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4 Ways On How To Access Your Money Overseas (Cheaper Than PayPal)

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how to access your money overseasLast year, while traveling overseas, I lost my U.S. debit card.

It was a silly mistake, but the timing couldn’t have been worse: I was flying from Australia to Indonesia, and wouldn’t be returning to home to the United States for a few more months.

Fortunately, my travel partner was able to lend me some money while we were in Indonesia. But what was I going to do for the rest of my trip? I hadn’t brought along any back-up credit cards. I didn’t have any cash hidden in my suitcase.

All I had was a debit card for my new Australian bank account – which didn’t have any money in it yet. My first attempts to solve the problem were a nightmare. My U.S. bank wouldn’t mail me a new debit card overseas.

I tried to explain the situation, but the best they could do was mail a card to a friend’s address in Australia – and only if I personally stood in front of the address and took a picture of myself holding up my American ID.

Finally I hit on a solution – I could transfer money into my Paypal account, and then use Google Wallet to pay for things on my phone, just like I could with a debit card.

Problem solved, I thought. Except that transferring money to PayPal was so slow. Even though I’d had it linked to my bank account for years, I couldn’t debit from that account automatically.

I had to transfer the funds to PayPal manually and wait five business days for them to clear.

Surely, I thought, in this world of instant transfers and online banking, there must be a better option. I’d used Square Cash and Venmo before: both of them are faster and cheaper than Paypal, but neither of them work internationally.

We’re there any platforms that could transfer money from my U.S. account to my Australian account without charging exorbitant fees? It turns out there are several. Here are a few of the fastest, cheapest, and most innovative options available.

1. Xoom

Let’s start with the most familiar. Xoom is “a PayPal service,” so it’s got the broadest name recognition and reach of any of the options below. It’s available in 63 countries, and you can pick up cash in two of them – Mexico and the Philippines.

The cheapest option is a transfer between two bank accounts, and in some cases, Xoom is the fastest service out there.

Many countries are eligible for same-day transfers and these can take place within minutes – that’s nearly as fast as doing a domestic transfer via Square or Venmo. You can expect your first transfer to take around two business days.

However, make sure you get your account set up before leaving home. When I tried to connect my bank accounts while traveling abroad, I didn’t have the required documentation with me.

On the one hand, it’s reassuring that Xoom won’t transfer my money to anyone who sends them a photocopy of my passport. But, I found their customer service department a bit heavy-handed when I tried to explain the situation to them.

They weren’t clear on exactly what documentation I could use to prove my identity, and it took them several days to respond to my (increasingly frantic) e-mails. I’d rather rely on a company that “gets” what it’s like to be a semi-nomadic, globetrotting millennial.

If you do choose to use Xoom as an option, be aware that their transfer fees tend to be a bit on the high end for these kinds of services.

You can fund your transfer with a bank account (the cheapest option) or a debit or credit card; but expect to pay a 1% to 3% percent markup on the exchange rate in addition to a fee for each transfer.

That fee ranges from a maximum of $4.99 for bank account transfers and up to $149 for credit or debit card transfers. The most you can send in a single transfer is $2,999 and the minimum is $10.

If you plan to be making the same transfer regularly (say, paying rent each money while living abroad), you can use the “quick send” option to duplicate a frequent transfer.

Great for: One-time transfers; migrant workers sending remittances overseas

2. Neobanks

Let’s say you don’t have – or don’t want – an overseas bank account to transfer money to. You just want a domestic bank account that won’t charge you fees to use your debit card overseas or withdraw money from an ATM while traveling.

Luckily, that’s an option too. A new wave of online-only banks called “neobanks” are cutting costs by doing away with physical branches and relying on smartphone apps to handle most transactions.

You can send and receive money online, deposit checks via smartphone, and even mail a check from your phone (no need to carry around a physical checkbook!)

The most well-known of these in the U.S. is Simple Bank. It got a lot of positive attention for its innovative smartphone app, which allows you to set budget goals and create protected savings accounts, and for fee-free ATM withdrawals in the Allpoint ATM network.

Other online-only banks include Chime and Varo (in the U.S.) and Monzo (in the U.K.).

