Guest Post by Brian Brookshire
One of the things we often don’t think about when moving abroad is how we’re going to access our money once we actually get there. I learned the hard way that it can be a huge disaster if you don’t plan beforehand.
In my mid-20s I moved to Korea. I’d been abroad many times before as a foreign exchange student in high school and college while staying with host families and in student housing, but this was the first time I was going to rent a proper adult apartment abroad.
I had it all planned out. I researched apartments in the area I wanted to live in beforehand, and I was going to stay at a cheap hostel for a few days while I inspected them in person.
A couple days into my search, I found it! The perfect apartment, and they even consented to let me — a foreigner — rent it.
Of course I needed to put down a deposit and first month’s rent, so I went down to the local bank with my Wells Fargo checkbook in hand thinking I’d just be able to set up an account and transfer my money into it. I mean, after all, Wells Fargo is a huge bank, they must be international enough that they do this kind of thing all the time… right?
Uh… you don’t accept checks? There isn’t even a way for me to initiate a wire from my Wells Fargo account to a Korean bank account? As Scooby Doo would say, “rut roh!”
There was only one option left, withdraw the maximum daily limit on my ATM card and pool it together with the initial cash I brought until I had enough.
10 days of ATM withdrawals later, and 10 days longer in the hostel than I had expected, I had enough money gathered and I marched proudly down to the bank to set up my account and wire the money to the landlord.
What? I need a Korean address to setup a bank account… And the landlord won’t just take cash? So I can’t get a bank account because I don’t have an address, but I can’t get an address because I don’t have a bank account to send the money. Double rut roh.
Several phone calls between the apartment broker and the bank later it was determined that the bank would in fact allow me to setup an account there and the landlord would in fact allow me to rent the apartment.
Money Before Your Move
My moving fiasco could have been prevented with a few simple precautionary steps:
Bring $10,000 Cash
Cash is king, so bring as much as you can. You might have problems with credit or debit cards abroad, but hard currency will (almost) never be rejected. As of this post $10,000 in paper money is the maximum you can bring abroad as a US citizen without creating tax and/or reporting issues.
Set Up an International Bank Account
As I discovered, your Wells Fargo or Bank of America account is totally useless abroad. However, there are banks with an international footprint. HSBC is my favorite, and they have physical locations in most countries. If you have an account with them in your home country, they can help you set up an account in the country that you’ll be moving to before you go.
Note that you must actually set up a new country-specific account. For example, you cannot access your US-based HSBC account at an HSBC branch in South Korea. There may be some initial setup fees and money transfer fees, but it is worth it for the convenience.
Of course ultimately you will still want to use a local bank for your everyday banking, an international account just makes it easier to move money back and forth between countries.
Advanced: How to Save on Currency Exchange and Fees
Do you have over $100,000 in total assets? Some banks offer special perks if you do.
The $100,000 can be a combination of savings, checkings, and investment accounts. Any easy way to get there might be if you have 401k money sitting around that you could roll over into an IRA account. If you do business online with a merchant account, you could also move it to include in the total.
Again, this is where I like HSBC. With their “Premier” program (do a Google search for “HSBC Premier”), you get several advantages:
- No fees to set up foreign accounts
- Transfer money between your home and abroad accounts online for free with no exchange fees (this is huge)
- Debit and credit cards with no foreign transaction fees
Alternatively, CitiBank also offers their “CitiGold” program. I’m not a fan of Citi customer service, but you might still consider a Citi account if they have a physical branch in a country that HSBC does not.
Good luck and have fun abroad!
Brian Brookshire is a six-time expat who writes about location independence, personal development, and reprogramming your thinking for success at his blog Adventures in Creating a Life of Freedom and Choice.
Photo by the author
Do you have advice, tips or experiences about handling money overseas? You can add a comment below.
What you can also do before you leave is to go to your current bank and see if you can set things up so you can initiate a wire transfer remotely (phone or fax). They’ll probably have you sign some forms and give you a PIN to use.
I had the same problem you did and stopped counting my ATM trips after 214.
I surely don’t want to make 214 trips to the ATM — nice to have advice from trailblazers.
Rich Polanco says
Great post! I recommend using a Capital One credit card for purchases, as these carry no international fees (1-3% fee on purchases for most credit cards last time I checked).
Wiring a lump sum is better, as those fees really add up on every ATM transaction. And some banks are slick, as they limit you to smaller amounts to tack on a fee on each smaller transaction. I learned quickly which banks allowed larger withdrawals and stuck to those instead when I was traveling in Central America.
Another thing to think about — my credit union forgives all foreign ATM fees, so I got back all the $3 charges for using the ATM when I was in Panama.
Brian Brookshire says
I actually use a Capital One Venture Rewards Card myself for most of my purchases. It’s one of the rare non-Amex travel rewards cards that you get 2 points per dollar on all purchases.
For short term travel, it’s not worth it to bother with the hassle of international accounts. For a US-based account you can setup online, Schwab Investor Checking accounts also refund all ATM fees and charge no international transaction fees. They also pay pretty good interest rates. You have to open a Schwab trading account to get one, but there’s no minimum trading obligation.
Rich Polanco says
I had heard about the Schwab accounts too, but have yet to open one.
Moving money overseas is one of those things that got a LOT harder after 9/11.
Best bet is to open an account overseas (if staying long term). Sometimes, accounts are not accessible even if the bank is the same (different owners).
Life’s a beach as they say 😉
And, don’t forget, it will become even harder after 12/31/2012 when the US HIRE act goes into effect. If you have money to move offshore, do it before that date.
It’s amazing how no one mentioned Western Union yet… “The Fastest Way to Send Money…Guaranteed!”
How can you go wrong with that?!
Well, Ed, it’s also one of the most expensive ways to get your money overseas. . .