So, I was going through my wallet trying to figure out why it’s so thick when I know there’s not any cash in it… After pulling out 2 insurance cards from a company I no longer work for, 2 Bubble Tea punch cards, and a bunch of crumpled bills, I came across an expired Capital One credit card.
Huh, that’s weird… Why did we get a Capital One card?
As a matter of fact, I just remember that I got a new one in the mail not long ago, still sitting pretty in its envelope on my desk.
Then I remember that years ago during our trip to Europe, we learned that Capital One was pretty much the only credit card that did not have foreign transaction fee. After the trip, the card was forgotten.
I’m so annoyed thinking that in subsequent trips abroad we had used our Etrade and Bank of America cards that charge 1-3% fee even though we actually had, in our possession at that time, a card that has zero foreign transaction fee card.
Aaargh! I feel so stupid!
But anyway, the incident reminded us that it’s time to do some research about how we’re going to manage our finance abroad for our upcoming round the world trip. We need to find…
A debit and a credit card with 0% ATM Fee and 0% Foreign Transaction Fee
We probably will need both a credit card and a regular debit/check card. But whenever we can, we prefer to use credit cards over checking/debit cards.
Even though both have similar customer protection clause in the case of unauthorized use, if someone goes on a spending spree with our credit card, at least our ‘real’ fund would still be untouched and accessible.
Yes, your bank will reimburse you in cases of un-authorized use of your debit card. But when? Who knows.
From our research, if you’re a US resident, some of your better options are for RTW friendly bank accounts are:
Charles Schwabb High Yield Investor Checking Account
ATM Fee: 0 (Worldwide)
Only recently I’ve heard of this particular account which promises “The freedom to use any ATM, anywhere”
This RTW-friendly card refunds any fee often charged when using other banks’ ATM machines. It has no monthly fee, or minimum balance either.
What’s the catch?
Surprisingly not much if you’re a US resident. When you open this checking account, you also need to open a Schwab One brokerage account which also has no monthly fee and no minimum balance.
BUT, if you’re not a US resident you’ll be directed instead to an international brokerage account that requires you to send them hard copies of your immigration documents, including a copy of your passport and a minimum of $25000 to fund the account.
But like I said above, for a US resident, this account might be exactly what you need for your RTW trip.
Foreign Transaction Fee: 0%
Apparently Schwab also does not charge any foreign transaction fee. Isn’t this great! However, Charles Schwab does not offer credit cards, so you’ll have to get your travel credit card somewhere else.
And guess who offers credit card with 0% foreign transaction fee?
ATM Fee: 0 (up to $10 per month)
Capital One does not charge a fee for using other banks’ ATM’s. And as Katie (from katiegoingglobal.com) pointed out, they reimburse ATM fee up to $10 per month). See the comparison of their checking accounts here.
Foreign Transaction Fee: 0%
Until Schwab joined the playing field, Capital One was the only major bank charging 0% transaction fee. There has been some debate on whether or not they absorb the 1% charge that VISA/MC charges, or simply pass it on to you in the form of higher conversion rate. Calling their representative seems to confirm that they simply absorb the fee as opposed to passing it on. So yay for that!
A Table Is Worth A Thousand Words
Here’s a table that summarizes everything above:
Coming Up Next
We just opened a Schwab checking account and will be testing its ATM refund guarantee during our upcoming trip to Indonesia. We’re also going to use our new Capital One credit card there and compare the conversion rate after we get back.
Hopefully, they’ll both perform as good as promised, then we’ll be set — bank wise — for our RTW trip. Yay!
For a very informative reading about ATM Cards and Fees while traveling: click here
Disclaimer: Unfortunately, none of these banks offer me any money for me to write this post.