Moving to Europe: Finances?

March 21, 2007 6:55 PM

Moving to Europe: Finances? (Credit cards, bank, etc)

I'm moving to Austria in ~6 months as a student for about 2 years, and I'm trying to figure out what things I should do with my finances.

I'm currently an account holder at USAA, and have been happy, but I wonder whether I would be well served getting an account at a European bank, and/or getting a European credit card (I hear that all foreign credit charges on US cards involve at least a 1% transaction/conversion fee directly from Visa or MC or Amex, even when the card issuer itself advertises 'No transaction or conversion fees').

Just applied for a Starwood Amex card, as for my travel needs, it will provide ~2.25% returns on my dollar in the form of air mileage. This gets less impressive when 1% transaction fees are factored in. Can I do better with some sort of European credit card?

To complicate things, I will be travelling on a Student Visa, and will probabaly have little income for at least 6 months. (I have a lot of money saved up for funding this degree)

posted by sirion to travel & transportation (12 answers total)

Well, how much do you plan on spending? 1% of $20,000 is just $200, a relatively tiny amount.
posted by TheNewWazoo at 8:59 PM on March 21, 2007

Perhaps opening a savings account linked to an Austrian-bank-branded debit card might be the way to go, for the sheer sake of convenience.

Here's a "student" account from a random Austrian bank: I can't read German but I assume you can if you're going to Austria for a few years!
posted by mdonley at 10:46 PM on March 21, 2007

I'd think you'd want a giro account, as it should make it easier to use Austria's equivalent of Electronic Cash (surely they have this). Otherwise, if you just had a savings account, you'd probably have to carry cash everywhere that didn't take credit cards (if it's like Germany, this is almost everywhere).
posted by oaf at 12:35 AM on March 22, 2007

This account from Postsparkasse gives you a free Maestro card. I have no idea what their service is like, but I was happy with Deutsche Postbank.
posted by oaf at 12:40 AM on March 22, 2007

You'll want to open a European bank account, if for nothing other than the fact that, in general across Continental europe, cash machines are not as numerous as in the States. Hence, as oaf recommended, you'll want to be able to use elcetronic cash in alot of situations where you won't feel like combing the streets for an ATM.
posted by rudster at 12:56 AM on March 22, 2007

I'm not sure how things are in the US (or Austria for that matter), but moving from the UK to Switzerland was a shock bank-wise as everything (current accounts, paper statements, credit cards, debit cards) costs money, whereas in the UK, "free" banking is the norm. But I would recommend a local bank account, for the reasons oaf and rudster have given.
posted by jontyjago at 3:09 AM on March 22, 2007

PSK is fine, but might be a little strange for an American, as it's tied to the Austrian Post Office. Their services are often cheaper, but you're probably less likely to find personnel who speak English in a PSK than in one of the bigger banks like Erste, Bank Austria or Raiffeisen. On the plus side, you can buy stamps at one counter and do your banking at the next.

Maestro is a debit (Austrian: Bankomat) card. It can be used at ATM's (Bankomats) and at many stores to pay for purchases (although you can't get cash back from any stores that I know of). You can pay with a European Bankomat card in more places than you can with a US-issued credit or debit card.

You should start thinking about how you're going to move your money into an Austrian bank account. You have several options, and each will cost you some money. An international wire transfer from Austria to the States generally involves a fixed fee (or several) and a percentage fee. You should ask USAA what they charge for a transfer to an Austrian account, and you should speak to someone at an Austrian bank about what it will cost to receive the transfer (if anything). If you bring cash or any dollar-denominated instrument, you're going to have to pay a currency exchange fee. If you want to exchange currency, drop me an email (in profile) - one of my good friends here in Vienna is the manager of Austrian operations for a European currency exchange company, and he's offerred arrange cost-free exchanges for me - I could ask him if it would be possible to get you a discount.

Credit cards are much less popular here than in the States, and you may find it harder to get one, especially with no regular income. My bank is mostly interested in seeing a regular monthly salary check deposited into my account. From the number on that check, they decide which services I'm eligible for. You shouldn't really need a credit card here, unless you are using it to make online purchases (or to pay for airline tickets).

