|
I’m trying to live on a ridiculously low budget. Ridiculously low compared to my former lives… I know I’ll always be rich compared to 99% of the world. So I’m watching every penny & I’ve discovered a foreign travel banking racket.
It used to be easy in the old days, (I can’t believe I actually just used THAT sentence!) to travel you’d get your ticket, visas & then traveler’s checks. But there’s often fees to buy & cash ‘em. Hard cold cash is ideal… well, not so much the US dollar these days, but apart from the Euro it’s still the cheapest & easiest way to spend money. But there’s the risk if you lose it, it’s gone for good. So that leaves ATMs & credit cards… well, I’m learning there’s a maddening science behind that! It doesn't matter what the fees are if you can't use your card... call your credit & ATM cards before you leave & tell them you’ll be using it overseas. I TWICE forgot & had my cards denied because they were flagged for fraud.
Credit Cards
In the low budget world, credit cards really aren’t that useful but if for no other reason than booking online, they’re needed. The added insurance some cards offer is great plus too. I’ve never seen it in the US, but I’m finding more & more merchants overseas will charge you a percentage if you want to use a credit card. My niceish hotel in Bangkok wanted to add 3% to the total bill if I paid with a card. One hotel in India charged 5%!
Now if the hotel/shop doesn’t charge, your actual credit card most likely will. Visa & MasterCard both charge a 1% foreign transaction fee. Then the bank issuing the card will add their own 1-2% fee. So you’re looking at a 3% total fee. American Express is 2% but that can vary based on where it’s issued & by which bank. The one shining light seems to be Capital One cards which will eat the 1% Visa/MC fee & they don’t charge you a fee of their own. They definitely get the gold star!
Lastly, there’s the exchange rate itself. I’ve never heard of any way to get a better one… but generally Visa & MasterCard offers a slightly better rate than American Express but they’ve been getting closer over the years.
Recap: Look for fees from the store, a foreign transaction fee & a bank fee.
One last word on credit cards, I’ve heard it’s illegal to go over your credit limit in some countries.
Cash Advances
Look at the fees above & then add the typical 3% cash advance fee. Plus you might have to start paying interest right away; some cards have no grace period on cash advances.
ATM Cards
This is the most common way to get money but this is also the most confusing!!
First, will your card work? On the back of every card it has pretty logos for the various “networks” its connected to. Next make sure there will be ATM machines available. Right now there are only 2 ATMs in Laos that are connected to one of the international networks.
Visa/Plus Locations MasterCard/Cirrus Locations
Fees… you probably know some machines have their own fees. Then your card may charge a flat rate for every transaction, a percentage or even a flat amount plus a percentage. I’m currently charged a $1 per transaction so if I withdraw the largest amount possible, the fee isn’t too bad. Citibank & Chase both charge 3%.
If your banks does have a branch at your destination or a partner bank, you’ll definitely save fees by using it. But they might now even be free. Citibank often charges their customers 1% to use one of their overseas offices.
As for the exchange rate, it’s economies of scale. The larger the banking franchise, the better the rate you’ll get.
It’s all incredibly ridiculous. I’m more than a little anal & set up a spreadsheet of the various bank fees. In the end I went with Capital One & American Express credit cards, Visa & MasterCard dual debit/credit cards & a MasterCard/Cirrus ATM card.
Tags: General Travel Money ATM Credit Cards |
Money 
