Friday, May 11, 2012

Accessing Money While Traveling: An Endorsement

Every traveler to a foreign country has to deal with the issue of money. If you're planning to spend longer than a day or two away from home, your costs are likely to be greater than the amount of cash you feel comfortable traveling with. Travel experts have suggested various solutions over the years, none of which are perfect solutions for all travelers in all situations. When preparing for my trip to China, I spent more time than I care to admit researching the options. I ended up deciding that for a three-month trip through a wide variety of cities, my best bet was to rely on ATMs to provide a steady stream of Chinese RMB. Of course that led to the next question: which bank should I put my money into if I want to pull it out in China. More research? More research. I looked on bank websites, read reviews, called customer service representatives, and did all the other due diligence things necessary until I found what I believe is far and away the best bank account for U.S. travelers abroad: a Charles Schwab High Yield Checking Account.

Here's why Charles Schwab is the best, hands-down:

1. There are no maintenance fees on a checking account. True, most banks offer this, but not all. It's a good place to start.

2. With your Charles Schwab bank card, you are entitled to pull money out of any ATM in the whole world, so long as it has a VISA logo on it. This is good--those suckers are everywhere.

3. Here's where they start to distinguish themselves. Unlike some big banks, Charles Schwab doesn't charge you any fee to pull money out of a different bank's ATM.

4. Continuing with this "no-fee" thing, Charles Schwab doesn't charge you a conversion fee. Many banks charge a percentage of the withdrawal amount as a conversion fee if you are collecting a different currency than the currency in your home country. I'm not a banker, but it seems to me that conversion fees are pretty silly. Does it cost a bank anything to calculate the conversion rate? If I can check on Google for free, I don't get the sense that a company that lives and dies by exchange rates would have any trouble with it. So why charge me anything to do it? Charles Schwab succumbs to logic and charges no conversion fee.

5. This is the real kicker. In addition to the above no-fee tactics, Charles Schwab goes one step further and offers to reimburse you if the ATM you are using charges you a fee. Think about that for a moment. How many times have you been traveling--abroad or at home--and had an ATM say that it's going to charge you $3.00 because the bank name on the ATM doesn't match the bank name on your card?  With Charles Schwab, the ATM can charge all it likes--Charles Schwab will literally pay you the money back. This is fantastic.

So it sounds good in theory, yes? How does it work in practice you say? Exactly how they said it would. I used this card at ATMs all over China (really...all over) with no hassle at all. Charles Schwab never once charged me a fee, and when the foreign banks charged me a on-site fee to use the ATM, I was reimbursed completely. I can't tell you how convenient it is to have access to your money in any city in China. I never had to carry more than 1000 yuan (about $160) on me at any given time, and I was able to pay for everything in cash.

Are there any downsides to the Charles Schwab solution, I hear you asking? Of course, I respond; but they are few and negligible. For one, Charles Schwab does not maintain very many physical offices. In order to deposit money, you need to either transfer electronically from another account or you need to mail them a check to deposit (in postage-paid envelopes that they will provide you). The electronic transfer process is easy, but it does take a few days for the money to become available to you--best not to wait until the day before your trip to do this. The only other very minor drawback to this solution that I can think of is that you are required to open a Charles Schwab investment account to be able to hold a checking account. That sounds a bit scary until you learn that you don't have to keep a minimum balance in it. You can open the account and then leave it completely empty for no charge. It's a bit of an inconvenience, but certainly no reason to overlook all of the great qualities of the checking account.

This card worked perfectly for me. I have no reason to doubt that it won't work for you as well. It truly seems like the ideal solution for a traveler going abroad. So long as you aren't spending all of your time in completely rural areas that don't have ATMs, this could very easily be the best solution for you.

Thus concludes the first official product endorsement of this website. Charles Schwab High Yield Checking Account: I salute you.


Lady AritĂȘ gunĂȘ Akasa said...

Another possibility is credit unions. Many of them are much less fee-ridden than big banks. Mine doesn't have any conversion fees and ATM fees are minimal (or reimbursed if you buy something with your card at least 12 times/month). I used my debit card in Beijing with no problem.

Tracy Chen said...

Hey Frank, nice to meet you. May I have a question re how to use Charles Schwab debit card in China? I'm not able to withdrawal. Appreciate if you could share your experience. Thanks. Tracy

Frank Kasell said...

Hi, Tracy. In my experience, it worked just the same as it did in the USA. Did you try your card anywhere else besides China?

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