Banking on the Road

When we started planning we had no idea how we were going to manage our money abroad.  We knew we didn’t want to pay ATM and foreign exchange fees every time we got cash or we’d knock our budget down by a full 5% right off the bat.  We did our research and never paid a single fee.

Since then the products available have changes but here are a few ideas for how to organize your finances to keep you save, secure and fee free on the road.

• Schwab High Yield Investor Checking – This is our ‘internet’ bank and we still use this today. Schwab reimburses ATM fees worldwide, charges none of their own, and even lets us get away without a foreign exchange fee when we use those ATMs. It is a free account, pays interest, and the only catch is that we have to do is open a free Schwab brokerage account to go with it.  Yes, it has worked as advertised.  Customer service is also quite wonderful with these guys.
• Chase Preferred Sapphire.  This card is a great one to have in the wallet. It is a visa so it is accepted most places and the points you accrue can transfer to a variety of airline and hotel programs instantly.  The reason it’s great for travel is two fold: it charges no foreign exchange fees and as a premium product you’ll have quick access to help if and when you need it.  There are free versions of this as well but on the road you’ll pay the hard way for that customer service and those foreign exchange fees.  Plus it is really hard to beat the Ultimate Rewards program by Chase.
• Capitol One MasterCard – This MasterCard, like the Chase Visa, claims to charge us no foreign exchange fees. We need to have both a MasterCard and a Visa card because in some countries it’s either one or the other. Plus, this card has a beautiful picture of the Grand Canyon we took when we went there in 2004 to remind us how beautiful our home country is. We also get 1% cash back on most purchases and 2% on purchases related to travel and lodging. It’s important to note that while Capitol One doesn’t charge a fee, MasterCard can have a built in foreign exchange fees.
• Hilton Honors American Express Card – American Express, don’t leave home without it. This card makes no promises to be accepted everywhere and does charge us a foreign exchange fee. (Will this be larger than the fee we get charged by Visa and MasterCard for the other two cards, we’ll find out?) We will use this card if and when we need to rent a vehicle (it includes insurance) and being card members entitles us to a variety of benefits such as mail service at AMEX offices worldwide.  There are other AMEX cards that may be better for you but it is always good to have at least one in your wallet at all times, and this one has no annual fee.

To make all of this work well we set all those credit cards to pay themselves, in full, monthly on the statement due date.  Each of those credit cards companies makes this an easy setup.  We also have money go into that Schwab account automatically every month (kinda like an allowance) to cover our ATM withdrawals and those credit card bills.  That way we can log into our Schwab account from WiFi networks around the world knowing that the bulk of our money is somewhere else.  This is a security procedure on our part, to make sure we don’t lose our money.

• AMEX Personal Savings – This is our main savings account. The interest rate typically beats most money markets. We transfer money from this account to pay our other bills as necessary.  Money goes automatically from this account to our Schwab account so we don’t have to access it very often.  (and it is a separate login from the normal credit card accounts.)
• Traditional Wells Fargo Bank Account – Nothing special here. This account pays a couple of regular bills automatically and is a backup source of cash if something happens to our other ATM cards.  We carry ATM cards for this account but also keep them separate from our Schwab ATM cards.  Usually we keep a credit card with these ATM cards as well.