If you're preparing to travel overseas for an extended period of time, it is easy to be overwhelmed by the options you have to hold onto your finances. Depending on what company you go with you could find a great deal of your savings eaten up and shat out by these extra fees on overseas purchases and ATM charges.
After some research I realized that it is common for banks to charge you 3% transaction fees for making purchases overseas. That is a big chunk of change.
Lets put that into perspective. If you're in Europe for two months and want to put all of your hostels onto your credit card, let's say that adds up to $900. Typical banks would charge you $27 for international fees. Total expense=$927.
That isn't much but certainly enough for a few extra pints in Bruges, and who couldn't use that?
Now consider this: Charles Schwab offers perhaps the smartest banking options for people from the US going overseas.
They don't charge you for international purchases plus you get 2% back on all purchases.
Back to that math. If you spend $900 on coffee shops in Amsterdam, put it all on your credit card. You won't get charged for the international purchase and don't forget the 2% back. That's $18 just for smoking yourself silly. Now go buy a brownie to celebrate, you hungry fool!
Next consider the Charles Schwab Credit Card also reimburses you for international ATM charges in one lump sum at the end of each month. That means it doesn't cost you anything to withdraw from ATM's. With average ATM charges being about $4 each, if you use the ATM sparingly on your trips you could save another $30-$50 in two months.
I can hear you right now, asking yourself, "even at those naughty gentleman's clubs charging up to $10 for an ATM withdrawal?" Yes sir, you would be reimbursed.
Next consider where your money is sitting. If you have it in a regular savings account at another bank you might be getting little interest if any at all. I know many brick and mortar banks don't offer interest on checking accounts.
Schwab currently offers .5% interest on all checking and savings accounts. Might as well let your money sit there while you save up for your trip. That's easily a few more Euro's to spend on the church offering basket while you try to ask for forgiveness for the unnatural thoughts you had in the Red Light District.
The only downside I see so far are that the ATM card is an ATM/Debit Card, which is not ideal if you are concerned about thievery and credit card fraud. As you may know if a thief makes fraudulent purchases with a debit card it will be harder for you to get your cash back.
I specifically asked about ATM only cards and those apparently are not offered. So be safe with your wallet or purse.
These findings came after heaps of research. If you have different knowledge of this system or a better one for banking please let me know so we can update the masses.
I hate to sound like a commercial for Charles Schwab, but I did drink their Kool-Aid and am sold on their banking services. Go to a Charles Schwab web site and take a look for yourself.
Consider this financial advice and the only thing you'll be concerned with is fitting those huge english pounds into your wallet. And no, that isn't a metaphor.
Update: It looks lke Mr Schwab thought this deal was too good to be true, so it's bad news for people looking for this card as it has been discontinued. If you know of a better deal for international travelers please let us know and email us.
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