International Banking
November 19, 2010
I have been beyond swamped at work trying to cope with massively multiplying problems that seem as though they’re only a week away from becoming a pandemic of the sort that takes out an entire system. I’d started the research for this post a month ago, and then fell off BlogWorld. But it’s time to get this wrapped up!
Before the year is out, I’ll have to take a trip to Europe for business and the first things on my mind are: Will I die of the freezing cold and how do I make sure I pay the absolute minimum in fees?
The first question was partially tended to in this and that post, but the second is my biggest priority.
My goals
I want to avoid foreign transaction fees, and I want to get the best exchange rates on any cash I have to withdraw during my travels.
Initial thoughts: Should I open a Capital One credit card so that I have a credit card with no foreign transaction fees, and should I also have a banking relationship with an international bank like HSBC so that I can withdraw cash without extra ATM fees ?
Answers: Probably not, Cap One has developed a poor reputation for ethical business practices as I discovered via SingleMa’s discussions on her blog and I’m not so hard up as to support a business that is known for unethical behavior.
Maybe. Maybe not, I’m not thrilled with the stories I found about HSBC online either. But this could turn out to be like every other time I research electronics. By the time I’m done researching, I’ve just discovered that everything ever created was crap and I should save my money.
Phase 1 – Examining my current cards
AMEX charges 2.7% foreign transaction fees on all of their cards so that’s two cards (Amex Gold, Hilton HHonors) I won’t be using.
Chase charges 3% foreign transaction fees on their cards. Three (Cash Plus, Sapphire, Free Cash) cards down.
Citi charges 3% fees on their cards as well. Getting grouchy, three more cards down.
Phase 2 – Calling the banks
SingleMa’s mention of seeing ING while in Paris and London got my brain ticking so I picked up the phone and called them. It turns out that with ING, I can use any ATM in Europe with a 2% international transaction fee. For the purposes of accounting and claiming expenses, the CSR confirmed that the fees should print on my receipt which is all I’m willing to share when I turn in expense forms. No way they’re getting statements!
Nearly ten years ago, my bestie and I used American Express traveler’s cheques when we went overseas together. I think we purchased the cheques via AAA here, and then cashed them as needed in Italy. It’s been years since I used AAA as an insurer or their membership benefits so I don’t know if they still offer that benefit. I’ve emailed them to see if this is the case. It’d be a handy and safe way to go with some cash in my pocket as they’ll replace any lost or stolen traveler’s cheques.
Citi has branches in the cities I’m traveling through but there’s a 3% foreign transaction fee that won’t show up until it’s posted to the account which is less than ideal.
***This is where I had to leave off the research, running off to purchase my ticket in a tizzy before prices skyrocketed and accountant heads exploded.***
Tentative conclusions: PiC is a AAA member so I may ask him to pick up a couple hundred in traveler’s cheques to cover the cash portion for me, and then off to evaluate more card options.
Then [cue: dun dun duhhhhh] Frugal Scholar posted this fantastic tidbit that dovetailed perfectly with … well, you’ll find out! 😉
It’s true HSBC only charged us $1.50 for ATMs (not HSBC ATMs). Our Australian bank charged heaps for ATM US, but the more you took out the smaller the % was. For purchases as a Visa card it was a 3% fee across the board with that card. I wouldn’t worry about this too much. Accept it’s going to cost you 3% and then be shocked by the high prices anyway for Americans 🙂 Don’t take small amounts out of ATMs (but as you see this doesn’t apply to HSBC and could be different with other banks too).
do retailers still take traveler’s cheques? is another question. i’m not sure they are as popular as they used to be.
I would think you can cash them in a bank but that’s about it.
If you go to your banks website you should be able to find their international partners. When I was there I used ING in the Netherlands and Denmark and Deutsche Bank in Germany. The latter because it is the international partner with Bank of America in Germany. So no bank fees for me. 🙂
I use a local bank in my area and they do not charge ATM fees anywhere. For the two weeks I spent respecively in Europe and then in Brazil I used my check card for purchases and withdrawing cash. No fees at all.
Maybe look into other banks in your area? I live in a smaller city, so I would imagine you could find a bank (not a national one like US Bank or Wells Fargo) that offers the same kind of thing.