Best US Bank For RTW Travel?

I use Schwab Investor Checking. I've written about it before so do a search for Schwab or look under my username. Best idea is to use a debt card instead of a credit card. Debit cards exist without all the international fees (see Schwab) and can be used like credit cards. The only no international fee one I knew of was Capital One but I think they've changed that now.

The first post on this branch, titled, Welcome to the Gap Year has a link to an FAQ on credit cards and debit cards. Try reading some of it.

Thanks BpGuruagain. I had clicked on it before I posted and EVERYTHING appeared to be very old (2004...). I didn't want to rely on that being current information, as banks cange policies/run promotions/etc. I just went back and clicked further than I had before and see there are a few more recent posts (albeit not many, and hard to sort through what countries and conversations that have been going on for several years worth of posts).

I'll try to sort through for some more informaion but I'd still love to hear from anybody who is willing to share their insight on this thread as well. It never hurts to get fresh eyes to look at a question. They may be like me and have a hard time sitting and reading hundreds of posts from the last several years to add insight that hasn't already been mentioned.

Thanks. :)

The key is to find a bank that has some sort of account that charges no fees for withdrawals from other ATM's. Most banks will offer such an account, but there will likely be some sort of minimum balance requirement. Credit unions often feature these as well.

The brokerages offer another option worth exploring, as #1 suggested.

Some of the major banks tout accounts that allow for free withdrawals from affiliated ATM's, but this is somewhat disingenuous. The withdrawal fees for international withdrawals are determined by the bank which maintains your account; Cirrus and Plus do not permit banks to charge withdrawal fees to their international customers, so in the case of these accounts, it is your bank that is deciding to selectively charge you the fee, and it has nothing to do with the overseas bank whose ATM you are using. You can do better by getting an account that charges no fees, regardless of which ATM you use.

Banking in the US is still largely not a national business, so your choices will vary somewhat based upon where you live. Again, most banks have a no-fee account, so it's a matter of choosing the right account, more so than it is about choosing the right bank.

There are 2 basic fees you need to look for. A transaction fee (your bank charges say $3 per withdrawal) and an exchange fee (your bank charges say 3% of the amount changed)

Transaction fees are not charged by the owner of the ATM you use in another country. They are charged by YOUR bank at home.

Exchange fees are often not shown as 'fees' as such, they simply bury them in the exchange rate they use. So a lot of banks will advertise 'fee free overseas ATM use' when in fact all they are referring to are transaction fees not being charged. What you need to know is what exchange rate you will receive relative to the Interbank Rate or Visa Rate which are now one and the same. Banks will sometimes advertise or respond with the phrase, 'based on the Visa Rate'. This is not good enough. BASED on something doesn't mean you get that exact something.

The exchange rate you get is far more important than transaction fees. You want to find the lowest exchange fees you can get. There is no clear and best answer in the USA unfortunately. It varies by area and changes from time to time. For someone going on a 2 week vacation it probably isn't worth the effort to find the best deal. Saving 3% on the exchange of a couple of thousand is no biggy. But for someone who plans long term or repeated travel it does become worth the effort. Do the math.

Whatever you do, DO NOT believe any claim of being 'fee free' until you have had answers to the specific question of what rate of exchange you will receive relative to the Interbank or Visa Rate.

i use first republic...keep a 2500 balance & they take care of all transaction fees...theirs & the distributing atm bank

...usually i check in at a cybercafe after a withdrawal to verify the transaction & though there might initially be a charge on my account it is invariably erased within a day without any action on my part

..best to develope a relationship with your banker...ask them what you can do if you were down to your underwear but can get to a phone or cybercafe...

..in my case they will call my daughter in the states on a preordained phone number...she will verify my status & together they will work out where & how to send me money

...i wear a belt & suspenders so i carry 2 first republic atm cards...2 from other banks & 2 credit cards...

This is the go-to list; as noted, you want to minimize
a) the hassle of your bank (i.e., you don't want to be SOL if you lose a debit, or have a debit that doesn't work on Plus/Cirrus)
b) the per-ATM transaction fee charged by your bank (completely ridiculous, particularly for banks like Bank of America which charge an astounding $5 per foreign ATM transaction outside of their rather limited alliance network)
c) the percentage fee on the quoted exchange rate (this varies between 0 and 3%)
and maximize
d) the interest rate you're getting, which is only 3-4% at the best e-banks these days, but which will likely increase over the next year or so as the Fed begins to raise rates again.

http://www.flyerguide.com/wiki/index.php/Credit/Debit/ATM_Cards_and_Foreign_Exchange

The Flyerguide Wiki is updated fairly often. I wouldn't worry about the credit card since you'll probably only use it in emergencies, or to get the insurance on a car rental. I'd go with American Express since they have offices in an enormous number of overseas cities. The Starwood Amex is fee-free first year, and is widely considered to be a great card - you'll even get yourself a few free hotel rooms for your trip when you need a break from the hostel!

A good alternative is to check your local credit union - you'll be able to have a personal relationship with your banker so your ATM card won't get shut off (for fraud protection) just because you're using it overseas, and the credit unions are much less likely to charge you garbage fees.

(Also: it would be helpful if the Intro to Gap Year thread were replaced - there's far too much outdated information in that thread.)

The exchange rate you get is far more important than transaction fees.

Not really. The cost is typically 1% of the interbank rate (i.e. the best rate available). However, the tendency as of late is for banks to increase these fees, so 2-3% is no longer not so uncommon, particularly among the larger banking behemoths such as Bank of America. The likelihood of getting 0% (the interbank rate) is fairly low, and even if you get it, you can lose it later.

In contrast, an ATM withdrawal can now be as high as $5 per withdrawal, but you can find accounts that bring that to zero. On a $100 withdrawal, that's equivalent to saving 5%, and it's a fee that you can realistically expect to eliminate completely.

Here's the problem: If the bank increases the fee on the exchange rate, it's a matter of bank policy, and there isn't much that you can do about it. This could be increased retroactively, after you open your account. (For example, HSBC used to charge 1%, but now charges 3%. If that happened to you in the middle of a trip, there isn't much you could do about it.)

However, if you have enough money in your account, the ATM withdrawal fee can be waived if you negotiate. I've done this myself for one of my accounts -- the account began with a no-fee provision that was subsequently eliminated, but I negotiated with my bank manager to keep it for my own account. (The fee posts, and then a credit is posted to cancel it out.)

In the scheme of things, while 0% would be lovely and 1% is certainly good, 3% is not actually that bad. You would get a worse rate if changing travelers checks or cash, so in comparison to your alternatives, it's still a fairly good deal.

I'd say that 1% is a good target; if you can beat 1%, rejoice, but don't expect it. And don't count on having that cost forever, as the bank can increase that fee (and probably will eventually), at which point there isn't much you can do about it. You have more control over the ATM withdrawal fee.

why not just sign up with a bank like first republic if you can afford to let $2500 sit almost idle drawing only money market interest?...

...i'm sure first republic isn't the only bank...but they make no money on the transactions or commissions on conversion rates...in addition they absorb the foreign atm fees.