Banking Outside the US in Western Hemisphere

[osirissail]

Originally Posted by Pelagic

…. Like everything else it is negotiable depending on your overall relationship with the Bank. . . .

Which is an excellent point to remember for those currently living in North America or western Europe. - Once you leave those area (and maybe a few others, don't know about NZ or AUS) -everything - is negotiable when it comes to money. It is the custom to always negotiate/haggle during the purchasing process. If you don't you will both be paying considerably above the normal price for the item and the locals will have a less than favorable viewpoint about you. Part of their fun while selling their services/wares is the "haggle."

[Doodles]

As I was saying ....HSBC clients scrutinized in U.S. tax evasion probe | Reuters

[osirissail]

Not being too happy with my own bank about fees for overseas charges and ATM withdrawals, I attempted to get into the highly recommended Capitol One website and find out what exactly they offer. It was not easy to get past the fluff advertising and finding anything concrete about fees and charges, etc. was not successful.
- - I did find references to having to have an online saving account which is not a problem at all. However they mentioned a minimum $1,000 average balance or other account fees kick in. That is not a major problem.
- - Withdrawals by any method other than the "debit card" were severely restricted which is also industry standard for this type of savings account. Debit card withdrawals were unlimited with a US$500/day limit. Not a big deal either.
- - Other websites from folks who have been using the Capitol One debit card in Europe were not very encouraging especially when an ATM barfed on your card and did not spit out the money but processed the debit to your account. That required much paperwork to rectify most of which had to be done from your address of record inside the USA. So having somebody back home who can process your mail is very important. ATM "mis-fires" are rare but do happen often enough to be a consideration. I have found that certain banks are more prone to this problem than others. Here in the Caribbean most folks avoid RBTT like the plague but Scotia Bank and Republic Bank have very reliable machines.
- - Looking at comparable foreign fees on credit/debit/ATM cards the normal in the low range of foreign exchange fees on ATM/debit cards is the 1% of the transaction. From other websites comparing different bank cards that fee can escalate to 3% plus an additional transaction fee. Looking at the 50 financial entities listed American Express was at the top of the worst ratings while Capitol One was near the best rating.
- - Now the ringer - - the rate at which the US$ are converted into foreign currency or vice versa. Way back 25+ years ago when Visa/Mastercard first started doing business in Europe things were really great as their systems lost a lot of transaction records and by the time your charge got converted to US$ you did better than any of the on the street "Cambios."
- - That did not last long and now I have been noticing that the conversion from foreign to US$ is rarely anywhere near the published "bank rates" published in financial sources. Invariably you get a lousy exchange rate that even changes for a few days after the transaction is posted to your account. It is like they are retro-actively changing the charge to increase it. I have never gotten any understandable explanation of how that happens.
- - So even though the Capitol One or some other debit/ATM card may not have any "fees" directly associated with the foreign currency transaction, you may be experiencing a rather lousy exchange rate. It is as though the bank is simply transferring the "fee" into the exchange rate calculation. Tracking this is extremely difficult as everything is constantly changing. I noticed it as foreign currency exchanges I have made at different banks for the exact same amount of the local currency show up as different US$ amounts and the official exchange rates have not changed.
- - One last thing, some of the websites mentioned that the 1% to x% cash back or bonus for using a particular card can make a 1% fee card better than a "no-fee" card.

[donradcliffe]

We have been very happy with a Fidelity Investments account which comes with a debit card and low or no fees for foreign access. We have used the brokerage account like a bank account for the last 20 years--just invested in the money market funds.

This is compared to our Bank of America account, which has high fees for everything, especially ATM access.

If you move your money into an offshore bank, you may have trouble buying things, like over the internet from US firms.