All of these banks offer fee-free checking accounts with no foreign transaction fees, so it’s a great solution for people who travel frequently and don’t want to deal with the hassle of carrying around multiple debit cards, or cash in multiple currencies.

What are foreign transactions fees? When you purchase something overseas using your U.S. debit card, you’ll be charged a percentage of the total purchase amount, generally 1% – 3%.

The fee varies depending on your bank and your debit or credit card issuer. Some banks simply pass on the fee from Visa or Mastercard without any additional costs; some tack on a fee of their own; and some absorb the cost altogether.

While it may not seem like much, these fees can add up over the cost of a trip – particularly since they often don’t show up on your bank statement until a few days after the purchase.

You might wake up to see a string of $1 and $2 fees for all of the times you swiped your debit card the night before. If you’re purchasing big-ticket items, those fees will be even higher.

With Chime and Monzo’s debit cards, you don’t need to choose between paying high fees and carrying around wads of cash.

You can use your debit card just like you would at home and pay the current exchange rate, without any added bank fees. (You may, however, still see a charge from Visa, Mastercard, or whichever credit card processor handles the transaction.)

Monzo also lets you withdraw up to £200 per month at foreign ATMs for free, before charging a 3% fee on withdrawals beyond that.

This means that every time you get to a new country, you can withdraw enough funds to have some cash on hand, and pay for everything else with your debit card. No need to stop at the currency exchange.

You don’t have to worry about having your card declined while traveling either. While it’s a good idea to let your bank know when you’ll be abroad, sometimes trips happen spontaneously and you don’t always know how long you’ll be in a new country.

Monzo will let you know the current exchange rate and keep track of how much you spend in each country. If you lose your card, there’s an option in the app to immediately report it as lost or stolen.

Both banks offer a few other perks as well. If you get paid via direct deposit, Chime will give you access to the money two days early.

It also has an “automatic savings” feature that will take the spare change from any debit transactions and put them into a separate savings account. (If your purchase is $2.50, for example, that extra .50 will go into your savings account).

Chime’s smartphone app has built-in transfer options for paying friends or splitting a bill or rent.

You can also link your account to Google Pay, Apple Pay, and other mobile payment platforms so that if you lose or forget your debit card (like me!), you still have access to your money.

What’s especially great about neobanks is how transparent they are about their inner workings. When Monzo realized that absorbing all foreign ATM fees wasn’t sustainable, they asked their customers to vote on what fee structure they preferred.

When they missed a deadline for a new feature, they pulled back the curtain on SEPA, the system that allows banks to process international transfers in Europe, so customers could understand why the feature was delayed.

It’s a big change from the traditional banking industry, which seems to thrive on secrecy and hidden transfer fees.

Instead of letting you wonder why it takes so long (and costs so much) for your money to get from one place to another, neobanks like these are showing us how it all works.

They’re finding ways to streamline outdated systems and eliminate expenses, while being transparent about the fees they can’t shake off.

Great for: International travelers who primarily live and work in the same country

3. Revolut

Neobanks are great for frequent travelers, but they still have some limitations if you want to transfer money between accounts. If you live in one country and work in another, or are a student living abroad, you may want to consider opening a borderless account.

These accounts let you hold money in multiple currencies, and easily transfer money between them. So, if you get paid in one currency and pay rent in another, you never have to worry about waiting for your funds to clear.

You can get paid in U.S. dollars and spend it abroad, all without having to calculate how much money to transfer between multiple bank accounts.

The most well-known borderless bank account is TransferWise, although other options, such as Revolut, are becoming more popular too.

While not an actual bank, Revolut provides you with a virtual checking account in both Europe and the U.S., and allows you to make transfers in up to 25 currencies.

You can use it solely to transfer money between accounts, or to maintain a balance in one or more currencies. If your balance in the currency you are spending in is low, Revolut will automatically convert the funds from one of your other currencies at the mid-market exchange rate.

Revolut offers a free plan, or a Premium account that costs £6.99/month and includes a debit card that you can use internationally. You can withdraw £200/month on the free plan and up to £400/month on the Premium plan from overseas ATMs at no additional charge.

