What is the most cost-effective solution for banking while living overseas for ~4 months?

July 18, 2006 3:19 PM

What is the most cost-effective solution for banking while living overseas for ~4 months?

I will be studying abroad in Denmark for roughly four months this fall. I have read all over MeFi and the wider internet for finance-related tips. I have settled on a CapitalOne card for credit purchases (0% fee) but haven't found a suitable solution for a checking account / ATM.

I currently have a checking account with SunTrust (Atlanta-based medium-sized bank) and savings with HSBC Online. SunTrust is going to charge me $2 plus 2% for every ATM withdrawal. HSBC only $1.50 plus 1% but I am doubtful that I will be able to withdraw from savings everywhere.

Can anyone give me a suitable solution? I would like to find a US-based bank at which I can open a checking account and not get creamed with fees and charges using overseas-ATMs and making international debit purchases but I haven't found it yet. I feel that opening a local (Danish) checking account may be more trouble than it's worth for only 4 months, although I'm open to convincing. Anyone?

posted by jckll to travel & transportation (16 comments total)

I was using Merchants Bank in Vermont while living in the UK and sending all of my credit card payments and stuff via eCheck. They charged me $1 for every ATM withdrawl. I also used it as a debit card while I was in the UK and there were no charges for that.

Call all of your local banks and ask them what they charge for foreign transactions. Chances are that smaller banks will be more understanding, I'd bet.

If you're moving back to Atlanta, especially, you might as well stay with your bank that you're currently using and just suck it up.
posted by k8t at 3:22 PM on July 18, 2006

I refer you to my answer here.

USAA is delightful. I use them in Argentina and it's been great.

Also, when you say debit purchases, what do you mean? I can use my checking account card as a credit card and the money is sucked directly from my checking account. I cannot, however, use the card with my PIN to complete sales (I can and do to take money out of the bank, of course).

I also get a certain percentage (1%? .5%?) cash back on any purchase I make on the check card, as well as a fantastic exchange rate.
posted by veggieboy at 3:34 PM on July 18, 2006

USAA is no longer accepting new applications from non-miltary as of June 30...
posted by yeoz at 3:51 PM on July 18, 2006

RE: debit purchases, I guess that's exactly what I mean. No need to use a pin at POS when I can simply use a check card as a credit card, or even better use CapitalOne at 0%.

I guess I'll give USAA a call tomorrow, but if they're not accepting any non-military applications, I'm SOL there. Any other recommendations?
posted by jckll at 3:54 PM on July 18, 2006

I've been reading up on this recently. Using credit cards used to be the way to go but this is trickier nowadays with banks charging up to 3% commission on transactions. I'm impressed that Capital One is 0% - I may have to accept one of those 10 applications they send me a week.

It's difficult to find a decent comparison listing charges abroad for different ATM & Credit cards for some reason but here's a fairly decent one -- ATM towards the bottom of the page. I would recommend using your credit card wherever possible and then cash where you must because, depending where you withdraw from, the machine owner may take their cut too.

Finally, always try and withdraw the maximum amount you can (avoiding muggers) so you only take the fixed fee hit once.
posted by NailsTheCat at 3:57 PM on July 18, 2006

FYI: citibank charges me a flat 1% on debit card transactions overseas.
posted by felix betachat at 4:47 PM on July 18, 2006

Interesting development about USAA. Sorry, cklennon, I hadn't heard about that.

Since you're going to be abroad a relatively short time, I second k8t's advice about trying to find a small bank that will work with you. When I banked at the tiny savings and loan where I grew up, I was always surprised at the fees they would waive if you just smiled and asked nicely.

Even bigger banks (e.g., Chase) can be persuaded to waive fees if you call and ask nicely and firmly. Or show up in person. Have you tried telling SunTrust that you would love to keep your money there, but that you're not going to if they can't waive a few of those fees per month? Sounds cheesy, maybe, but similar gambits have worked for me surprisingly often.

