Categories: Advice and TipsLocation IndependencePlanningpre-trip

A Little Advice…What’s in Your Travel Wallet?

Stepping away from travel stories, I wanted to share focus on the practicalities of traveling long-term and talk about handling money abroad, as well as which credit and debit cards rank as traveltasticly special.

**This post was updated in January 2016 to reflect new credit and debit cards on the market and my honest opinion on what I find works best.**

Together, my cards and I have been through the good (no withdrawal fees), the bad (two percent transaction fees) and the ugly (whaddaya mean I can’t make a withdrawal or transaction in Slovenia… but I’m IN SLOVENIA). After more than six years traveling, I learned that finding seamless banking solutions made a huge impact on my travels at the end of the day. Many lessons were hard-learne, so here is how I handle money on the road.

Travel Considerations for Credit & Debit Cards

  • Transaction Fees: What is the percentage for transactions made on your credit card, and on your debit card when it’s used as a credit card (swiped and not used at an ATM)? Find this number for your current card and write it down so you can compare.
  • Withdrawal Fees: Many banks charge a flat fee every time you use an international ATM. Ask before you leave.
  • Are any countries blocked?: Back in 2008, my credit union blocked Thailand and Slovenia because my bank designated them as “highly likely for fraudulent activity.” Now that I switched banks, this is no longer an issue.
  • Online Banking: This is a no-brainer, but you really should be able to get access to your account balance abroad—particularly important for long term travelers.
  • Carry different brands: You should have a Visa and a  MasterCard, some countries more widely accept one over the other.

Does my debit card company really matter?

A resounding yes! Many banks charge a foreign withdrawal fee every single time you use an ATM outside of your country. Depending on the rate (some are even over $3 per withdrawal) it swallows up your savings. These fees add up over time and can easily be avoided with research ahead of time.

My Saving grace: Schwab Online Banking

Charles Schwab is a completely online based bank and they have unparalleled advantages for travelers—better than any other US bank I’ve heard of yet.

The Good:

  • No foreign transaction fees.
  • No ATM withdrawal fees.
  • They reimburse withdrawal fees from other banks!
  • They’re online so they’ll never ask you to come into the bank branch to pick up your replacement for a stolen card while you’re sitting on a beach in Thailand.
  • Customer service over the phone has always been a cinch, and email responses to questions are fast.

The Bad: 

  • It’s completely online, so if you’re like me, you sometimes like to have a human to point at and make ugly faces to when things are going wrong. With Schwab you’re left making faces into the phone. Somehow less satisfying.
  • BUT, they do have investment branches in most US cities and they warmly welcome walk-in banking customers who have questions (just no actual banking).
  • I hear that transferring funds around is difficult (read through the comments); I don’t do any of this, I direct deposit my paychecks and leave it at that, so this could be true and a drawback if you juggle funds from many accounts.

Final Thoughts on Debit Cards

When I left on my RTW trip the economy was at the beginning of the recession and I was moderately content with the $1 foreign withdrawal fee tacked onto ATM withdrawals from my Credit Union bank account. Fast forward nine months, the recession hit hard, and my Credit Union upped the fee to $2.50 per withdrawal. Once I got back to the US I switched to Schwab and they have lived up to their fee-less withdrawal promises throughout 20+ countries. At the end of every month Schwab deposits a reimbursement for fees into my account; considering that Thai banks charge $5+ per withdrawal, this was always a significant reimbursement each month. It makes a huge difference to have that single asset on my checking account. I just love the Schwab card and truly recommend that you travel with it above most others as your primary bank card. They have a great online interface and truly refund you every single foreign withdrawal fee.

Credit Cards for Travel—Necessary or Folly?

I rarely  support going into debt to travel, and credit cards fall into a dangerous territory if you’ve ever abused them in the past. That being said, things happen and it’s wise to travel with a credit card. They come in handy and should anything happen to your bank account (like no freakin’ withdrawals in Slovenia!), you have a back-up and some surety. I use a credit card for things where cash won’t work and I don’t want to swipe/risk my bank card (I rented a car in South Africa and was so glad that I used it instead of my bank card since they overcharged me and it took months to resolve!)

My Saving grace: Chase Sapphire Preffered

I switched to Chase Sapphire Preffered in the summer of 2013 as a way to earn enough miles to pay for my flights to Africa. The card has a great signup bonus as well as attractive ways to earn miles and great international policies. It does carry an annual fee, however, so this turned out to be right for me, but read on to decide if you’re better off going with a non-rewards card, which has no fees and could be better for a RTW trip.

The Good:

  • No foreign transaction fees tacked onto international purchases.
  • 40,000 bonus miles if you meet the spending requirement in the first three months, then miles deals the rest of the time.
  • International customer support.
  • Full online access and great interface.

The Bad:

  • After the first year the Sapphire card carries an annual fee, so it’s best if you are playing the game of using the card to earn miles, otherwise you can get the same benefits with no fees.
  • Rewards cards—like the airline miles credit card—carry higher fees so if you’re prone to carrying a balance on your card, go with a credit card that has lower fees.

Another option I have used in the past is Capital One. CapOne is a frequent traveler choice because they don’t have foreign transaction fees. I carried this card until 2013, but I hated their customer service so I find that I usually just leave it at home and stick with my Chase Sapphire instead since it earns me miles. That being said, Capital One has consistently been the one North American credit card that never charges international transaction fees. And it’s true, I carried my CapOne card throughout all 14 countries on my RTW trip and it worked in every single place. It doesn’t have any annual fees, so it could be a good option.

Final Thoughts on Credit Cards

I carry my Chase Sapphire credit card in my arsenal because it lacks the international transaction fee and I earn miles. There are other Chase cards without the annual fee, but still with the great Chase customer service, so you could do some research there. This is a murky area because there are so many credit card options out there. I don’t really play the travel hacking game, but if you’re looking to learn more about travel hacking and using your credit card to earn miles, I recommend you read up at Chris Guillebeau’s dense resource page, or dive into the vast resources on The Points Guy.

Other Credit Cards Inside and Outside North America

These two companies work for US-based travelers. I have no experience with these other companies but have heard and read good things about their travel policies:

  • ING Direct: Read through the comments below, other people have raved about the ease of money transfers and service.
  • Capital One Direct Banking: Also comes highly recommended in the comments for their easy online interface and no transaction fees.
  • Caxton FX Global Traveller (a prepaid MasterCard – I know nothing about it, but RTW travelers have raved)

Any other great travel-friendly cards out there? What do you take abroad?

Disclosure: I have no degree in finance and I give you no guarantees on using these companies. This is just a personal, friendly recommendation from a fellow traveler; no more and no less. :) Oh, and no one paid me to recommend their cards so these recommendations come from personal experience and reader feedback.

This post was last modified on January 30, 2018, 12:56 pm