Managing Money Abroad: Updated Edition

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.

Debit Cards

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.

Credit Cards

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.

Cash

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.

Keeping Track

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?