If you have any specific questions about moving to Austria, feel free to drop me a line. I've been living and working here since October, 2000.
posted by syzygy at 3:49 AM on March 22, 2007

"You should start thinking about how you're going to move your money into an Austrian bank account."

Also investigate tax liabilities.

I'm an American who has lived in London for about ten years; I work, generate my income in England, and pay taxes on that money.

Any money I earn outside of England, is only subject to taxation by UK authorities when I bring the cash into the country.

There is a maximum that's allowed before taxes on the UK side are due, but as I never bring cash into England I don't know what this amount is. More than likely as a student this won't be a problem (amounts are likely to be small), but you should have an idea just in case.

Oh! Assuming you're American keep in mind that we're taxed on the basis of Citizenship, not Residency. You will have to file US returns covering all income earned while abroad.
posted by Mutant at 6:02 AM on March 22, 2007

You definitely want a bank account in Austria. You will probably at some point have some trouble with your American bank account there for some random reason, and your Austrian account will be far more reliable, plus you can always go to a branch to get help from people. Also, I don't know about Austrian cards, but German debit cards are kinda cool looking and you get this sweet plastic carrying case.

Europe is very much a cash economy, while I was in Germany doubt I ever used anything other than cash. Obviously a lot of places are getting to where they take debit\credit cards these days (and they're pretty essential for online shopping) but it's really easier to just use cash where possible.

Also, syzygy is right about money transfers. I didn't ever find a way to do it effectively, and just ended up using paypal to do transfers when I needed to. I was only transferring on the orders of hundreds of Euros though, it might become prohibitively wasteful to do it this way with larger sums. Another way to do it is to withdraw money from your American (or home-country) account at an ATM in Austria and then just deposit it back into your Austrian account. Be advised that many banks will limit you to $250 - $500 withdrawal per day, and ATM limits may apply as well (this one got me when I needed $1400 suddenly for an expensive trip I was going on).

If you have more questions about anything, e-mail's in the profile. Viel Spass in Österreich!
posted by !Jim at 10:07 AM on March 22, 2007

You may also find that a lot of places that will accept VISA / MC payments will not accept Amex...at least in the UK. And you will definitely find that debit cards are the way forward in Germany and Austria.
posted by koahiatamadl at 1:54 PM on March 22, 2007

As everybody has said, you definitely want to get a European account. When people say that Europe is more cash-based, it's a bit misleading. Almost every place you go will take an EC Card (like a debit card), but it's very hard to find places that will take American credit or debit cards.

When I moved to Berlin, for example, I was shocked to find that most grocery stores and electronics stores don't take credit cards. They all took EC or Maestro cards, but only one really big chain (Real) and a few gas stations (Aral mostly) took credit cards, so I ended up doing a lot of my shopping at those until I got my Deutsche Bank account set up.

It was really weird to buy a new cell phone with service and everything at Saturn, dropping a few hundred Euro, and have the woman at the counter almost shocked that I would even think I could use a credit card.

I was initially under the false impression that I could open a Citibank account in Germany and easily transfer money from an American Citibank account, but that is nowhere near the case. Getting the money there can be quite a pain. I opened a German Paypal account and linked it with my German bank account, then did transfers from my American account. I know this isn't the most efficient way, but it was easy and required little human interaction. I did eventually get flagged as a possible money launderer, thoug, so YMMV.
posted by atomly at 3:46 PM on March 22, 2007

I lived in Glasgow for a year, opened an account with a local bank and never kept much money in it... I would use the banks ATM outside (they would charge nothing to take out pounds from my american account, but my american bank would charge $2.00 per transaction) and take out the max amount of money at one time, I think it was 500 pounds, walk inside and deposit that money in my bank of scotland account.

Then I could get money out using my glaswegian account / ATMs and also use their debit services. When that money was gone I would do the transfer again. It seemed to me that it would have been more expensive / headache / time consuming to transfer the funds directly between banks, and the ATM had a very good exchange rate.

When traveling most places would take one of the two debit cards (american or glaswegian) with no problem.
posted by outsider at 7:33 AM on March 23, 2007