There are a few hidden fees to keep in mind when using Revolut. First, while Revolut exchanges your currency at the interbank (FX) rate, it marks up its prices from .5% to 1.5% on weekends — so, convert your money during the week to get the best deal.

Likewise, if you need to move money between accounts, do it with time to spare. Interbank transfers take two business days, unless you have a Premium account or want to to pay an extra fee to “turbo-boost” it, in which case the transfer will happen immediately.

You can also transfer money to other Revolut users via Whatsapp or SMS.

Prefer to exchange money in cryptocurrency? As of 2017, Revolut supports transfers to and from Bitcoin, Litecoin, and other cryptocurrencies at a 1.5% transaction fee.

They’ve also introduced a new peer-to-peer lending service (currently only for U.K. users), so if you run low on funds while you’re traveling, you can apply for a loan directly on the app. And, the Premium account comes with overseas medical insurance!

That’s a lot for one company to offer – and, admittedly, the reviews say that customer support can be a bit lacking. But if you want to give it a try, get in the queue: there are currently around 80,000 people on the waiting list, so clearly there’s a lot of demand for what they offer!

Great for: extended trips abroad; international students

4. TransferWise

TransferWise doesn’t have the same services as Revolut, but it offers one of the fastest and cheapest borderless accounts out there.

It’s how I finally managed to get access to my funds again after losing my debit card in Australia – I simply sent money to myself from one bank account to another using TransferWise.

TransferWise claims to be up to 8 times cheaper than other exchange services by offering the mid-market exchange rate. There are no hidden fees or markups, and you’ll see exactly how much money you’ll be sending and receiving by using the calculator built into the app.

For example, if you want to send $1,000 USD to Australia based on today’s exchange rate, the recipient will get $1,418.70 and the total transfer fee will be $7.21 USD (.72%).

That’s a savings of $69.81 USD, according to TransferWise, compared to costs on other platforms. PayPal and Western Union, for example, would charge a $5 fee and offer a lower exchange rate, costing $30-40 more for the same transaction.

It may take a few days for your first transfer to go through, but the TransferWise app will notify you every step of the way.

I got a message letting me know when TransferWise had “received” the money from my U.S. bank account, when it had “converted” the money, and when it was paying the money out to my Australian account.

Now that I have my accounts set up, I can transfer money between them even faster. Often, the money arrives in my account within a matter of hours, with no additional fee.

As with Monzo, TransferWise is transparent about how quickly you can expect your money to arrive, based on the processing times in various countries.

In order to cut down on the time it takes to process transactions, they money you send via TransferWise doesn’t actually cross borders.

TransferWise maintains a pool of money in multiple countries, and simply “matches” the money being sent in one direction to money being set in another.

Just as with Revolut, you can order a TransferWise debit card for use overseas. (Currently, it’s only available for E.U. and U.K. residents, but there’s a waitlist for customers in the U.S.) ATM withdrawals are free for up to $250 USD per month, and 2% after that.

TransferWise also offers options for businesses, so if you’re a freelancer working remotely or a location-independent digital nomad, you can send invoices to clients all over the world.

You can get your own bank details (routing and account numbers) in five currencies — USD, AUD, NZD, GDP, and Euro – so clients can pay you as easily as they would pay a local contractor. Or, you can receive payments from e-commerce platforms like Amazon and Stripe.

So if you’re thinking of teaching English in Thailand or working from your laptop in Bali, be sure to set up a borderless account before you leave home.

That way, no matter what currency you get paid in, you’ll be able to access your money at the lowest rates and never have to worry about running out of bahts or rupiah.

Great for: Students and freelancers who live and work in multiple countries

Final Thoughts

Losing my debit card while traveling was a stressful experience, but it opened my eyes to how many options are out there for accessing and exchanging money abroad.

Banking networks are more interconnected than ever before, and sending money to friends overseas can be as cheap and as easy as using Venmo or Square at home.

Now I plan to keep money in a few different accounts and never leave home without more than one debit card. I’m still waiting for my replacement card to come in the mail – but with all of these other options? I haven’t even missed it.

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One Response

  1. Jeremiah Chlumsky Feb 20, 2019

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