[Vasco]

Originally Posted by MarkJ

We have found banking so very easy! There is really no reason to carry large amounts of cash stuffed up some pipe on the boat. Just your normal wallet cash is fine


Mark

Thought I'd put in a good word for cash. Especially in the Bahamas where there are no ATMs from Nassau to Georgetown. Being Canadian I travel with one US $ credit card. This is to avoid exorbitant foreign exchange charges that the Canadian credit card issuers love. This year when I went to pay my marina bill in Nassau the card was declined. Lucky I had cash stashed in a small pipe on the boat. With phones being the way they are in the Bahamas I managed to contact the credit card company later and they did send a new card to Georgetown. I use this card sparingly yet it was compromised. The stupidest part of this episode was that the card was used in Western Canada to buy expensive electronics. The card is a Canadian issued US$ card. What Canadian would use this in Canada? But I guess merchants don't question this. Having cash on hand is very useful and with interest rates the way they are these days you're not losing anything. I have yet to meet a merchant that would refuse cash and I don't know what I'd have done if I didn't have enough to pay my marina bill. Guess I'd have had to stay in the marina for ten more days to clear the mess up. Yes, it takes a bit of time to sort these things out.

[osirissail]

Originally Posted by donradcliffe

. . . If you move your money into an offshore bank, you may have trouble buying things, like over the internet from US firms.

Yes, definitely that is a major problem. I have local friends who are not poor and have significant assets - but they need to borrow my U.S. credit card to make internet purchases under my name. Their own South American Visa/Mastercard from a foreign bank was refused by the internet vendor. Legitimate vendors on the internet are getting very picky about what you use to pay for the item. Even with all U.S. cards from U.S. banks - but with a foreign "IP" address showing up - my transactions have sometimes been refused. I get around that by using PayPal which is linked to one of my U.S. credit cards.

[sarafina]

For those with military background who qualify, USAA is a well respected bank that is very accustomed to accommodating off shore clients. Specializes in it ya might say!

[Ex-Calif]

Does anyone still use traveler's checks and does the American Express office still cash checks?

When I came to Asia in 1984 ATMs were still on the horizon. Western Union was an option but we really just went to Amex and wrote a personal check. If I recall we could write a $2,000 check every 14 days or something. Of course you needed an Amex card.

I too get very pissed at the fees but you can't argue the convenience. The first time I went to an ATM machine literally located at the edge of a rice paddy in Thailand and 5,000 baht came out I was amazed.

To be honest I travel on my US based credit card (hate the FT fees) and take it for granted that I can leave for anywhere with $20 in my wallet and get cash in local currency at any ATM machine.

[lorenzo b]

Things have changed a whole lot since 1984. The overseas banking is driven by recent innovations in technology. Things can be radically different in different countries.
Mostly nobody uses travelers checks anymore and even $100 bills are suspect. We check with an updated copy of Lonely Planet for each country before we leave, but I'm sure you can get that info online too.
More and more people use credit cards, I hardly ever spend cash anymore.

[Pelagic]

Originally Posted by Vasco

Thought I'd put in a good word for cash. Especially in the Bahamas where there are no ATMs from Nassau to Georgetown. Being Canadian I travel with one US $ credit card. This is to avoid exorbitant foreign exchange charges that the Canadian credit card issuers love. This year when I went to pay my marina bill in Nassau the card was declined. .... I use this card sparingly yet it was compromised. The stupidest part of this episode was that the card was used in Western Canada to buy expensive electronics.

Two points in favor of an HSBC Premier type account for that kind of scenario.

1/ Anytime I travel, the first time I use my Credit Card I automatically get a personal call within minutes to confirm if I am there making that purchase.

2/ With their concierge treatment, if I had a card problem (lost or stolen) within 24 hrs emergency cash would be delivered to me anywhere in the world.

I do not stash money on board as that is just inviting problems and getting USD cash in any country allows me to exchange at the best rates.

