Lowest Foreign Transaction Fee

In a couple months, my wife and I will be taking an extended vacation to Europe. It’ll be a fantastic trip, one we’ve been looking forward to for months, and with the dollar strengthening and the economy across the world weak, we figured we could take advantage of lower prices to get some traveling done.

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 The Home 

Request USPS Hold Mail Service Online

Did you know that you can request to have your mail held through a form online? I had no idea! This saved me a trip to the post office (and a 15 minute wait in the line that is always there regardless of what time I go).

You can get same day service if you submit it by 2:00 AM CST! The service is limited to certain zip codes but fortunately mine was included. Scratch that one off my list of errands today.

Online services FTW!

Going away for a while? Request Hold Mail for the time you’re gone, and we’ll keep your mail safely at the local Post Office™ until you return. Schedule the service up to 30 days in advance, or by 2AM CST (Mon-Sat) on the start date. Each address can have one Hold Mail scheduled at a time. All mail will be held, rather than an individual’s mail.

One word of warning, you may not be able to use this at some ZIP Codes so check availability first (unfortunately, that means filling out every field in the first box).

USPS Hold Mail Service Form


Notifying Credit Cards of International Travel

My wife and I will be going to England to visit good friends of ours and so after researching the best international credit card, we settled on a Capital One card.

Now came the somewhat mind-numbing task of notifying our cards of international travel so that we wouldn’t get declined. The process for each was pretty straight forward but I’ve listed instructions for all the cards I called up. I imagine they all do pretty much the same thing but it’s always good to get concrete information.

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How to Access International ATMs

20 Pound Sterling NoteMy wife and I still use Bank of America as our primary checking account and I called them the other day to let them know we’d be traveling and how we might be using our debit card abroad. I don’t plan on using it (we have a Capital One card for purchases) but I wanted to ask them about using ATMs abroad.

The past few days I’ve been researching the best way to exchange money, trying to keep the fees low and the accessibility high. I’ve discussed things with my friends over there and the consensus was that ATM was probably the best way. Between ATM access and us simply paying with our 0% transaction fee Capital One card, we should be paying as little in fees as possible.

Global ATM Alliance

It turns out that Bank of America has partnered with a few international banks to form their “Global ATM Alliance.” When we use a Global ATM Alliance ATM, we avoid a $5 access fee. If we use any old ATM, we would be assessed a $5 access fee. Otherwise, ATM transactions incur a 1% transaction fee to cover the exchange of currency.

Here are the partners in the Global ATM Alliance:

  • Barclays (United Kingdom)
  • BNP Paribas (France)
  • China Construction Bank (China)
  • Deutsche Bank: (Germany)
  • Satander Serfin (Mexico)
  • Scotiabank (Canada)
  • Westpac (Australia and New Zealand)

Call Your Bank

If you’re traveling abroad, call your bank to see what your international options are. I should have done this from the start, rather than poke around and waste time researching the best option. One simple phone call would’ve yielded the simple advice of “Try to find a Barclays, you can use their ATMs.” The 1% transaction fee, which covers the currency exchange, is probably the leanest you’ll ever find. You will always have to pay a fee to exchange money and it’s either listed as a fee or integrated into an exchange rate that doesn’t match the prevailing rate (this is how credit cards used to “hide” the currency transaction fee and the reasoning behind the foreign transaction fee lawsuit).

Time to pack for London!

(Photo: funkypancake)


Best International Credit Card

This Thanksgiving, my wife and I will be heading to London, England, to visit good friends of ours who are working there. Given the recent economic unrest, it seems pretty foolish for us to try to play any games involving exchanging money so we’ll try to convert as little as possible directly, instead we’ll resort to using credit cards as much as possible so we orphan (leave in pounds sterling) as little cash as necessary.

When it comes to using credit cards abroad though, it’s gotten a little more complicated than your classic “foreign transaction fees.” It turns out that in addition to the issuers and banks charging you a fee, some merchants will add a “Dynamic Currency Conversion” fee on top of everything else. That can be as high as five percent!

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How To Get Independent Health Insurance

Hospital Vitals MonitorThree years ago my wife, then my girlfriend, quit her job in New Jersey and moved down to Maryland. In doing so, she also gave up her employer sponsored health insurance, which was a big deal.

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Currency Conversion Fee Antitrust Litigation (MDL 1409) Settlement

Did you know that there was an anti-trust case brought against the major credit card issuers regarding foreign transaction fees? For those who aren’t aware of foreign transaction fees, these are fees that some card issues add onto a credit card charge made in a foreign currency. This fee can range anywhere from 1-3%, though some issuers will absorb the fees. These fees are not the cost of converting the currency, which is likely absorbed in the exchange rate used by the credit card company. Well, today these foreign transaction fees are often broken out and detailed on the credit card bill itself (sometimes as a mere asterisk indicating a x% fee was levied for this foreign transaction, sometimes an actual dollar amount) but this wasn’t always the case. In the past, card issuers wouldn’t even mention a transaction fee was levied and buyers would merely see a poor exchange rate.

But the fee itself wasn’t the problem, plaintiffs claimed that the Visa and MasterCard networks, their member banks, and Diners Club conspired to set the fees and conceal them from the public by inflating their exchange rates (essentially hiding the fee in the rate). Which cards are included?

