Information for All Students Traveling Abroad
Money and Banking
You may want to exchange about $100.00 prior to departure to have cash on hand when you arrive at your destination. American currency can be exchanged for foreign currency at most international airports and major banks (and at most major railroad stations). In general, it is wise to exchange money at banks and not at hotels, restaurants, or retail shops, where the exchange rates are unfavorable. Banks abroad afford you the fairest exchange rate available, but you can expect to pay a commission every time you exchange currency.
In some countries, the commission is based on a percentage of the amount you exchange, while in others there is a fl at fee regardless of the transaction amount. Often, you can use your ATM card to withdraw money and avoid a commission charge, although your bank may charge you a withdrawal fee. Current currency exchange rates can be found at oanda.com/convert/classic or www.xe.com. Currency converter apps for your Blackberry, Android, iPhone, or Windows mobile device are available on the Oanda website or you can use the XE Mobile Currency Site.
The safest way to protect your finances while abroad is to use an ATM card, and a credit card. Carrying large amounts of cash is not recommended.
Credit cards make foreign currency transactions easy and are invaluable in financial emergencies. Do take a credit card along, but use it wisely; plastic can be dangerous because overspending is so easy. Interest charges can be costly, and the loss or theft of a card abroad is a serious inconvenience. Not all merchants abroad accept credit cards, regardless of the name brand. Visa and MasterCard tend to be more widely accepted than American Express. Some banks charge fees for overseas credit card use. Make sure you fi nd out what your bank’s credit card and/or debit card policies are before you depart.
Most ATM machines accept foreign cards (check for the Cirrus or the Plus logo). If you have an account with Bank of America, you can avoid cash withdrawal charges by using the machines at partner banks. If you have a six-digit PIN for your debit and/or credit card, you may need to reset your PIN to four digits as ATMs in some countries do not accept more than four digits.
Before you leave the U.S., make sure your bank and credit card companies know about your travel plans. Sudden changes in your account activity, such as frequent withdrawals in a foreign country, can trigger a fraud alert and cause your bank to freeze your account. You should also make a list of international contact numbers for your fi nancial institutions, as well as your account, credit card, and ATM card numbers. Keep this information in a safe location in case any of your cards is stolen.
The amount charged to your credit card bill is based on the exchange rate on the day that your bank or credit card company processes the transaction. Do not forget to pay your credit card bill on time! Request an electronic statement, pre-pay, or arrange for payments directly from your bank account.
Carrying travelers’ checks is the safest way to carry money because they can be refunded if lost or stolen. With the widespread availability of ATMs, however, travelers’ checks are often inconvenient to use and, increasingly, are not used as a source of funds while traveling abroad. Still, you may wish to carry some travelers’ checks in case you cannot access funds through an ATM. If you do not use them abroad, you can use them as cash when you return to the U.S.
Opening a Bank Account
If you are studying abroad for the academic year, you may want to open a bank account to avoid ATM withdrawal fees. After arrival, you can become acquainted with the various banks and fi nd the branch office most convenient for your use. If you already have the exact address of a convenient location, you may want to open an account before you arrive.
The overall cost of living abroad can sometimes be higher than at home in part because you are in an unfamiliar environment making transactions with unfamiliar currency. Depending on your location, you may also be confronted with an almost endless array of entertainment possibilities and attractions.
A go-slow approach to spending makes sense. Little is more dismaying than running out of funds overseas with no easy or quick means of replenishment. You may want to review evaluations in the OIP office; they include estimated costs that students experienced while abroad. Keep in mind that costs can vary based on individual expectations, location, number of weeks abroad, and time of year.
General principles include the following:
- Make both weekly and daily budgets and stick to them.
- Learn the value of the money in relation to the US$ (or another currency you know well) wherever you are and as quickly as possible.
- Be alert to special student rates and discounts and know what discounts are available if you have an International Student Identifi cation Card.
- Take advantage of less expensive alternatives whenever possible. Cook for yourself (especially breakfasts) when possible.
- Shop at street markets or major chain supermarkets and avoid specialty shops and convenience stores (which often add a 20-30% mark-up). Put off making major purchases until you have learned the range of available selections and prices—or learned that you do not need an expensive item.
- When you travel, stay in hostels or in modest bed-and-breakfast accommodations instead of hotels.
- Sales taxes, as Americans know them, generally do not exist in other countries. But many now impose a Value-Added-Tax (VAT) on certain goods (not services), especially more expensive ones. As a visitor, you can reclaim the amount you have spent on the VAT at the international airport when you leave the country. You will need to show all your receipts and your purchases to claim this refund.