Money Management for Travelers

From AndHigherStill Wiki
Jump to: navigation, search

Travelling is expensive enough - keep your bank fees to a minimum!

Exchanging Currencies With Low Fees[edit]

TransferWise has been around since 2011, they're big, and they're getting bigger!

For a little more background on how it works:

What Are These Bizarre Anti-Banking Ads Doing in New York's Subways?
2015-03-20
http://gizmodo.com/what-are-these-bizarre-anti-banking-ads-doing-in-new-yo-1692643337

"I'm not claiming that TransferWise is a shady operation. The company has several years on the start-up radar, backing from the likes of Peter Thiel's Valar Ventures and PayPal cofounder Max Levchin, winningly photogenic co-founders, and an office in London."

"They've been written up by outlets like the Economist, Wired.co.uk, and Gigaom (RIP). But when money is involved and the rules of banking are being broken, things start to look a little fuzzy."
----
Skyping dough
2013-01-29
http://www.economist.com/blogs/schumpeter/2013/01/international-money-transfers

"If someone in Britain, say, wants to transfer money to his relative in Spain, he will put the cash in Transferwise's British account. The algorithm then spots someone in Spain who wants to make a transfer in the other direction, and who deposits funds in the firm's Spanish account. Rather than crossing borders to reach its destination, money can simply be paid out of the relevant national account."

"In 2011, its first year of operation, Transferwise transferred £10m ($16m); it breached the £50m mark in December. It charges a miserly fee of £1 for making transfers up to £300, and a variable charge for transferring larger amounts. Its 10,000-odd customers are spread across Britain, Switzerland, Poland, Sweden and Denmark. They are mostly young working professionals who either have a mortgage to pay or a family to support back home. Retirees with a second home abroad and startups with foreign subsidiaries also use the site."

"Critics point to the risk of money-laundering. TransferWise retorts that it is subject to the same "know your customer" rules as any commercial bank. A bigger problem is scaling up in countries that have fewer immigrants than émigrés. The demand for converting Indian rupees, say, into pounds may be less than the demand the other way. That means you still need a bank to stand in the middle of a transaction. Not "bye-bye", then, but a possible black eye."
----
How to eat a banker’s lunch
2015-03-17
http://ftalphaville.ft.com/2015/03/17/2121994/how-to-eat-a-bankers-lunch/

"In short, there’s nothing in the TransferWise proposition that seems to be intrinsically different to what FX brokers/money changers are already doing. All the innovation is be based around a marketing strategy to “big up” the internalisation component of FX by rebranding it niftily as peer-2-peer, whilst depending on all the usual retail FX mechanisms in the background.

How does TransferWise come up with such good rates then? Well, that truly is a mystery. Perhaps TransferWise has a magic crystal ball that allows it to peer into the future of FX flows and take the risk accordingly. We just don’t know.

What we will say is that the one time FT Alphaville tried to use the service the rate didn’t compare all that well with our own bank’s rate (it was a CHFGBP transfer, and the bank was UBS). It’s hard to know how many customers actually do the price comparison maths rather than just take the company at its word?

With respect to the truly competitive rates they do offer at a “mid market rate”, we guess only time will tell if they’re really as sustainable as the company likes to make out."

International Credit Cards[edit]

Working with cash in a foreign country is never fun. With the Mango Prepaid card, which is a pretty standard reloadable prepaid Mastercard, you'll pay a 2% international currency conversion fee, plus a $2 Mastercard ATM fee, plus the ATM operator's fee. I engineered around the cash problem by putting the group bill on credit whenever possible; my travelling companions paid me back in cash.

