January 08, 2011

Well, I haven’t left the country yet but I’m already learning quite a bit about the financial system in America and abroad.  One’s ability to spend money abroad is pretty critical, and being able to use that money without getting charged outrageous fees seems like a good idea.  Think you can just look at a list, and pick out the best rates right? Well, not really.

After looking around I did find a more or less general list for credit card companies at (see pages 2 & 3):

http://www.bankrate.com/finance/money-guides/currency-conversion-costs-1.aspx

So what kinda fees did I learn about?

For Debit Cards:

There are a multitude of fees associated with these cards, depending on how you use them.  Debit cards can be used at ATM’s, used as a debit at the point of sale, or swiped as a credit at the point of sale.  This is just like in the United States.  If you pay at say your local Wal-Mart when you enter your pin, you are using the card as a debit.  When you charge at a restaurant and the waiter takes the card and you are never asked for a pin, the card is being charged as a credit.  While this so called “credit” still comes from the checking account, it just allows you to avoid using your pin.

So the fees you have to look for are:

Point-of-sale Debit-Charge: There will be an exchange fee, usually a percentage of the US dollar amount spent

Point-of-sale Credit-Charge: Same fees as above, but can be different.  Bancorp South does not charge an exchange fee if charged in this manner

ATM Withdraw: Fee for using another bank + the exchange fee percentage (not necessarily the same percentage as above)

For Credit Cards:

Credit cards are not so bad, because there is only one way to use them, but you still want to get a good rate.  Right now Capital One has the lowest rate with a 0% fee, but a quick search on Google shows that they have pretty poor customer service.  Typically, credit unions or other groups, such as USAA, will have the lowest rates, but I have also found EverBank.  EverBank is an online only bank that has low exchange rates for credit cards (1%).

Well, that’s the scoop.  I am going to try and get lined up with multiple payment methods to be on the safe side, but I’ll find out how well all this works in just a few weeks!

For a more in-depth overview see: http://goeurope.about.com/od/moneymatters/a/atm-card-fees.htm

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