I haven’t paid an ATM fee or a foreign transaction fee in years. Hand my hard-earned money over to a bank, when I could be treating myself to pisco sours and pedicures? No thanks!
As promised in my recent Peru Planning post, here is an update to the Managing Money Abroad post that I wrote back in 2011. Amazingly very little about my system has changed since — I put a lot of hours back then into researching the best cards and accounts, and it really paid off. While the account information that I provide here will be most useful to my US-based readers, there are tips in here that will be useful for those of any nationality.
Thank god for Charles Schwab. It is the only bank I know of that charges no international ATM fees, and even reverses the one the ATM itself charges you! This gives me the freedom to take out small amounts of local currency as needed, rather than be forced to withdraw massive sums to minimize charges. There are no fees, their customer service is outstanding, and I really can’t fathom why a US traveler would carry anything else. I do have an account at TD Bank, which also used to offer the same free international withdrawals. Since they have changed their policies I only keep this account as a backup should I lose access to my Schwab account for any reason on the road.
I hold out hope that I’ll be able to use my credit cards more often in South America than I could in Southeast Asia, so that I can build reward points. My primary credit card is my Capital One Venture card. I earn flexible travel reward points that really are easy to redeem thanks to the “Purchase Eraser” system, and there is no foreign transaction fee. I do pay a $69 annual fee, but considering in the first year I snagged a free flight to Hawaii worth $560 and the second year I eliminated $200 in flights from the Philippines from my bill, I think it’s well worth it.
While it has been good to me I am cancelling my SPG AMEX since the redemption values aren’t as good in South America as they are in Southeast Asia and the first annual fee is coming up. I’m replacing it with Citibank’s American Airlines card, for which I will earn a 30,000 mile signup bonus after I meet the mere $1,000 spend minimum. It does have a foreign transaction fee so it will be my backup card and I plan to meet the spend minimum with US-based, pre-trip purchases.
Not to go all Miss Responsibility on you, but I just want to emphasize that this reward chasing game is only beneficial if you are able to pay your credit card off in full every single month — I have all mine set to online statements and to auto pay so I don’t get confused when traveling.
I will enter Peru with a small amount of US currency tucked away as always, in case of emergencies. But in general I always avoid changing currency — the ATM gives better rates.
When I am lucky enough to travel with another person or two for a while I always suggest a “shared expenses” envelope. We all put the same amount of cash in the envelope and use it to pay for joint meals, cab rides, and other minor expenses. This eliminates the exhausting process of trying to keep mental tabs on who’s turn it is to pay, or the nit-picky one of splitting everything right down the middle. I’ve used this system several times and I can’t recommend it more.
What’s that I just heard? Someone calling out from the back and asking about traveler’s checks? I’m going to just move along and pretend that never happened. Traveler’s checks are dead.
On the road I use Mint to monitor my bank accounts and Trail Wallet to track my daily spending. Splitwise is another great app for when you’re traveling as a couple or group. Trail Wallet let’s me set a daily budget for myself, make my own categories, and make entries in both a home and local and currency. Taking note of every sol I spend will not only help me write posts about my daily budget like I did for Honduras and the Philippines, but also help keep realize when I’m splurging too much on smoothies or when I have wiggle room in my budget for the VIP bus seats.
How do you manage your money abroad?
Great resource, as usual! Traveling short(ish)-term I find it easier to give myself a daily budget. I’m old school and usually keep track of what I’m spending in my daily agenda. Living abroad on an inconsistent income has been a whole new challenge for me, but the best thing I did was get a local bank account – as a Canadian there are literally no cards available to us like your glorious American Schwab ones!!
Thanks Bonnie! I find it can be really difficult to find people willing to share what actual accounts they use. Hopefully this is helpful!
Glad to hear that Tammy! I was definitely intimidated by it for a long time and I too am pained to think of the miles I could have had — so much potential wasted! Now that I’m playing the game, I really am hooked.
Charles Schwab sounds awesome, but I’ve found no equivalent as an Australian.
We get around it using a 28 degrees Mastercard and loading it up with our own money. It has no international fees, and that way we can withdraw cash at any time without getting slugged exorbitant interest.
Sounds like an awesome suggestion for non-American travelers! Thanks for sharing that, Chris!
You’re welcome. If I learn of any other options, I’ll be happy to pass the info on! How long now until Peru?
