Financial Arrangements

Handling your finances abroad

Settle on the amount of money you will need while abroad. Make both weekly and daily budgets and stick to them. Learn the value of the local currency and look for special student rates and discounts. Friends with foreign experience, students who have participated in your particular study abroad program, and evaluations in the OSA Resource Room are excellent sources for advice on spending and saving money while abroad. For conversion tables, consult the foreign exchange listings in a financial newspaper such as the Wall Street Journal or OANDA.com.

The safest way to protect your finances abroad is to diversify them by using an ATM card, debit card, traveler’s checks, and credit cards. Should one form be lost or stolen you will have access to your funds through another form.

Most students access home funds through automated teller machines (ATMs) on the PLUS or CIRRUS network. Since many ATMs abroad will only access a checking account, do not leave your funds in a savings account before departure. Otherwise, ATMs are used the same way they are here: your home checking account is debited for your withdrawal and you draw out local currency. You are charged a service charge and the current exchange rate. Although this way of accessing money is convenient, you are warned not to use it as your only form of getting cash. Be sure to check with your bank at home, to ensure that your PIN is valid abroad and to clarify what sorts of charges will be applied. Likewise, check with your bank if you intend to use a check card to access your bank account. Your bank may wish to note when you will be abroad so your access is not blocked due to suspected fraud.

Credit cards such as Visa, MasterCard and American Express are honored abroad, though not always as widely as in the United States. Credit cards make foreign currency transactions easy and are invaluable in a financial emergency. Take a credit card along, but use it wisely; plastic can be dangerous because it is easy to overspend, service fees and interest charges can be costly, and the loss or theft of a card can inconvenience you, especially while traveling. Seek advice from the issuing company as to the card's applicability abroad and the billing rate for converting the amount of purchases abroad into dollars. Make sure to learn your PIN before departure. Contact your credit card company to find your credit limit and number to call in case your card is lost or stolen. Also let your credit card company know the dates and locations of your travel. When cards normally used in the U.S. suddenly begin being used abroad, some credit card companies will cancel the card to avoid possible fraud and other security issues.

If any of your cards are lost or stolen, you will need to contact your bank and clarify whether it is an ATM, debit, credit, and/or check card. The bank will need the number and possibly, the PIN.

Traveler’s checks (TC) are inconvenient and not used as a major source of funds. However, you may wish to carry some reserve funds as traveler's checks . Most students only use TCs if they have lost their ATM card or cannot access funds through an ATM. TCs must be cashed at banks or a “bureau de change” and may take time to get cashed. Traveler's checks in U.S. dollars can be used in case of an emergency abroad; and if you don’t need them, you can use them as cash when you return. Leave a copy of the serial numbers of your traveler's checks at home; take another list with you separate from the checks themselves. As you cash in the checks, keep a tally of which ones remain unredeemed.

Although it is uncommon, students who stay abroad for a semester or longer may open a bank account abroad. You can discuss this option with your U.S. bank, with a foreign bank upon arrival, or consider an international service such as HTH Worldwide Bank.

The best way to assure yourself of adequate funds is to take more than the proposed budget.

If your money runs out and you have a credit card, you may be able to access funds:

• If you are a Visa cardholder, you can obtain a cash advance directly from an ATM or bank. The daily amount available varies with the exchange rate, but averages $150.
• An American Express office can, on presentation of your card, accept a personal check and issue you up to $1,000 every 21 days for a 1% commission. This amount varies with each office. If you don't have a personal check, American Express can provide a counter check.
• A MasterCard may be used to draw either cash or MasterCard traveler's checks.

If you do not have an ATM card or credit cards to access funds, you have several alternatives, all based on the assumption that someone at home can send you money.

Funds can be transferred or wired from home, but this process is very costly and complicated. Money can also be shuttled from a bank in the U.S. to its branch in a foreign city, if it has one. Banks, however, are notorious for keeping bankers’ hours. One after-hours option is Moneygram (1-800-542-3590), a for-profit money transfer service with 23,000 agents in 103 countries; the service charges $40 to send $500 anywhere (more for larger amounts).

Using the local AMEX Office, you can receive funds in about a day, but high fees may apply. If all else fails, turn to the Bureau of Consular Affairs. After an investigation determines that an American is genuinely stranded, a consular official will seek one of your friends or relatives to help. If no one can be found, an official may advance money, but a “limitation” will be put on your passport, signifying that it is to expire when you reach home and cannot be renewed until the loan is repaid.

Avoid the expense and hassle by bringing the necessary funds, carrying your funds in a variety of forms, and sticking to a budget. If you will be absent during tax season and wish to file a tax return, you should make arrangements by issuing a Power of Attorney (LawDepot) for a person you trust before your departure. Alternatively, you can file for an extension with the IRS on the Web.