A couple weeks ago, I announced I was heading off to Southeast Asia.
Step one accomplished: Booked tickets.
The next question to cross my mind was:
How to manage my money while traveling overseas?
There are many options available, therefore there is no “single” answer. However, most people seek out the best banking options with the least or no banking fees when withdrawing cash or charging purchases on credit cards.
I currently use Bank of America since they are the only U.S. bank to be part of the Global ATM Alliance. Essentially, the Global ATM Alliance is a group of banks worldwide, that let card users of those member banks to use ATM machines worldwide without paying for international ATM fees or surcharges. For complete list of participating banks, click on this PDF link.
When I stayed in Cabarete, Dominican Republic last summer, I simply went to a Scotiabank ABM to withdraw money using my Bank of America debit card and payed no ATM fees. While there was no foreign transaction fee listed on my receipt, foreign ATM machines may still charge foreign transaction fee. It’s best to check up on your respective bank on what they specifically charge and/or reimburse in transaction fees.
But what about countries that don’t have any of the participating banks listed within the Global ATM Alliance? Or what if I don’t use one of the Global ATM Alliance banks?
Good question. I asked that myself when I was researching options to get money in Nicaragua, Costa Rica, & Panama. For Nicaragua, I found that there was no participating Global ATM Alliance bank. For Costa Rica & Panama, I discovered Scotiabank had ABMs there. But here is the catch … the ABMs in Costa Rica & Panama don’t count! (As of Feb 23, 2012: Costa Rica, Panama, El Salvador, & Belize Scotiabank ABM branches “do not” have Free Access).
What’s the best option?
Charles Schwab. Specifically, with Charles Schwab High Yield Investor Checking.
I don’t know why I hadn’t found out about them, but I wish I had. Charles Schwab debit cards allow for unlimited reimbursements of ATM fees, worldwide! Pretty sweet deal!
Along with that, no account minimum and no monthly maintenance fee, that many other major banks love, love to charge you on. I didn’t believe this at first so the very friendly Charles Schwab representatives simply convinced me (awesome customer service as well!).
What’s the process like to open an account?
Simple & smooth. Charles Schwab did a great job getting my account set up and ready … in a very short amount of time. I opened my account 2 weeks before I had to leave, which left very little time to get the debit card.
Getting your account approved takes around 2-4 days depending on verification process through the bank & Patriot Act (the longer part). Then you have to fund your checking account in order for the debit card to be created and mailed out. From that point, the debit card can take 7-10 days to get to your mailbox. I opted for expedited mail ($15 charge … well worth it compared to $120 in ATM fees with other option), to be sure it got to me before I left.
Tips to keep in mind
- When you create your PIN number, don’t start it with zero. It may not work in most ATM machines worldwide. I’m not entirely sure why, but I was simply told not to being with zero.
- Make sure to link your checking account to some other transferable source of fund.
- Reduce the daily withdrawal & point of sale amount to something you feel more comfortable. This helps me stay within my budget, but also reduces the amount of loss should the card be stolen.
- Call your bank to inform them of your travel plans. Don’t want them to flag your card while you travel.
- Have backup options such as another debit card or credit card should one of them not work or be stolen.
- Keep photo copies of your cards, one at home, and another with you should you lose your card information. Also make note of the international phone number of your bank should you need to contact them.
This post mostly goes over debit card option, particularly for US readers. If you want more comprehensive information for other worldwide options, check out Nomadic Matt’s post on avoiding bank fees!
I’m not to familiar with traveler’s check, but I've heard from many travelers that it’s not convenient and that it’s not accepted in most countries around the world. As for credit cards, some will charge either a flat or percentage fee to use on purchases overseas. Chase Sapphire Preferred & many of Capital One’s credit cards are examples that have no foreign transaction fee.
Now that you've finished reading through this post, looking for reliable banking option while traveling? Go with Charles Schwab.
Harrison Tsai, Chief Information Officer at Lawrence Blake Group International. Learn more about Harrison.