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Financial Considerations

Traveling to multiple countries means using multiple currencies. You might know that your bank and credit card will probably give you the best exchange rates, but at what cost? When you start exchanging money from one currency to another, you start running into fees.

I hate fees.

Especially fees to perform simple tasks. I’m still carrying around 100 Euros in my wallet because I did not want to pay the ridiculous $10 exchange fee at the JFK airport. 10% to exchange Euros for USD? That is crazy and I won’t do it on principle.

Even for a short trip top Europe or Mexico, you might be surprised to learn that your bank was charging you 3% + $5 or $10 every time you got money out of a foreign ATM and your credit card was taking another 3% on all your charges. It adds up and the next thing you know you have hundreds of dollars in fees. From my research, the worst offenders are the big banks like Bank of America.

You might not know this, but there are better options. For example, Neither E*TRADE, Fidelity or Bank of the Internet charge you any fees to use 3rd party ATMs, even outside the country. They might even refund you the fees the owner of that ATM might charge you (though this fee doesn’t exist in many foreign countries – it is mostly a US thing). Combine this with free checking and 3.3-3.5% interest and you might start questioning whether you should even have a Bank of America, WaMu/Chase or other bank account.

On the credit card side, the universal answer is surprisingly Capital One. Capital One has made a name or itself by offering credit cards to people with less that perfect credit and so Kelly doesn’t like using her new Capital One card, but I like it as not only do they NOT charge a foreign transaction fee, but they actually refund the 1% Visa charges so all transactions are totally free of fees. If you are traveling outside of the country, you can save yourself a lot of money by owning a Capital One credit card.

You can find out more information and a great comparison chart on all these fees here.

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One Response

  1. Interesting post. I use Fidelity, but I need to open up an account with a local bank so I can cash checks.

    It must be fun watching Kelly agonize between between saving money and seeming sketchy. That’s like her “Sophie’s choice”…

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