Best Banking Options for Long-Term Travelers from the US
We'll be camping and hosteling and mostly dealing with cash. We expect to withdraw maybe a couple hundred dollars every so often. We would prefer to use a debit card rather than a credit card. In addition to the funds we have managed to save so far, we anticipate at least a very small income from advertising on our blog so we will need some sort of merchant account option (I think?). Savings or checking or a combination of the two are ideal.
Any insight veteran travelers can provide in this fascinating economic cycle will be greatly appreciated.
I have an online savings account through one of the big online guys, like HSBC, ING, etc... And then I have a checking account with a local credit union. Every month I have scheduled transfers from my main savings account to my checking account in my credit union. Then I use an ATM card. With my credit union there are no atm fees, no international currency conversion fee's, it's great! I also have a credit card that I hardly ever use, mainly for plane tickets. And I can pay it online with just a few clicks from my savings account. And as a back up I have another checking account with a local bank and an ATM card, I only have $600 in there and keep it as a back up.
Works well for me!
As for the money from your blog - open a PayPal account and then link that to your bank account. You can transfer the money from PayPal to your bank in a few clicks of hte mouse. It works great!
After doing heaps of research, I've decided to agree about Schwab with the other posters here and on other travel sites. My money will be managed in the following way:
1. A High Yield Investor Checking Account with Charles Schwab
This IS a checking account, even though Schwab is primarily a brokerage firm. In order to open the checking account, you do have to open a basic brokerage account; however, there is NO fee, minimum deposit, or minimum balance for either account. You are not required to make any trades or buy any stock with your brokerage account; in fact, once you open it along side your checking account, you never have to touch it ever again if you don't want to (again, no minimum balance).
The checking account gives you an ATM/Debit Card. Schwab does not charge any ATM fees and reimburses you for ALL fees charged to you at the ATM by another banks with a lump-sum credit at the end of every statement period. Additionally, there are NO international transaction fees. The only "fee" you will pay is related to the exchange rate and the use of Visa, which is very standard and minimal. It's been discussed ad nauseum in on lonely planet's debit card thread and IMO it's generally agreed that if this is all you pay, you're in the best situation you can be in as a US traveler.
I plan to make a automatic bi-weekly transfer from my Chase savings account where the bulk of my funds are to my Schwab checking account for spending purposes. It will be as if I get a paycheck every two weeks and it will help me budget. I have a reserve fund and a credit card for emergencies and splurges when they don't fit into my bi-weekly budget.
Something to note on transfers: A lot of banks charge fees for transferring money to other banks/institutions. I know Chase charges $30 for wire transfers and $3 for electronic transfers to other banks. But the $3 fee only applies if you initiate the transfer from Chase's site. The trick to keeping my Chase Savings and using the Schwab Checking is this: if you add your savings/primary account (be it Chase or anyone else) as an "external account" to your Schwab online banking, and set up the regular automatic transfer from Schwab.com you are not charged a fee at all from either bank. However, if I set up my automatic transfer on Chase's site, and add Schwab as the external account on Chase.com, you are charged $3 per transfer by Chase. So in sum, if I do my transfers on Chase.com I get charged, if I do them on Schwab.com I don't, even though it's basically the same thing. I can't tell you why this is the case, but I checked with both banks and it is. Regardless, I've found a way to keep my current savings account and use my Schwab checking while traveling with the absolute minimum fees.
2. Schwab Visa Credit Card
No international transaction fees and 2% back on ALL purchases. They literally send you 2% of what you spent on your credit card back to you. Sounds like a good deal to me. I asked the broker about 50 times what the catch was, and there is none.
I don't plan to fly a lot, so miles are not important to me. However, if you want to collect points and miles, Capital One has a variety of cards with different rewards packages. According to their website, NONE of the Capital One credit cards charge international transaction fees. So you can choose any card that's right for you without having to worry about that aspect.
If anyone has experienced anything that would lead you to think anything I've said is untrue, please let me know! I leave March 25th and am excited.
Define "abroad." It's a big planet.K2 wrote:What's the most common method of payment while travelling abroad? Cash?
In western Europe + the US, I use my credit card fairly heavily, similar to how I use it at home. In most other places I've been, cash is king. Local currency for purchases, and a backup supply of US dollars if you get caught somewhere there's no bank machine. There's always the occasional use for a credit card. Airline tickets for certain, often tour companies take cards. Rental cars. A night or a meal in a fancy hotel, often a great treat when you're road weary, can be paid for by card. If you end up in a tourist-heavy location, stores that cater to tourists will likely take cards as well. Sometimes they charge a hefty service charge, though, ask first.
3% is fairly typical, though obviously lower is better. Changing cash is more expensive, and travellers cheques even worse. ATM withdrawals also have fees attached, so you really can't win. Exchange fees are basically just one of the costs of traveling, and the extra $1-$3/day that it might cost you shouldn't significantly alter your trip. If you can get a card with no fee, great, but if not...don't sweat the small stuff.K2 wrote:I got a Citicard but 3% foreign transaction fee will kill me if I keep using it.
Oh yeah & get a Capitol One card as back up for the times the Canadian cc "that works everywhere" or so the bank says doesn't! Never had a problem using the Cap One
Also they don't charge int'l atm fees, which saved me heaps.
Out of curiousity...have you ever had problems with other cards? Because I've used BMO and CIBC cards extensively all over the world, and never had a problem. Including at least one place (Cuba) where a Capital One would not work.busman7 wrote:Oh yeah & get a Capitol One card as back up for the times the Canadian cc "that works everywhere" or so the bank says doesn't! Never had a problem using the Cap One
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