Money and banking for American expats.

May 15, 2008 9:47 AM

Expats, particularly Americans abroad, how do you manage your money?

Do you keep a US bank account for your credit cards, student loans, etc? Do you try to use a bank with global branches like Citi or HSBC? Do you keep any money in the US accounts beyond the bare minimum? (With the current exchange rates, I would guess not?) What about your 401k/IRAs?

Do you try to maintain a credit history in the US by occasionally using US-based credit cards, or keeping your name on former roommates' leases or utilities? Do you have a friend or relative manage your bills, or a paid financial planner or lawyer?

Was there any financial issue you were kicking yourself about after moving, and wishing you'd taken care of it while still at home?

Any other info and generic advice is appreciated. Thanks!

posted by Mr Bunnsy to work & money (18 comments total)

Do you have a region or nation in mind, because I don't think there is a global answer for any of these questions?

I've lived in various countries, but I've always maintained US accounts, even if I just left them more-or-less dormant. I have never lived abroad in the "developed world" though I suppose that would be unneccesary there.
posted by Pollomacho at 10:04 AM on May 15, 2008

1) Definitely keep a US credit card and account, many online services will not accept foreign cards. Keep this option open. Also very useful when you visit home or if you have a US-based employer.

2) Make SURE that your US bank will do international wire transfers over the phone or online, most likely you will want to keep your money where it is in the US, open an account in the new country and then transfer money over.

3) Get an accountant you trust that is experienced with expat issues and arrange for him to do your tax returns, the several hundred bucks you will spend on this is totally worth avoiding the headache.

4) Call your US bank and inform them that you will be using your credit card/ATM card abroad, many banks have automatic fraud protection and will block your card if they see foreign transactions all of a sudden.

5) Get all of the numbers to close/report loss/deal with accounts from the bank before you leave, BUT do not get their Toll-Free numbers, these are useless or at best hard to use overseas.
posted by StandardObfuscatingProcedure at 10:10 AM on May 15, 2008 [1 favorite has favorites]

I agree with everything StandardObfuscatingProcedure said and would add that it helps to maintain an address somewhere with someone you trust to open your mail from time to time, just in case. (For example in 2006, credit card interest rates went up. I would have had no idea with my automatic withdrawls.)

RE: #4, I have 2 U.S. banks - Bank of America, with terrible fees when traveling and Merchants Bank (in Vermont) with no fees for ATM/debit transactions abroad. I only keep the BoA because they have 24 hour customer service in case I need something.
posted by k8t at 10:21 AM on May 15, 2008

I left the US just after undergrad (to go to Canada for grad school), so my finances were so simple that I had little to "leave behind." I did keep a US bank account open at friendly credit union in case I absolutely, positively needed to do something from a US bank. So far, that hasn't occurred.

Was there any financial issue you were kicking yourself about after moving, and wishing you'd taken care of it while still at home?

I had no small amount of trouble moving money from my US account to my new foreign account. I got a hefty chunk of my old bank account balance issued as a cashier's cheque, since I figured certified funds could be deposited without a hold. Turns out that wasn't true and the new bank had to sit on my certified cheque for three weeks, leaving me scrambling for a security deposit and first month's rent for my new apartment. I still haven't figured out a better way to move money than a wire transfer (which can be complicated) or just hitting up an ATM for your withdrawal limit daily.
posted by Nelsormensch at 10:25 AM on May 15, 2008

I advocate leaving a non-trivial amount of cash in your native country if at all possible.

I am pretty pleased with my decision to some money in Canadian currency in a chequing account when I moved to the US. When I travel to Canada, this is "free money" and I can take some cash and go out for dinner, etc without worrying about fluctuating currency (and the crap-ass US dollar). It also helps to have a native debit card in Canada, as their system is different than the one in the US.

In the US, it would be advantageous to leave some money in your accounts so that you don't have to take the hit on the crappy exchange rate all at once, you can wait and hope that the dollar improves.
posted by crazycanuck at 10:35 AM on May 15, 2008

Re: HSBC

Before I moved to Armenia, I opened an HSBC-US account, thinking that it would somehow help me here.

It was such a pain in the ass to use (granted, I opened the account online and had no real bank to walk in to), that I have the card and $5 in the account but still can't figure it out.

