How to avoid banking fees when you travel

Posted by Caleb | January 6, 2016

The three biggest daily battles we face in longterm travel are: indigestion, avoiding extra “convenience” fees and not having a drink with lunch. The order differs depending on the country, amount of street food consumed and the general attitude to which I approach the day.

Realizing that two of the three are inevitable, we attacked the fee challenge with vigor, specifically when referencing our banking fees.  Our goal was to minimize the amount of pointless negatives that pop up on the online transaction list, while also maximizing (and keeping accessible) the chunk of money that we saved for during and after the trip.  Here are three things we did to help our money go farther.

  1. Avoid international ATM Fees

I want to create a chain of ATMs that partner with the stores near its location to provide coupons along with your cash, allowing you to feel somewhat less depressed when you pull out that $200 bucks to spend on those overpriced ballpark nachos, just to get charged an extra $5.50 for a convenience fee.  Imagine if you got a free extra nacho topping or coffee in exchange for that fee, it makes too much sense.

Till that happens, we can all continue to be hacked off by the fee, or we can move some money into a Charles Schwab High Yield Investor Checking Account.  This account allows for UNLIMITED international ATM fee reimbursement.  Meaning, you can take out money anywhere in the world and eat the fees, only to get reimbursed every penny of those fees at the end of each month.   For us this has been clutch as we can limit the amount of pocket cash and not have to pay the hundreds of dollars worth of fees over the span of this trip.  Two months in and we have already been reimbursed $98 USD and avoided a ton of trouble.

This account has been great overall.  The online access and ease is simple and straight forward, the “High Yield” checking piece is a little inflated as the .1% APY is slim compared to the Ally option posted below; however, we plan to keep the account indefinitely as domestic ATM fees are covered as well.

Here is Beth feeling the freedom of not getting charged an ATM on Lake Titicaca

Here is Beth on Lake Titicaca being excited about not getting charged an ATM fee

2. Avoid foreign credit card transaction fees

This is the one you see all the commercials for, the smiling, unbuttoned white shirt folks excited to use their shiny blue card on a beachside cocktail.  I always think of these people as I buy a 10:30 p.m. hot dog from a run down 7/11 on a random street corner.  Nonetheless, you can not travel without one of these cards.  A lot of American credit cards have moved to a “no international transaction fee”, specifically those from the larger nationwide banks.  Be sure and check yours before you head out as local banks tend not to have this option.  The two we use most often are the Barclaycard Arrival and the Capital One Venture as there is no international fee and we are earning 2x miles on every single purchase. Just be cautious that even if the credit issuer isn’t charging you fees, the local establishment where you’re using it may still tack on a 2-5% convenience fee. We rarely ended up using our credit card in South America because they weren’t widely accepted and all seemed to charge extra fees.

3.  Find a high yield savings account

I took one in-depth investing course during my grad degree.  It was taught by a spunky German woman, and even though her and I share the same lineage, we did not share the same zest for the trading markets.  For now, we are solely searching for reliable and accessible places to keep our money.  As mentioned, the Schwab option is a great place to start in order to keep some of your money accessible across the world.  If you have a little extra laying around, try stashing it in an Ally Bank Online Savings Account.  This account provides a 1.00% APY compounded daily and no basic maintenance fees.  There is a six transaction limit per statement cycle, thus it is not an account you want to be actively using but for a savings account this is a great option.

4.  Spread out and call ahead

We’ve also found that using multiple banks has been a major plus.  Though it can be difficult to manage passwords (use this spreadsheet to help you keep track), it does provide outlets if something goes wrong.

Case in point – talking to you Chase Bank……

A few days into our trip Chase Bank caught wind that we had landed in Chile via an attempted log on and money transfer I tried to complete from Santiago.  Despite calling them prior to departure and having a rep add a note to my account, they shut down all access to my account.  This is not uncommon and usually requires a relatively quick phone call to reopen.  However, they deemed this transaction a high enough breach that the only option was to walk into a Chase Bank and prove my identity.  With no international branches and seven weeks left before returning, we were out of luck.  Even worse, the closest branch to our Kansas hometown was a 3.5 hour drive away, one-way.  Thus I spent one morning of our seven day trip home driving through the Flint Hills to prove to Chase that even though my unkept beard makes me look shady, I am actually the owner of a real bank account.

With all our other cards and bank accounts we have had little trouble.  We did call customer service lines ahead of time and noted to each that we would be traveling and logging in from some weird places. We also made sure to set all of our credit card accounts (and any on-going bills such as student loans, car payments, etc.) to both paperless statements and automatic payments, so we didn’t have to worry about logging in to pay bills every month.

Here she is crossing into "the jungle of remembering passwords"

Here she is crossing into “the jungle of remembering passwords”

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