INTERNATIONAL EDUCATION OFFICE

Using Money Overseas

Traveling Cheaply

Most of us have to refrain from spending very much money when going abroad, but it would be a mistake to travel in the cheapest way possible. This could mean putting yourself at risk, and you might end up paying a high price on your health or state of mind. Instead, try to get the most for your money while accomplishing your goals for the trip and having a great time. Some of the ways to save money are:

• Find a low-priced airline ticket
• Go with a group such as a package deal or a tour
• Get discounts with an International Student Identity Card (ISIC)
• Stay in youth hostels or other inexpensive accommodations
• Eat in pubs, local eateries or fast food restaurants
• Most importantly: develop a reasonable budget and stick to it.

Taking Money Abroad

Most often, students take travelers' checks. Travelers’ checks are the safest way to carry money abroad as they can be replaced if lost or stolen. They are useful for emergency backup in case the bank machines are down or there is no other way to access cash. It is best to buy them in the U.S., then exchange them for currency abroad. Disadvantages are that you may be charged a fee when you cash them, not all stores or hotels accept them as a form of payment, and some banks in developing countries will not accept them. Travelers' checks come with receipts, which should be stored in a safe place, separate from the checks themselves, so that you can replace the checks if lost or stolen. The most widely accepted brand (and easiest to replace) is American Express. AAA, some banks, and some credit unions issue them with no fee to members.

Purchasing local currency when you arrive, at least enough for phone calls and taxi from the airport, is a wise idea. This can be done at major banks or in currency exchange offices at international airports. Consider purchasing at least $100 in local currency before you leave the U.S. in case you cannot exchange money right away. Carry cash in a safe place on your body, such as in a money belt or a pouch around your neck, hidden under your clothes.

Students spending a semester or more abroad will be able to set up a bank account in a local bank after arriving at their destinations. Travelers' checks will be accepted when opening an account. Most students do not open bank accounts as they take time to open, may incur fees, and may be difficult to close if still active upon departure. However, opening an account will allow you to obtain a local ATM card and not have to worry about locking up large amounts of money. You can choose a local bank or a branch of a U.S.-based bank. Some banks will require a letter of recommendation from your home bank in the U.S. There are usually large fees for transferring money. Be prepared for a 4-to 6-week waiting period while they activate your account.

Credit cards, especially Visa and MasterCard, are widely accepted in most countries and are highly recommended in case of emergencies. Credit cards are convenient, reduce the amount of cash you need to carry, and automatically give you a good exchange rate. However, the interest rates may be high if you don’t pay off your card every month, they are subject to theft, it is easy to spend money you don’t really have, and they can become de-magnetized. You can access cash from your credit card (you will need to know your international PIN if using an ATM to do this) but the interest rates are extreme, so avoid this option if possible. Write down the phone number to call in case the card is stolen, and store it separately from the card. If the card goes missing, call immediately so you will not be charged for items you did not purchase.

ATM cards and debit cards are very convenient abroad. Find out from your bank: your international PIN for abroad (some are 4 digits, some 6), if your card is connected to a world-wide system (Cirrus, Plus), if fees are charged for using a foreign ATM, and your daily withdrawal limit (some banks will raise it if you ask).

Also, make sure you call your bank to let them know you will be using your debit/credit card abroad. Many banks put an automatic block on foreign cash withdrawals or purchases for security reasons. Watch for thieves when using an ATM and do not use an ATM after dark, if possible.

You can find VISA, MasterCard and Cirrus ATM machines abroad via the Internet. Though American Express doesn't have an online ATM locator, cardholders can call 800-227-4669 in the U.S. or 910-333-3211 collect from abroad for locations.

Personal checks drawn on a U.S. bank will NOT be accepted abroad.

Transferring money from the US is possible to do between accounts at most major banks, but it is expensive and may take a few days.

If money is needed right away, you can instantly wire money through an agency such as Western Union, American Express, or Moneygram. The fees are high, usually 10% of the total amount being wired, and money can be picked up only at certain locations in major cities. You may need to show a passport for identification when picking up money that has been wired to you.

Exchanging Currency

Plan to have some local currency with you on your arrival for phone calls and taxi fare. You can exchange currency at international airports, or you can plan ahead and exchange a small amount of money at your local bank before your departure.

Exchange rates vary from day to day and from source to source. Rates in the U.S. are typically worse than abroad, so do most of your exchanges after you arrive. Shop around, but don't waste too much time on it. In general, the exchange at the airport and at banks in large cities will have the best rates.

It is a good idea to check the exchange rates for various currencies before you go abroad.

Coins won't be exchanged, so spend them before you leave the country.

Tipping

Tipping is not customary in every country. In some countries, it is rude to tip but in others it is rude not to leave some extra payment for the server, so be sure you look up the customs in a guidebook before you go.