be a lot of cash to carry around...$500 gives you enough to get out of pretty much any tight squeeze you're likely to encounter, and because it's split up, you're unlikely to lose a disastrous amount of money.

How do you handle the security aspects of using a Debit card? Credit cards come with some protection against fraud but from what I understand, if money went missing from my debit account I'd have no chance of getting it back.

I'm going to go around the banks on Monday to try and get every thing sorted out. I was thinking of opening a separate account with a debit card for withdrawing money and also a travel focused Credit card for making most of my purchases. I'm lucky that my parents are willing to manage my money while I'm away, I was thinking that they could keep my debit account at around £2-400 each week (Maybe more outside Asia) and ensure that my credit card is payed off as required.

As for my savings, I've got to find a cash ISA (or similar) that doesn't charge for transfering money out.

Are there any exceptional cards/account out there at the moment?