I have a UK HSBC account too and once while traveling in Armenia a few years ago, I tried to use my UK HSBC card and the HSBC Armenia ATM ate it.
posted by k8t at 10:37 AM on May 15, 2008

I lived in Italy on and off for 2 years. I used US credit cards the entire time I was there. I had my paychecks deposited in a US checking account and paid credit card bills from there. Also had an ATM card for that account. I had all mail, including bank and credit card statements, sent to my parents' address. Kept all US-based IRA and 401(k)s.

Mind you, I knew I was moving back eventually.

Do you ever plan on coming back?
posted by charlesv at 11:15 AM on May 15, 2008

I can't clarify that much because my plans are rather nebulous. I will be working/living abroad (someplace developed, likely several places) for a couple of years at least. I won't make immediate plans to return to the US but would like to leave that door open, at least for a few years.
posted by Mr Bunnsy at 12:07 PM on May 15, 2008

I called my bank and told them I'd be out of the country on vacation for the next 10 years... they laughed, but noted it on the account. I use VOIP to maintain a US number where they can call me when they want to verify purchases. Manila is basically a cash-based economy, so I just use ATM's to pull out cash as needed. When the card expires I'll drop by my US address and pick up the new one, although I've contemplated 'losing' it so that they overnight me a replacement. Citi here is a different bank from the US one and any benefits that used to exist no longer really exist there. HSBC is basically the same way. Because of banking regulations, they are partitioned on a per country basis and not technically the 'same bank' (this is what I understand, I am no expert). I am very lucky to have a family member that will deals with my mail. All of my bills are paid online. I did my taxes online, although there are expats here who are tax specialists and know how to deal with the US Embassy and taxes.
posted by joelr at 12:36 PM on May 15, 2008

It really depends on how ex your ex-patriotism is.

I bank, have retirement accounts, make savings and will shortly (hopefully!) hold a mortgage in my country of residence. My intention is to live, work and retire here, so my pension savings are paced to the Irish pension system, which includes a public pension I will be topping up. If I wanted a credit card, which I do not, I would get one through my Irish bank. In other words, I take the ex part very seriously, and bank and invest in the economy in which I live and will retire in.

That said, I share a joint bank account in the US with my step-father. Very little money goes into this account, mostly online affiliate checks in US$. It is connected to a VISA debit/ATM card, and has proven useful when I've needed an emergency parental bailout or when my mother wants to give me birthday cash. If I did not have a relative to manage deposits for me, I'd make deposits through the post and just use online banking for statements.
posted by DarlingBri at 2:09 PM on May 15, 2008

Was there any financial issue you were kicking yourself about after moving, and wishing you'd taken care of it while still at home?

Don't leave your residency in a state where you'll be utterly fucked over by state taxes every year for the privilege of not living there. Minnesota and Massachusetts, in particular, I'm looking at you. Move in with your parents again, or buy yourself a scrap of land with a mailbox, whatever, but get yourself a less greedy domicile.

Do you have a friend or relative manage your bills
Online bill payment. Visa is the only regular.

Do you keep a US bank account for your credit cards, student loans, etc? Do you try to use a bank with global branches like Citi or HSBC?
Yes to the US account. My Japanese ATM card isn't going to work anywhere else in the world, and doesn't even work everywhere in Japan. For example, when I was in Okinawa, the US ATM saved my cash-less butt since credit cards here aren't common currency. My US bank is a credit union.
posted by whatzit at 3:02 PM on May 15, 2008

I'm setup to be quite mobile, and my setup involves a few main items:

• a US based checking account that has the following:
  • Online statements, online bill-pay that will mail a check to anybody, anywhere.
  • Online wire transfers and a nominal wire fee
  • No fees for international use (that includes giving a fair exchange rate on debit card/atm use.)
• A "softphone" through a VOIP provider like Vonage. The hardware phone gets unlimited minutes, but the "softphone" works out of your laptop so it's one less thing to carry, and it gives you a US phone number to call in case you need one.


• A mail forwarding service. There are two major choices, do you get one that scans everything for you, or do you get one that doesn't open your mail, but just describes it and has you choose 'forward' or 'discard'.


