RMC Study-Travel Student Handbook

Money Matters

There are several ways to pay for things while you are overseas. Each has its advantages and disadvantages. Research costs and limitations of each option ahead of time. The most common ways to access money while you are overseas are:

  • Cash
  • Credit Cards
  • Debit and ATM Cards
    If possible, have multiple options available to you just in case there is a problem with one form of payment. Be sure to have extra funds in case of emergency (medical treatment, delayed flights, etc). Find out the best method(s) of receiving wired money in your host country, if the need arises.

Cash

  • Depending on where you are, exchanging cash may be the best way to obtain local currency.
  • Research online or check with your instructor since carrying large amounts of cash can be dangerous. Many countries limit the amount of cash you can bring into or take out of the country.
  • Currency exchange rates vary daily, so keep up with exchange rates and know the prevailing rate before you exchange money. You can check exchange rates online:
  • Most places that change money—banks, post offices, independent money changers—charge an exchange fee (this is different from the exchange rate).
  • You may also want to obtain some foreign currency before you leave the U.S., since you may need to pay for incidentals before you can exchange money overseas.
  • Check with your bank to see if customers can order foreign currencies. At Bank of America, for example, customers with checking or savings accounts can order foreign currency online. See https://www.bankofamerica.com/foreign-exchange/foreign-currency-exchange.go for more information.
  • Advantages: Readily accepted most everywhere.
  • Disadvantages: Cannot be replaced if lost or stolen; remaining cash cannot be used in the U.S. without being exchanged for U.S. dollars, which usually requires an exchange fee.

Changing Money

  • U.S. airports usually do not have favorable exchange rates, so it may be preferable to exchange money after you arrive at the airport of your destination overseas.
  • Banks tend to have the best exchange rates, but make sure you understand what rate of commission you are being charged—it may be too high.
  • Try to avoid changing money in places like hotels, restaurants, or shops as the exchange rate is often high.
  • Changing money on the street may be very risky and is illegal in many countries.

Credit Cards

  • Often the easiest way to pay for goods and services overseas is by credit card—especially in Europe—though there may be a relatively high minimum amount for credit card purchases.
  • We strongly suggest that you bring a credit card with you overseas, both for purchases and for emergencies, such as medical services.
  • If you don’t have a credit card in your own name, ask your parents or guardians if you can take a credit card with you that you promise to use only in case of an emergency. Agree to keep it in a sealed envelope that you will only open if necessary (this does not include “needing” to buy one more pair of Italian shoes!).
  • Credit cards can help you secure accommodation, flights, and other services in a hurry in the event of the unexpected.
  • Prior to departure, notify your credit card company of the dates and locations of your travel.
  • They often give the most favorable exchange rates; however, many credit card companies charge a foreign transaction service fee of about 3% of each transaction.
  • In general, Visa, MasterCard, and American Express cards are most widely used overseas—but check which cards are accepted in the countries you will visit.
  • Avoid letting your card out of your sight when dining or making purchases; the number can be skimmed and then used by someone else.
  • Credit card fraud and theft are rampant in some countries.
  • Advantages: Easy to use, widely accepted in some parts of the world (check ahead of time), good for emergencies.
  • Disadvantages: Can be used by someone else if lost or stolen. If lost or stolen, contact your credit card company immediately. May not be accepted in some countries, like Cuba.

Debit and ATM Cards
(retrieved from “ATMs Abroad: What Travelers Need to Know” https://www.smartertravel.com/atms-abroad-travelers-need-know)

  • Best for: Getting cash in local currency.
  • Pros: You’ll get the same great interbank exchange rate when you make cash withdrawals with your debit or ATM card as you do when you make a credit card purchase. With ATMs available in major cities and airports all over the world, this is generally the cheapest and most convenient way to get cash in the local currency.
  • Cons: Each cash withdrawal you make is usually subject to currency conversion fees, foreign ATM fees or other charges from your bank and/or the local bank that maintains the ATM. For more information, see ATMs Abroad (link above). Debit cards work much the same as regular credit cards for purchases, but if your card is lost or stolen you may not have the same protections. By U.S. law, as long as you report your debit card missing within two business days, your maximum liability for use of that card will be $50 — the same as for a credit card. However, if you wait any longer, you could be responsible for hundreds of dollars in unauthorized charges.
  • What You Need to Know: If the ATM card from your home bank isn’t connected to the worldwide Cirrus or PLUS networks, you may want to look into getting a MasterCard or Visa debit card. While they look and can be used like regular charge cards, they actually debit your checking account the same way your ATM card does.
    Finally, don’t forget to call your bank and make it aware of your travel plans; as with credit cards, sudden international activity could cause your account to be frozen.

Using Debit and ATM Cards

  • Make arrangements with your bank or credit union for an ATM card that you can use overseas.
  • Check how much you will be charged each time you withdraw money from abroad. These charges can add up.
  • Make sure that your PIN number has 4 digits and can be used internationally. Be aware that if your pin is longer than 4 digits, some countries will not allow you to make purchases on a debit or credit card (i.e. Belgium).
  • Do not expect ATMs to be accessible 24 hours a day, even if you see a sign saying one is open 24 hours.
  • Only use ATMs that are adjacent to a bank, and use them during the bank’s business hours, that way if the ATM eats your card, the bank can retrieve it for you.
  • Do not expect all ATMs to accept your card; find out before departure where your card is accepted.
  • If you rely on ATMs, you should keep careful track of your balance, since the overseas ATM transaction records often will not show your current balance.
  • Be aware that some countries have a high rate of ATM fraud.
  • Make copies and/or scans of all your bank and credit cards (front and back); keep the copies in a safe place separate from your wallet or purse. If your wallet or purse is lost or stolen, use the information on the copies to cancel your credit cards— the sooner, the better.
  • Advantages: You can obtain local currency as you need it, at a favorable exchange rate.
  • Disadvantage: Requires access to an ATM machine; ATMs and cards can be subject to fraudulent use. May not be accepted in some countries, like Cuba.

Foreign Currency

  • Familiarize yourself with the currency you will be using overseas.
  • Follow the exchange rates for several days or weeks in the newspaper or on the internet; by the time you arrive in your host country you should know how much $1 U.S. equals in the host country currency.

Banking in Your Host Country

  • If you are studying abroad for a semester or a year, many of you may decide to establish a bank account in your host country upon arrival. Using a local bank and debit card makes everyday transactions simple. Do inquire about fees for having an account, which can be high compared to the U.S.
  • Your advisor at your host institution or an office equivalent to the Office of International Education there should be able to guide you through the process.