Visa- and MasterCard-branded credit cards (including charge cards) and debit/ATM cards (including stored value and payroll cards), and Diners Club-branded credit cards (including charge cards). The Visa-branded cards include Visa-, Interlink-, and Plus-branded credit and debit/ATM cards; the MasterCard-branded cards include MasterCard-, Cirrus-, and Maestro-branded credit and debit/ATM cards. The lawsuit includes purchases, cash advances, cash withdrawals, and internet transactions.

So, the defendants have now elected to settle and set aside $336M to pay for it all. If you wish to participate in the settlement, what you’ll need to do is choose one of three options. The option you choose will depend on your level of international travel and how much you’ve spent in the years between 1996 and 2006.

  1. Refund Option 1: Request an Easy Refund of $25. This Option is recommended if you traveled outside of the U.S. for less than one week or had foreign transactions of less than $2,500 using your eligible cards during the 1996 to 2006 period. (Green Form); OR
  2. Refund Option 2: Request a Total Estimation Refund based on typical spending during travel and your answers to a few questions about your own travel outside of the U.S. This Option is recommended if you traveled outside of the U.S. for more than one week or had foreign transactions of more than $2,500 using your eligible cards during the 1996 to 2006 period. Refunds will be a maximum of 1% of estimated foreign transactions. (Blue Form); OR
  3. Refund Option 3: Request a refund based on information that you provide concerning your Annual Estimated foreign transactions during the 1996 to 2006 period. This Option is recommended if you had extensive foreign travel or foreign transactions and are willing to provide year-by-year information. Refunds will be a maximum of 1% to 3% of foreign transactions. This is the only Option you can use to get a refund for corporate card use. (Red Form)

I think I’ll probably do Option 1 or perhaps Option 2, since I’ve traveled internationally quite a bit to visit family in Taiwan and on vacations abroad. I have yet to review the claim form to see the level of rigor involved but it seems relatively straightforward.

The deadline to file this has been extended to May 30, 2008.

(Thanks Tim!)


Cash, Cheques, or Credit When Traveling Internationally

After my recent trip to China, thoughts of how I should’ve best converted by hard earned US dollars into Chinese RMB were still in my mind and so I scoured the internet in preparation for my next trip out of the country, whenever it may be. The problem is quite simple, how do you get the most USD into the local currency without paying through the nose in fees, getting ripped off in the rate, or converting too much (in trying to save money) that I find myself blowing it on stupid trinkets in the airport on the way out? The answers essentially boil into four possible choices but in the ever changing environment of money, before making any decisions for yourself, verify that the fees I’ve listed are still current though the essential ideas will likely remain the same.

Credit Cards
Credit cards are usually the best option because the currency conversion is usually at the wholesale rate, not the retail rate you’d be expected to pay if you chose to exchange money at the airport, hotel, or bank. The credit cards also offer the same level of security internationally as you would expect domestically. The downsides are that some card issues will charge you a currency conversion fee as high as 3%, I tracked down a list of credit card currency conversion fees a few days ago – tops on the list was Capital One that had no fee.

Not everywhere takes credit card so your next best option is to withdraw cash from a local ATM. You get the benefit of exchanging money at the wholesale rate with the flexibility of using the local currency, the only downside is that you’ll probably be socked with an ATM fee (experts estimate a flat fee would be around $1-$5 where a percentage wuld be 1-2%), one that’s larger than the typical fee you may see in the US. Other tips, cleaned from a dated MSNBC article, include changing your PIN to something that’s only four numbers (a common limit internationally), and making sure you can find a PLUS (for VISA) and/or Cirrus (for MasterCard) ATM where you’re going.

Traveler’s Cheques
Like cash with some added security features, cheques are expensive options and only available on a limited basis. For the purposes of this article I only looked at American Express Traveler’s Cheques which seemed like a good option only if you didn’t have a credit card and didn’t trust yourself with cash. AMEX offers traveler’s cheques in foreign currencies but there is usually fee associated with purchasing them, $15 if you order them online (fee waived for Gold Card and Platinum Card holders) plus shipping and handling. As for the use of them, you may find it difficult to use cheques, especially at small local shops that won’t recognize them, and converting them at a local bank into currency may come with a small fee as well. For the added security, you sure get nickel and dimed all the way to your purchase. (AMEX Traveler’s Cheque FAQ)

Exchanging Cash
This is probably the worst option (though next to AMEX Cheques depending on how much) because your exchange rate will be retail, which is always going to be more expensive that wholesale. Also, no matter where you go to do the exchange, the exchanger is going to want to take a little piece and put it into his or her pocket. Banks and hotels are usually your best options, they will typically offer the best rates but keep yourself aware of the rates every day so you can tell if you’re getting ripped off. Also ask if there is a currency conversion fee associated with the conversion, sometimes there is and it’s not listed on the board.

Ultimately though, remember that we’re talking a couple percentage point differences between each of the options so ultimately it might not matter terribly, it’s just good to know where all the options stands in case you are put to a decision on the spot. Should you pull out a credit card or use the cash you have? Should you hit up an ATM or convert some money from USD at the airport? The differences will be minimal but that doesn’t mean you shouldn’t be smart about it.

If you have any tips you want to share about spending money internationally, please do share! I don’t do a lot of international travel so my experience is limited, I’d really like to here some seasoned travelers share their best tricks. Thanks!

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