Debit and credit cards

Money! I may not have a lot of it, but when I put it into a bank I expect to be able to access what little money I do have. Credit cards can help a lot, but there are still a lot of places that don’t take credit. And when you’re in another country you can also expect huge foreign exchange fees when your not using the right card. This is the abridged story of my struggle to access my money last semester, and some of the best options I’ve found while living and traveling abroad.

Merrimack Valley Federal Credit Union

MVFCU is a small credit union in my hometown. It is my primary bank in the United States, and it’s great! Not only do they not charge me ATM fees, but they also reimburse the ATM fees that OTHER banks charge me. Many of the fees they do have are waived for students, and the rest of their fees aren’t too bad. For anyone looking for a bank account in the United States definitely check out a credit union before you open an account at a regular bank.

Unfortunately, MVFCU has it’s drawbacks. Some of them I was aware of before I even left the States. First, they are very small, operating only a handful of branches. This means that if you want to talk to a person face to face and you’re not in my hometown or nearby you’re out of luck… If you’re are abroad things get even worse. They don’t charge foreign exchange fees, but if you don’t notify them ahead of time that you’re going to be in a specific country they disable your debit card when you try to use it. And that notification only lasts 3 months! So if you’re going to be abroad for an extended period of time, oh say getting a Master’s degree and traveling around Europe, this is extremely annoying. Not to mention that their customer service, while great, is only available during bank operating hours.

Last semester I was cut off from my MVFCU account a minimum of  3 times (in at least 2 countries), which is why early in the semester I decided to open an account with….

CIB Bank

CIB Bank is a subsidiary of an Italian bank called Intesa Sanpaolo. I knew the terms of the account weren’t great, but I thought it would be worth it to have a Hungarian bank account while living in Hungary. This was also the account the University recommended to students (or at least made an agreement with, which I would still consider an endorsement). Issues with this bank came up early. Due to the number of student accounts that were being opened it would take a month or longer for me to get my debit card. This would have been a minor inconvenience  if I wasn’t still cut off from my MVFCU account at the time for starting my travel advisory too early (during this time my account was also cut off when I forgot to tell them I was traveling to Croatia). So a minor inconvenience turned into a disaster, thankfully I had plenty of friends willing to help out.

Once my account was opened things got worse. Almost everything I did with the account cost me money. Even using THEIR ATMs cost me money if I used them more than twice a month. Worse, when I paid my landlord rent, they charged me a fee AND deducted additional money from the amount I sent. So the amount reaching my landlord was less than what it was supposed to be. She wasn’t too happy, but forgiving when my roommate sent the rest of his rent plus some extra I gave him to cover what the bank took. Over the last semester my account was bleeding money to CIB, 1% here, $35 there, another 321 Ft somewhere. So I decided I was fed up and I tried to open an account with…

Charles Schwab Bank

Charles Schwab Bank logo
© Charles Schwab

The first time I tried to open an account with Schwab I was denied because it is apparently illegal to open a US bank account while you are abroad even if you are a US citizen. So after getting back the money I initially transferred into this non-existent account (Do you know where money goes when you transfer it to a non-existent account? Me neither, but it was there for almost a month…), I decided to wait until I got home in December.

When I tried to open the account in Boston things went exceptionally smoothly (it helps that they already had my info on file). The type of account I opened is called a High Yield Investor Checking Account, and has no monthly fees, no minimum balance, no foreign transaction fees, 24/7 automated support, a live person is available most of the day, no ATM fees, and they refund ATM fees other banks charge. Everything with this account (minus the issues trying to open the account from abroad the first time) is going smoothly so far. The only catch with the account is that you need to open a linked brokerage account (a trading account) as well. However there is no obligation to trade or even have money in that account.

Now that I have this account up and running, I’m going to stop using my MVFCU account and close my CIB account. My loan money will go straight back to the United States into my Schwab account as soon at it arrives. However, even if my loan money doesn’t show up right away I don’t to worry too much because I have a…

Chase Sapphire Preferred Credit Card

Chase Sapphire Preferred Card
© Chase Bank

This card has been a life saver! First, thanks to a promotional offer when I got the credit card I got 40,000 reward points for spending $3,000 in the first three months. Considering I needed to buy a new laptop, cellphone, and airfare to Europe this was a pretty easy goal to get to. It has no foreign exchange fees, double points on travel, 24/7 live customer support, discounts when redeeming points on travel, as well as a whole lot of other benefits…oh, and it looks really cool!

Back in August/September when I was effectively cut off from both my bank accounts I called Chase and they said that they would try to waive as many fees as they could if needed to use my card to get a cash advance (something that normally incurs significant interest immediately). Not to mention their website is easy to use, and has a cool feature called Blueprint which I’m using to help pay down the balance from my trip home (which was $300 cheaper thanks to my reward points). I wouldn’t use Blueprint’s Full Pay feature though. Sometimes it completely mis-categorizes purchases which defeats the whole purpose of the plan.

I love this card, now that that both of my primary banking/credit companies are American I might as well mention my favorite budgeting software…

Mint

Mint.com is software that tracks your expenses, both income and withdrawals from your savings account as well as credit card transactions. All transactions are pulled automatically and aggregated in one place. You can only have a single recurring monthly budget with the occasional one-off expense, so I still make my long term budgets in Excel. However Mint is a great supplement to my budget and allows me to see what I’m spending in a nice graphical format, as well as how my spending is changing over time.

 Conclusions

While I should have just gotten a Schwab account before I left for Budapest (after all my friend blogged about it a while ago), this adventure has given me a deeper understanding of international banking. Although frankly, I would have rather had uninterrupted access to my money last semester. Schwab Bank and Chase Sapphire Preferred are the way to go!!

I hope my story helps you make better banking decisions abroad. Have you run into any issues? Any suggestions for better banks or cards? Any similar issues? If so try out the new comment section below!