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Banking Abroad

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1. Posted by mildayil (Budding Member 3 posts) 33w

Hello all !

I am new to this forum and figure it is a great place to pose my many questions. I am a seasoned backpacker who is about to start a 1 year trip around the world. Before doing so, I am tying up all loose ends and trying to figure out some logistics. My question today is about banking.

We have always had trouble with debit cards ... not working in most machines, limited funds that can be withdrawn at a time .. fees adding up. So we switched to Credit Card cash advances last trip. This fixed the issue of bank machines rejecting the request .. still had the fees and still had the limitations on withdrawal amounts.

We have an idea and are wondering if anyone has done this or knows if it can be reasonably done. We would like to enter a bank in whatever country and make a cash advance of the full amount we will need for that country in one stop.... rather than hitting the cash machine 15 times in a month, paying $75 ( 15 x $5 ) in fees. Will banks in foreign countries process cash advances of large sums ( $1000-$2000 ) provided my credit is good and my card has credit left on it ?

Thanks in advance for anyone who read this far ... and thanks for having me on this forum :)

Mildayil

2. Posted by OldPro (Respected Member 277 posts) 32w

There is always more than one way to view something.

Your solution is one withdrawal to avoid multiple fees. On the surface that would seem to make some sense but it also means you will have a large sum of cash to worry about having stolen or lost. Cash advances on a credit card also cost you immediate interest charges.

There is another way to look at the issue. That is, to find a card on which you do not pay the fees for withdrawals. There are debit cards that exist on which you pay not ATM useage fees at all and which also charge no Exchange loading. Obviously, you also avoid cash advance interest charges.

These cards are obviously country specific and since you don't say what country you are from, you need to do so to get specific answers.

For someone from the UK for example, the Norwich & Peterborough debit card charges no fees at all on international withdrawals/transactions.

I also don't buy your reasoning of your debit card not working in machines. You can walk into a bank and withdraw using a debit card just as you would with a credit card so there is no difference there whatsoever. You can also talk to your bank and have the daily withdrawal limit increased. In other words, your reasoning is flawed.

As I see it from what you have written, the issue is you don't know enough about how debit and credit cards work internationally and so don't know enough to know which are the RIGHT cards for what you want to do. ie. travel internationally.

3. Posted by mildayil (Budding Member 3 posts) 32w

Thank you for your response :)

Sorry I failed to mention I am a Canadian. In Canada we have the big 5 banks to choose from .. CIBC, Scotia, Royal Bank, TD and Bank of Montreal .. any others are small time and definitely won't provide the services we require. We have been through this roller coaster with the debit cards many times already.

When us Canadians approach an ABM machine in Central America or South East Asia ( this is where our "experience" is currently limited to ) we have about a 25% chance that it will accept our debit cards. You don't need to "buy" this .. it's just how it is. We have made many European travel friends along the way and we are always impressed with how readily and easily they bank.

Before every trip during the last 10 years, we have always had a sit-down with our banking adviser to let them know where we are going and to let us know of any challenges we might have while we are gone. The song and dance is always the same - " Your cards will work and there will be no problem .. just use ABM machines with the "PLUS" symbol on it" ... Trusting the banks has never worked in our favor and we have actually ended up in some tight situations because of this misinformation. An ABM machine with the "PLUS" symbol does not mean our debit card will work .. at all. We have moved on from this issue as I noted in my original post and now use the credit card to access money because it almost never fails.

As for banks/cards that don't charge the international fee, you can google from your home country and find 3 credit cards that claim to not charge this fee.. I have contacted all of them and the claims are all misleading ... one way or another, they charge you the $5 and sometimes more whether it be by charging a "conversion" fee on top of the bank's forex spread or by pinning a 1% service charge on top of transactions with a $5 minimum ... Debit cards are much the same thing ... Canada is simply not there yet ... still milking it's traveling citizens who are at a currency disadvantage to begin with. I've made many phone calls, read many documents and have had many sit downs .. There exists no way to avoid the fees .. and there exists no way to make our debit cards work on more foreign ABM machines. .. PLUS sign or not ... Global Alliance network machines or not.. Been there done that.

As for my flawed reasoning on limits ... we have a very large limit on daily withdrawals ... always have. It is the bank machines themselves that place limits on our withdrawals and there is no way to change that. And when 70% are rejecting your request altogether, beggars can't be choosers.

I am surprised by this response .. was expecting a friendly community and my first experience is being told I don't understand how my banks operate and that my reasoning is flawed. hmmmm...

As for carrying relatively large sums of cash, I'll worry about that, you don't need to concern yourself.

So after sifting through all that, you mentioned that I could walk into a foreign bank and use my debit card at the teller and withdraw what I need. I will pursue this angle. Thanks for that.

Anybody else have constructive advice, I welcome it ..please :)

4. Posted by Borisborough (Respected Member 458 posts) 32w

Welcome to Travellerspoint, mildayil

"I am surprised by this response .. was expecting a friendly community and my first experience is being told I don't understand how my banks operate and that my reasoning is flawed. hmmmm..."

Unfortunately this happens sometimes - in general, this is a friendly community but any friendly or funny comment can lose its intention when the words are just typed rather than spoken. It is possible to click on the username of anybody who replies and look at their recent postings - from those you can usually tell if they are perceived by others as friendly or not.