Nice to hear of a solution I can recommend to my friends! I wonder if it is available in other countries as well.
I live in the UK, but still extremely useful tips. The keeping track apps are a great idea; will download those for use. Thanks!
Glad this was useful even to a non-US reader! Enjoy!
This is just a great overall skill to have. Nomadic, semi-nomadic or regularly employed. Every dollar you spend is one you’ll never get back.
Do you keep an emergency fund?
Hey Shaun! I don’t keep a specific, separate emergency fun but I definitely have a large cushion in my checking account. Also I am quite blessed in that I have several safety nets — I have parents and other family who would be happy to take me in rent free for a while if I was even struck by disaster.
Hi Sweetie–I am actually staying up to catch up with you. Been super busy, but not like you. This is an incredible post. What a great job. Maybe we aren’t related after all. You are very savvy, as always!
Always glad to hear you are reading! I am crazy busy right now… I need some Florida time!
Great info Alex. I’ve put a few of those articles together already and you got it straight to the point!
Thanks Sebastian! I wanted to share the exact accounts/cards I use, as I find so many people leave that pertinent info out. Hopefully it is helpful to those starting out.
Well Sofie, to be honest I don’t think they do it for our benefit, they do it for theirs 🙂 I don’t know if you saw my post on my disaster with Citibank, but these cards are sometimes a struggle to reap rewards from! However I am grateful the opportunities are out there.
I know they don’t do it for us, but what I wanted to say is that they seem unaware that there really is a market for this.
I’m collecting points when I fly, but I was more referring to earning points with travel cards (sorry if I wasn’t clear there). American cards give you a lot of bonus points if you can get to that minimum spending when the maximum amount on a Belgian card, I think, is 2,000 points.
Banks over here also don’t really over mile saving as part of a credit card ‘package’. The credit card I have for personal use is one from Brussels Airlines.
Ah, yes we can earn a lot using credit cards. I was very stung by that last experience but I am still going to try again!
Does anyone know of a Canadian credit card or bank that offers the same no international fees as the ones discussed here?
Hey Jessica, I hope someone can chime in with a better answer but as far as I know there isn’t one 🙁 Best of luck!
We are going to have to look into Charles Schwab immediately. Just moved to Japan and was (falsely) informed that I would be able to waive my foreign transaction fees, given that we will be here for at least three years. Thank you so much for all of this information. Just discovered your site and I’ve been glued to it for the past hour! About to go buy the underwater casing you recommend too!
So glad to hear that, Mindy! I don’t know what I’d do without my Schwab. It gives me so much flexibility… and steals zero of my money!
Just stumbled across your site when looking for things to pack for Hawaii and oh-la-la its so cool to read about another independent traveller also from NYC 🙂 (native New Yorker here too hehe) I loved TD bank living abroad in Asia and Europe because they waived the foreign exchange fees but not their ATM fees. So Charles Schwab is it as goods you say it is? Like really refund you the ATM fees from any ATM in the USA and abroad?
I also use TD Bank and years ago they also used to waive ATM fees for all accounts. I was bummed when they stopped but switched to a higher level account (which requires me to have a minimum amount in my checking in order for it to be fee-free) so they also still refund. You should ask at your local branch and see if you can switch!
Wow that was a fast reply thank you!
Do they give you a debit card with the chip in it though? Since the USA is the only 3rd world country when it comes to that.
This was awesome. I love Mint and Trail Wallet. Thanks Alex!
Hey Aria! I hope you signed up when there was a big sign up bonus 🙂 That’s the key! I sign up for cards when I have a big purchase coming up, which helps, and I just put absolutely EVERYTHING on my card and never pay cash unless absolutely necessary. Also, if I’m trying to meat a sign up bonus spend minimum, I might buy products I use (like my Lush Shampoo, for example) in bulk for the whole year ahead. Hope that helps!
I literally ended up using the same two cards… CS is amazing I lost my card a total of 4 times and every time they got it back to me efficiently. They are excellent. Awesome post.
Thanks Dani! Lots of research went into this system!
I love the idea of a money sharing envelope! Such a simple idea, but I’ve never thought of it. Will definitely suggest this next time I have a travel buddy.
It makes life SO easy. Any time I’ve ever suggested the idea, my travel companions fall wildly in love with it. So simple, so life changing!
Hopefully it will be helpful moving forward 🙂 Thanks for sharing this post!