Finally, I just got off the phone HSBC (I've got an online savings account with them, too) and as part of their annoying sales pitch, they told me that if you open their checking account, they charge you no fees for withdrawals at any ATM anywhere. It would come down, then, to whether the banks in Denmark charge you to make withdrawals. In many places I've traveled, I was never charged by the bank to whom the ATM belonged, only by my own crummy bank back home. So that might be a good option (maybe convenient too if you've already got an HSBC account).

Good luck.
posted by veggieboy at 4:59 PM on July 18, 2006

Unless you are sharing accommodations with people you don't trust, I suggest withdrawing big chunks of cash from your overseas account and just live off that. I did it for five months while in the UK temporarily from May to August 2002. It was inconvenient at first but I quickly adapted, and it was kinda fun to have thick wads of bank notes in a shoe box at home. Made me feel rich, even though I was poorer than at any other point in my life.
posted by randomstriker at 5:22 PM on July 18, 2006

I studied in Ireland from a year. I had money in my Michigan-based credit union, and they charged me nothing extra to use my card there. Additionally, the ATMs there were surcharge free to me, so the only screwiness was the exchange rate. We found that credit cards were easy enough to use, but a LOT of places had minimum spending limits (e.g., a friend tried to use her cc at an off-license/convenience store for something under 5 Euro, and they hassled her about it because it cost them more), so if you're planning on making small purchases on a card, that might also be a factor to consider.

I did, however, open an account at Allied Irish Bank, and it was useful enough for a few things: they offered international students a free Student Universe card for signing up, and since it was pretty expensive otherwise (and it was SO worth it because I saved LOADS on trainfares for travelling about the country); I was able to regularly take in the rather hefty sum of coins that I had acquired for notes, and that wasn't available elsewhere (i.e., at a non-bank); and I got all the benefits and services that you get from a normal bank--fee-free cashing of traveller's cheques, trouble-free cash-advances, etc. It cost me nothing to open or close it, and the paltry amount I kept in the account to keep it open was well worth it.

I would recommend against randomstriker's advice unless you are an absolutely frugal spender (cash goes FAST if you're not paying absolutely close attention to it, and in a situation like the one you'll be in, that can be a little dangerous--a month without actual cash is pretty difficult) and you really trust your roommates and the area you'll live in. I had several friends who had their apartments broken into because someone on the third floor left a bathroom window open one afternoon. A lot of their stuff was stolen. (And FWIW, they weren't in a bad part of the city, though maybe they would have known more about crime trends had they lived there longer.)

Anyway, good luck and enjoy Denmark. I'm so terribly jealous. ;)
posted by monochromaticgirl at 6:55 PM on July 18, 2006

I was also doing what randomstriker suggests when I lived abroad for 4 months (withdraw huge amounts of cash). I also had a credit card with me for emergencies and reservations/deposits, but the fees were annoying enough to prefer cash.
posted by easternblot at 6:56 PM on July 18, 2006

I am in Shanghai for the summer, and I am withdrawing money at ATMs bearing the Cirrus logo with my GMAC Bank ATM/debit card. GMAC doesn't charge for ATM withdrawals, and they also reimburse fees charged by other banks for withdrawing money from their ATMs (up to a certain dollar amount each month).

Plus, they're offering 5.05% APY right now.
posted by roomwithaview at 7:00 PM on July 18, 2006

Thanks for all the tips everyone. I may look into opening a local checking account once I get there if I am not able to find a suitable solution before I leave; it's not out of the question but I'd rather figure it out before I go.

I have a list of banks I'm gonna call tomorrow to see what kind of info they can give me. USAA, State Farm (offers 0% int'l withdrawals and reimburses a certain # of ATM transactions according to flyertalk), going to check HSBC checking (as I have my savings with them as mentioned above) and a few local banks.

RE: GMAC, that sounds like a nice option, roomwithaview, but GMAC only offers savings/MMA as far as I can tell. If I can withdraw from savings via an ATM that's a definite possibility but the reason I am looking for a new solution in the first place is that I'm worried I won't be able to do that. GMAC seems very comparable to HSBC which I use now for online savings (believe the APY is almost equal).

