It can be difficult to manage your finances when traveling overseas. Not only do your bills still need to be paid, spending money using local currency can cost you a lot more than you think. Consider these 5 tips to minimize fees and manage your finances while traveling:
- Make sure your bills are scheduled to be paid before you leave. This is a crucial must-do. In order to avoid late charges, make sure that all of your bills have been paid or scheduled to be paid automatically on a future date. Use your checking account online billpay schedule your payments ahead of time. In addition, if you have Internet access, you can continue to pay your bills and manage finances when abroad through online and mobile banking. This simplifies the process and helps you avoid confusion and uncertainty.
- Tell your bank or credit union that you will be overseas. If your spending patterns are unfamiliar, your bank may suspect fraud and freeze your account. So before leaving the country, call your bank to notify them of when and where you will be traveling to. Also, keep their international number in case you lose your debit or credit card during your trip.
- Always have foreign currency on you. Carrying a moderate amount of cash while traveling is always a good idea. For example, there may be restaurants and businesses that do not accept credit or debit cards. There are many places around the world where cash is essential, and travelers cheques are outdated. It is convenient for small purchases and can help you avoid exorbitant currency exchange fees.
- When possible, use debit cards to reduce foreign currency fees. Because the currency exchange fluctuates so often, merchants tend to use rough estimates to predict the price. This can lead to you paying more than necessary. When paying with a debit card, the card issuer will use the exact exchange rate. And although there may be foreign transaction fees of 1% – 3%, that’s often cheaper than purchasing actual currency.
- Maximize the amount withdrawn from ATMs. Once abroad, you may encounter ATM fees from the foreign bank’s ATM and your home bank for using a foreign ATM. By reducing the amount of times you visit an ATM, you are able to minimize the withdrawal fees.
Being knowledgeable when it comes to bank fees will save you a lot of money. Since you earned it, you should be able to use as much of it as possible.
Have you ever been charged a fee for withdrawing money from your savings or money market account? This might be due to Regulation D, a Federal Reserve Board regulation that limits the number of transfers from a savings account or money market account. This regulation was put in place by the Board of Governors of the Federal Reserve System to make sure that banks and credit unions have sufficient reserves for the funds they have on deposit.
This regulation states that you are not allowed to make more than six automatic or preauthorized transfers from your savings or money market account per calendar month or statement cycle. Your bank or credit union will not prevent you from making any transactions, but will charge you a fee for each transfer after the sixth.
What accounts does Regulation D affect?
Savings/ Money Market Accounts: Regulation D places a monthly limit on the number of transfers you make from either your savings account or money market account (checking accounts provide unlimited transactions). Transfers made without your physical presence are limited to six per month, while those made in person are unlimited.
- Automatic transfers to another deposit account, third party or another institution
- Transfers made by a service representative on your behalf, including those initiated by telephone, fax, and e-mail
- Overdraft transfers and ACH withdrawals
- Online and mobile banking transfers
- Pre-authorized, automatic, scheduled or recurring transfers
- Deposits and transfers made to loans
- ATM cash withdrawals and transfers from checking account(depending on daily amount limits and sufficient funds)
- Withdrawals and transfers made in person
- Transfers sent in by mail with an original signature
Tips to Avoid Regulation D:
- Have direct deposits be sent to your checking account which is not subject to Regulation D. This will give you the most flexibility and access to your money
- Arrange withdrawals and transfers to come out of checking account
- Plan ahead and make large transfers as opposed to multiple small ones from your savings or money market account
- Use ATMS or perform transactions in person
If you exceed the limit three times during a rolling 12-month period, your savings or money market account can be closed and the remaining balance will be transferred to your checking account. Another thing to keep in mind is that some banks and credit unions charge an “Excess Withdrawal Fee” before the Regulation D permitted six transfers per month. It’s always a good idea to take time to review and understand an institution’s withdrawal limitations before opening a savings or money market account.
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Isis is a mobile wallet service founded by AT&T, Verizon and T-mobile. In addition to being free, this app is available for many smartphones. Instead of taking out your wallet to pay, you would just pay with a tap of your phone. Although this is very innovative, the branding needs some work. In order to steer clear of being related to the Islamic State of Iraq and Syria, they will undergo a name change.
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