Personal Finance Abroad

by Brint

Do research well ahead of time

We spent about much of the early part of this year researching credit card options. We were looking for options that included no foreign transaction fees (which is huge when you're making multiple purchases a day for 1.5 months), and some form of cash back rewards. We don't do travel rewards since we're generally not huge travelers. Cash back helps almost immediately, so that's the decision we made.

If you travel a ton, a miles reward card may better fit your other rewards programs. My personal sentiment is that the benefits are harder to realize with milage cards since you can only spend them on plane tickets, hotels, and rental cars. I don't feel we travel enough for that type of card to really work for us. If I end up living out of my suitcase for work at some point, I'll go back and do the math to see where it puts us.

Annual fee doesn't mean avoid it

Everything with any form of finance is just a big math problem. If you know how you spend, how you want to spend with the card, and what the other benefits are, an annual fee may be okay. We do have an Blue Cash Preferred from American Express that I think comes out to $75/year in fees. The way we did the math was it pays us back 6% for groceries (up to $6,000) and 3% for gas. We spent about $6,000 at grocery stores this year, so we did get $360 back. If we subtract the $75/yr fee, that comes out to $285 cash back. Compare that to our 1.5% card, we only would have gotten back $90 for the same activity. For how we use it (gas & groceries), the annual fee on the AMEX passes the math test.

There are other things you can get through the card including things like very cheap rental car insurance that costs nothing unless you actually rent a car. I consider these minor benefits that wouldn't sway my purchasing decision. Depending on your circumstances, these additional benefits may be a part of your math problem.

The AMEX in this example does have foreign transaction fees, so we're not using it internationally, this is just an example of why it's worth looking into cards with an annual fee. It may more than pay for itself.

Get your card well in advance of the trip

When you find the card that fits your needs, get it ASAP (at least 6+ months ahead), don't wait until a few weeks before your trip. This will allow you to build a credit history with the company to display spending habits, and it'll also allow you to potentially bump your credit limit on the card. This will make life easier for any potential big spending items, such as if there are billing issues with hotels or other things that may cost thousands of dollars. An additional bonus with this approach is the increased credit limit will improve your credit score.

If you are turned down for a credit limit increase, call in. We were denied with our Quicksilver card, and calling in turned into a "re-evaluation" and within a week, a credit limit increase.

Notify all banks that you're traveling

Some banks and credit card companies do not require this (ie. American Express), however I recommend doing this anyways. Even when you notify a bank, don't be surprised if their automatic fraud prevention systems still shut you down. I had Wells Fargo shut down all my cards in Scotland a few years back for "suspicious charges." They had a note that I was traveling, but cut me off anyways. After three phone calls and about an hour of back-and-forth, I got them turned back on.

Getting cards turned back on can be tricky

Depending on the bank or credit card issuer, it can be tough to turn cards back on. I recommend taking multiple cards, but only using one card at a time. This does a few things:

  • If the card is stolen/cloned, you only have to shut off that one card.
  • If the card is suddenly shut off, you can roll to a secondary card.

To finish the idea of "tough to turn cards back on," with Wells Fargo, they asked for the exact dollar amount of my last deposit. I didn't have data where I was at on my cell phone, so I couldn't easily look that up, and I sure as heck didn't have that number committed to memory. I could provide every other piece of personally identifiable information they could want, but not that. I had enough personal information to open a new account, but that wasn't enough to turn the card back on. I eventually ended up with a sympathetic operator who accepted that I was who I said I was and flipped the bit to get me back online.

What to carry

We only carry copies of our passports, visas, and a single credit card when going about. If we get robbed, or lose something in the course of corralling the baby, we're only out copies of our documents and a single card. We can cancel that one card, and move onto the next. The other cards are stored in a safe in the hotel room generally. The less we carry, the less risk we take. Getting stuck without a way to pay for things would be a terrible problem, and I don't want to have to go through getting cards replaced in another hemisphere.

Our primary card of choice

For this trip, we're using the Quicksilver card from Capital One. It's the one that has the Samuel L. Jackson commercials. It's 1.5% cash back on all purchases, no annual fee, plus no foreign transaction fees. That's a big swing in terms of our pocket book, and it will save us a few hundred on this trip alone.

The Samuel L. Jackson commercials had nothing to do with us getting the card. We used credit card comparison tools through Mint, Credit Karma, CreditCards.com, as well as through individual banks to compare cards available that fit what we needed. Since the 1.5% cash back is greater than the base 1% we get on our AMEX, we use the Quicksilver card for every purchase that isn't gas or groceries.

Keeping track of your accounts

We've been using Mint for about as long as it's been around. I've looked at other options as they've come along, but for what we're looking for Mint has fit the bill.

If you're not keeping track of all of your accounts in one place, you should! As an example, just a few weeks before leaving, I noticed a $400 come out of nowhere on one of our Visa cards that we very rarely use. Since it's not used frequently, I typically don't check for balances. Since Mint gives you all of your accounts in a single pane of glass, I was able to quickly see the transaction, determine it was fraudulent, and immediately contact the bank to kill the card. This was a card I had used at Home Depot earlier this year. The charge was for a $400 gift card at a Best Buy in San Francisco. I have never been to San Francisco.

We try to check in through Mint every couple days to make sure we stay on top of things like this.

Paying Bills abroad

We have auto bill pay setup for internet, cable, and credit cards. We receive e-bills for all utilities. So for water and electricity, we just pay online when we get the email.

We were already paperless for our bills before leaving since we always forget to check the mail anyways.

Disable Unused services while gone

We scheduled our DirecTV service to be disabled while we are out of the country. We cannot consume any services online, so we may as well save $100+ bucks! The cool thing is they are setup to have your service scheduled for suspension, and it will automatically turn on for the date you specify. You do need to call in to set this up though.

We kept some other services enabled like NetFlix, and we've actually used it a few times here already. Take a look at your recurring charges to see what you can cut.

Mistakes so far

I have used our Wells Fargo debit card once to pull cash, and I was hit with a $5 ATM fee. You can make cash withdrawls using the Quicksilver card, however, I forgot the PIN.

We should have canceled our YMCA membership while gone. That would save ~$59/month. I thought about it, but just never got around to doing it. Even if we had to pay the application fee to turn it back on, we'd still come out ahead.

We've only been here two weeks so far, I'm sure we'll make a few other mistakes that we'll share as well.