I guess an additional question, for anyone familiar with Denmark specifically--although I'll be travelling I'll be in Copenhagen for a majority of my four months--is it possible to use a foreign ATM card to withdraw from savings? I've herad that this can be troublesome in some locales!

Thanks again for all the great responses :)
posted by jckll at 7:29 PM on July 18, 2006

I'd be wary of relying on an ATM card. I have zero experience with Denmark, but I have had trouble using my Canadian ATM card in the USA, and it's really distressing when that's your only source of cash.

SunTrust has a pretty good online banking site. If you can buy with your credit card, and then transfer the money from your account online to the cc, you should be okay. That, coupled with a wad of domestic cash for places that don't accept credit.

And tell all your banks that you're out of country and for how long, or they might flag your account for suspicious activity and freeze your funds at an inconvenient time.
posted by joannemerriam at 8:16 PM on July 18, 2006

Ah, of course. Noted.

But as an aside, with GMAC, I actually have to select "checking account" as the funding source for the withdrawal at the ATMs here.
posted by roomwithaview at 10:53 PM on July 18, 2006

Here is the Cliffs Notes version of my Indonesian bank-account opening experience:

Me: (In English) Excuse me, I'd like to open an account here.
Bank employee: (In English) Sure!
[Fifteen minutes of paperwork]
Me: Is that it?
Bank employee: Yup!
Me: Wow!

Opening a Danish account will almost certainly save you heaps and heaps of trouble every day. It seems that no US bank would be willing to provide you with the same number of free and almost-free services that a local bank would, and considering the considerable cost of calling home to sort out whatever hassles may arise instead of just walking into the nearest branch of the local bank, I think opening a local account would almost certainly save you money.

One thing - consider a savings account instead of a checking account. In my experience (in the US and Indonesia), it's cheaper (free, maybe!) and easier to set up, and you get the all-important ATM/debit card, which might be Visa/Mastercard-logoed and will be useable everywhere just like your credit union checking-account-linked ATM/debit card in the States. I'm working in Indonesia for the year and do everything with my "kartu" - buy plane tickets, get groceries, buy cool stuff online...I've even got direct deposit of paychecks!

The Danish government's official website on the subject of banking and finance mentions two banks, Nordea and Danske Bank. Seems that with millions of customers, you wouldn't be the first non-citizen to walk in there and seek some assistance. Heck, your university will probably wrangle everyone for some kind of orientation and frog-march you all off to the nearest branch of Bank X and get you sorted out. You'll probably also need an address for any kind of account, and I'm assuming you don't have that yet.

Here's a website from the Copenhagen Business School on foreign students and banking.

One last thing:

I'd rather figure it out before I go.

Not to minimize your instinctual practicality, but relax! You've got nine other ways to pay for things in the two days it'll take before you get set up. Copenhagen isn't Ouagadougou - you'll be fine just walking into a bank (which you'll have chosen because of the swish graphic design of the logo, like I did) and asking politely if anyone can help you set up an account in English, which, of course, they'll be able to.

Have a great time!
posted by mdonley at 8:36 AM on July 19, 2006

Having opened a bank account in France for a nine-month stay, I wouldn't do it again for only four months. Too much paperwork, opening-and-closing fees, and entering into contracts you don't fully understand. (Warning: Cash card theft liabilies vary greatly between countries.) Or you might want to do it just to "enter into the experince" more, and that's a perfectly good reason so long as you're careful.

While you're still here though, and thinking about it, why not switch from a crappy bank that fines you for using other ATMs (which costs them nothing) to a good bank that doesn't? First Republic (California, New York, Boston) is one of the angels that actually refunds ATM use fees charged by other (US) banks. I keep thinking I'm going to wake up from that dream.

Enjoy your stay!
posted by Doctor Barnett at 9:17 AM on July 19, 2006