• Multiple US based credit cards. Personally I carry a lot of unused plastic, but I like having an AMEX with me if I'm abroad. If you're in some random third-world country and get pickpocketed, AMEX will settle your hotel bill, work out transportation, and get you a replacement card in less than 24 hours. (at least that was my experience with it.)

posted by Project F at 3:12 PM on May 15, 2008

Oh, and HSBC USA isn't realted in any meaningful way to HSBC UK or HSBC Singapore or what not.

If there's supposed to be any integration there, it's completely missing as far as i can tell.
posted by Project F at 3:13 PM on May 15, 2008

Project F, I'm curious about some specifics on your setup:

1) Which US Based checking are you using?

2) Which VOIP? Do you use X-Lite for your softphone?

3) Which are the two major choices? Earth Class Mail and... ? Which one do you recommend?

On my end, I have Washington Mutual (because I had it before I started traveling) but I just added a Schwab Bank High Yield Investor Checking because it's supposed to have no ATM fees overseas. I have yet to use this overseas, however, so I can't personally confirm it.

I have (and can recommend) a Capital One credit card because it has no currency exchange fee. I also like my Citibank because it has one time use credit card numbers for online purchases.
posted by sharkfu at 3:29 PM on May 15, 2008

I have continuously lived and worked outside of Canada for the last 15 years or so, and sporadically for the 5 years before that. For what it's worth (because I am expat but not American) I long ago severed all financial ties with Canada, and maintain no credit cards or bank accounts or property or anything at all really. This is in part because Canadian tax authorities may decide on a case-by-case basis to impose double taxation (your country of residence and Canada taxes) if you maintain sufficient (and nebulously defined) financial or residential ties to Canada.

I understand that American rules are different, though, and that you are (as I recall) tax-free abroad up to earnings of 80K and taxed after that by the IRS.
posted by stavrosthewonderchicken at 4:43 PM on May 15, 2008

Before I went to Egypt for a year, I opened an account with HSBC (US) because HSBC ATMs are easy to find in Cairo. You get a slightly better exchange rate that way. All banks, credit cards, etc were set to web statements only. I used the Billpay feature on my checking account at Fidelity to take care of any random bills that required a physical check. My mail went to my parents' house.

I rarely used a credit card in Egypt, but when I did it was always the Capital One card because unlike other companies they absorb the fee Visa/MC impose on all foreign transactions, rather than pass it along to the customer.

Nthing the suggestion to setup some sort of software VOIP program before you go. Personally, I recommend the combination of Gizmo Project (a softphone) and Grandcentral for free incoming calls to a US number (and free calls TO US numbers as long as Grandcentral remains in Google Beta mode…)
posted by Fin Azvandi at 1:51 AM on May 16, 2008

A few things to add:

1) Check with your US bank before you leave what the requirements are for wire transfers. Mine required that the first wire transfer be done in person - at a US branch.
2) Get it so everything is done online, as others have mentioned.
3) Keep your bank acct open and US debit/credit card. Immensely useful abroad. Get the address changed before you leave to your parents address or some other trusted address.
4) Take time to understand the US tax laws and the tax laws of the country you are moving to. You dont want to incur unnecessary tax or even suspicion by moving large amounts of money around. Thats yet another reason to keep your US account open.
5) I have a separate US and UK bank. I can see the advantages of a global bank but I havent seen any major disadvantages by keeping my money in two banks.
6) Your US bank may have an international toll-free number. Mine did. Check with them.
posted by vacapinta at 3:50 AM on May 16, 2008

My mother has always been a co signer on my accounts and my primary beneficiary. I trust her with my finances more than I trust myself. So for me living abroad more or less for the last three years, always moving around, it has made a lot of sense for us to set up a power of attorney. I went to a local attorney and he helped us draft a document that allowed her to sign all sorts of stuff for me. Now when I file my taxes and get my tax refund, for example, she is allowed to sign my tax return for me and then sign the check over to my bank to be deposited. This is fabulous.

Of course I realize that I'm very lucky to have such a mother who is willing to do all this for me. But if you have the same opportunity with a friend or relative, I say definitely go for the power of attorney. You never know when it might come in handy.
posted by mosessis at 9:32 PM on May 21, 2008