For what it's worth, I travel abroad with both my cashcard and my credit card. I can use my cashcard at any ATM which displays the Cirrus or Maestro logo but my bank (and it seems most banks in NZ) charges a foreign ATM withdrawal fee of NZD6 if I use my cashcard (and many foreign ATMs charge an amount to withdraw too) and my credit card will charge a small cash advancement fee (and again, the foreign ATM will charge me for using their machine too).

It is sometimes possible to avoid the foreign ATM charge but that means trying lots of different ATMs in the country you're in until you find one that doesn't charge - and if there aren't many ATMs in the town you're in, you just have to pay up. It still appears to be cheaper than taking US (or Canadian) dollars with you (and having lots of cash about your person) and changing them at a bank or money-changer - the exchange rates are a complete rip-off. I tend to withdraw about NZD250 at a time using my credit card and then secrete it about my clothing so it's not all in one place.

The problem with trying to open a bank account in some countries (particularly the UK and NZ) is that you need a permanent address and possible a tax code (so that the Inland Revenue Department can take it's share of the interest you earn on your money) in order to open an account - you might have to overcome that hurdle if you want to make a one-off deposit before you explore the country.

Other people here will have their own way of dealing with their foreign money - unfortunately some people will tell you that their way is the only way!

Enjoy your travels. :)

5. Posted by hasbeen (Respected Member 627 posts) 32w

Quoting mildayil

... Will banks in foreign countries process cash advances of large sums ( $1000-$2000 ) provided my credit is good and my card has credit left on it ?

...

I travelled in Myanmar recently & getting money out of ATMs using Canadian debit or credit card was very hit or miss. Often I could not get anything at all. One machine would only let me have the equivalent of 10 dollars & a large downtown Yangon bank had no problem with the 300 dollars. So the larger the bank the better. Luckily I was aware of those possibilities beforehand & had alternatives.

To answer your specific question - My advice is to write & ask that question of banks in the actual countries you are thinking of visiting.

An alternative approach might be to send yourself an amount of money to the country you are going to visit using Western Union. I don't know if the rules allow that but I have been thinking of trying it myself next time I visit Myanmar.

Happy travels.

Steve

6. Posted by berner256 (Travel Guru 528 posts) 32w

Yes, many people participating on these Forums are pleasant and helpful.

It's usually unavoidable to have to pay something to get cash or change money overseas. It's part of the cost of travel. My Charles Schwab Bank debit cards absorb all ATM fees, as well as the 1 percent VISA foreign transaction fee. My Capital One QuickSilver, Bank of America Travel Rewards and Pentagon Federal Credit Union Platinum Rewards credit cards -- all VISA -- also absorb the 1 percent VISA foreign transaction fee. So I get full use of my money, somewhat. But I have no idea what exchange rate they will be using, until the transactions settle. With Capital One, that's usually within five business days. With Charles Schwab Bank, it's almost instantaneous (I check with my laptop).

VISA has substantially more cash machines around the world that MasterCard, so I carry VISA cards. My Canadian friends, who live in Calgary, traveled with me in West Africa two years ago, and they were hard-pressed to find an ATM that would accept their MasterCard debit or credit card.

I find that it pays to ask locals what the maximum amount cash machines dispense per transaction. It can vary from country to country, or place to place. Withdrawal fees also can vary. Frequently, machines do not work. They either have lost a telecommunications link, have exhausted their cash supply, or some other reason. So, you'll have to use other machines. I like using those attached to a bank office.

Until recently, Argentina had two exchange rates; the official rate; and the "blue dollar" rate, which was substantially higher. With a new government, that has changed. Yet ATMs only dispense a maximum 2000 pesos, or about $143, with a fee of about 88 pesos, or about US$6.30, per transaction. That is costly. What to do? I went into shops to change cash dollars into pesos, making the transactions more efficient. The largest note in Argentina is 100 pesos, or about US$7.13. I knew beforehand what the market rates were, checking with xe.com. The rate I got in the two shops that I used were better than the rate that I got from an ATM earlier.

I try to estimate my cash needs. On a recent trip to Patagonia, I knew that cash machines in El Chalten, Argentina, probably would be in short supply, or not working at all. So I got enough pesos in Buenos Aires to meet my needs there. Many establishments in El Chalten, which is in a national park, do not accept credit cards. Telecommunications links there, including phone and Internet, aren't particularly good, if they work at all.

Since I travel for extended periods, I need access to cash. Although I usually carry two debit cards (ATMs sometimes can "eat" cards) and three credit cards, I also carry cash. It can amount to thousands of dollars; but always less than the $10,000 maximum that many countries require for customs reporting. Sometimes I wire money, especially if I have to pay large amounts; and where credit cards are not readily accepted. For example, I will be traveling this summer in remote regions of India, including the Spiti, Nubra and Zanskar valleys. So I'm wiring funds to prepay expenses, such as cars and drivers; and accommodations. I'll carry cash for meals, etc. Hope this helps.

7. Posted by mildayil (Budding Member 3 posts) 32w

Some very helpful advice here .. many thanks everyone !

Cheers :)