The following banks appear to offer the lowest international fees for debit card purchases and cash withdrawals:

  • Charles Schwab Bank (0%) - "no minimums, no fees"; refunds ATM fees
  • Capital One 360 (0%) - "no minimums, no fees"
  • Ally Bank (1%)
  • EverBank (1%)
  • USAA (1%)
  • Pennsylvania State Employees Credit Union (PSECU) (1%)
  • Penn State Federal Credit Union (PSFCU) (1%)

It should be free to push money from your account into his debit card's credit account. If your bank doesn't offer this in-house, try Square Cash, Google Wallet, Venmo, or Paypal. Square cash is nice because you can dump money in from a debit card and it is auto-cashed into his credit account, unlike Google Wallet and Paypal which require a manual cash-out.

My advice is to use a credit card with no foreign transaction fee. Debit cards are more cash-like and provide less protection against fraud. When I went to Europe in 2006, I was very glad I chose to use a credit card when my card information was stolen (no idea how—I still had the card!) and I wasn't liable for the thousands of dollars in fraudulent charges—all it took was a trip to a notary to fix the problem.

Student credit cards with no foreign transaction fee and no annual fee:

Capital One Journey Student Rewards Visa
http://www.capitalone.com/credit-cards/journey-student/
no annual fee

BankAmericard Travel Rewards Student Visa
https://www.bankofamerica.com/credit-cards/products/student-rewards-credit-card.go
no annual fee

Discover Student
https://www.discover.com/credit-cards/student/index.html
Discover, so not as commonly accepted
no annual fee

Working with cash in a foreign country is always a losing proposition. With the Mango Prepaid card, which is a pretty standard reloadable prepaid Mastercard, you'll pay a $3 monthly fee, a 2% international currency conversion fee, a $2 Mastercard ATM fee, plus the ATM operator's fee. To solve the cash problem, I put the group bill on credit whenever possible and the others I was travelling with paid me back in cash.

Other Resources[edit]

How to Avoid Paying Bank Fees While Traveling

Debit Card Foreign Transaction and International ATM Fees

NerdWallet - Best No Foreign Transaction Fee Credit Cards, 2015

CreditCards.com - No Foreign Transaction Fee Credit Cards

CardHub - No Foreign Transaction Fee Credit Cards

Bankrate - Foreign transaction fee credit card chart

The Points Guy - Top Credit Cards with No Foreign Transaction Fees

No Transaction Fee Cards[edit]

Student No-Fee Cards[edit]

Capital One Journey Student Rewards Visa
http://www.capitalone.com/credit-cards/journey-student/
no annual fee

BankAmericard Travel Rewards Student Visa
https://www.bankofamerica.com/credit-cards/products/student-rewards-credit-card.go
no annual fee

Discover Student
https://www.discover.com/credit-cards/student/index.html
no annual fee

No-Fee Cards[edit]

BankAmericard Travel Rewards
https://www.bankofamerica.com/credit-cards/products/bankamericard-travel-rewards-credit-card.go
no annual fee

Capital One VentureOne Visa Signature
http://www.capitalone.com/credit-cards/ventureone/
no annual fee

Capital One Quicksilver Visa Signature
http://www.capitalone.com/credit-cards/quicksilver/
no annual fee

Capital One Platinum Prestige Platinum Mastercard
http://www.capitalone.com/credit-cards/platinum-prestige/
no annual fee

Annual Fee Cards[edit]

Chase Sapphire Preferred
https://creditcards.chase.com/sapphire/credit-card-benefits
$0 intro for the first year, then $95

Capital One Venture Visa Signature
http://www.capitalone.com/credit-cards/venture/
$0 intro for the first year; $59 after that

Capital One QuicksilverOne Platinum Mastercard
http://www.capitalone.com/credit-cards/quicksilverone/
$39 annual fee

Capital One Classic Platinum Mastercard
http://www.capitalone.com/credit-cards/classic-platinum/
$39 annual fee

Capital One Platinum Mastercard
http://www.capitalone.com/credit-cards/platinum/
$0 intro for the first year; $19 after that

Barclaycard Arrival Plus World Elite MasterCard
http://www.findmybarclaycard.com/barclaycard-credit-cards/arrival-plus/
$89 annual fee