[fvn]

Originally Posted by osirissail

Yes, definitely that is a major problem. I have local friends who are not poor and have significant assets - but they need to borrow my U.S. credit card to make internet purchases under my name. Their own South American Visa/Mastercard from a foreign bank was refused by the internet vendor. Legitimate vendors on the internet are getting very picky about what you use to pay for the item. Even with all U.S. cards from U.S. banks - but with a foreign "IP" address showing up - my transactions have sometimes been refused. I get around that by using PayPal which is linked to one of my U.S. credit cards.

That is not completely correct: a visa or MC is accepted everywhere, not matter where the issuing bank is. No matter the country come from.
Problems arise when you buy item like computers or other stuff that by international agreement can't be sold overseas. Let's say. Someone from Argentina try to order online a Mac computer in the States the service will not let use the card if the card is Argentinan because Apple can't sell and ship to Argentina, otherwise would break agreement with Argentinan retails.
That's it

[osirissail]

Actually, purchases from USA vendors with a foreign bank's credit card is a growing problem. Driven sometimes by credit card scammers/thieves using stolen credit card numbers. Even though the foreign bank's credit card is a member or appears to be a member of the Visa/MC/Maestro systems the vendors are having problems collecting the payments with timeliness or various bank transfer problems. 3rd World banks are woefully equipped to handle the currency exchange and exchange rates vary dramatically. Some countries even have two exchange rates which makes things even more of a problem. There are just too many hassles sometimes and the vendors and their own banks just do not want to deal with it. It might just mirror the increased hassles everybody is having in other aspects of international travel due to the fallout from 9/11. To try to stem terrorist financing the USA has mandated banking changes that have severely restricted access and transfer of funds to/from US banks by anybody outside the USA. Getting a USA bank account as a non-resident of the USA has been virtually shut down. I know that from first hand experience. It ain't the old days anymore. . .
- - Major established financial exchange systems - e.g. HSBC, Western European banks, etc. are right up to date and thoroughly integrated into the electronic financial systems. Probably you could surmise that banking systems that are subject to being "fooled around with" by the political leaders introduce problems that the USA vendors just do not want to deal with or pay extra fees for.
- - In the particular case I cited the product was not on a "proscribed" list and was a computer internet service renewal of a locally purchased product. I have seen that there seems to be a blanket avoidance of certain regionally generated credit cards regardless of the "affiliation" with international exchange systems like Visa/MC. I suspect it is simply a case of "hassle" avoidance. Profit margins on their sales is very small to begin with and they don't want to have to deal with delayed payments or failure to get paid the purchase price in US dollars promptly.
- - Even use of credit cards by US citizens for internet purchases is increasingly requiring that the item to be shipped to the "address of record" of the credit card owner - not your present location inside or outside the USA. That introduces a new level of problems in getting your purchase re-shipped from your address of record to your present location. Nothing is simple anymore!

[Vasco]

Originally Posted by Pelagic

Two points in favor of an HSBC Premier type account for that kind of scenario.

1/ Anytime I travel, the first time I use my Credit Card I automatically get a personal call within minutes to confirm if I am there making that purchase.

2/ With their concierge treatment, if I had a card problem (lost or stolen) within 24 hrs emergency cash would be delivered to me anywhere in the world.
I do not stash money on board as that is just inviting problems and getting USD cash in any country allows me to exchange at the best rates.

They would have a hard time calling me as when I'm in the Bahamas I don't have a phone.

Took 14 days for an overnight UPS to get to Georgetown. Don't know where they'd send the 24 hours emergency cash to me. I once had a Barclays account in Nassau. Went into a Barclacys branch in the east end of Nassau. They couldn't help me as my account was with the main office downtown!

[Randal Johnson]

Get your ex-wife to open an account for you. No, no, wait. Find a local bank and put your money in an account there. Get credit cards and at least two ATM cards from that bank.
We have been cruising and away from the US for nearly four years. We withdraw about $35,000 yearly from ATMs and charge about $5,000 on a credit card. We only use the CC for internet transactions like flights for our annual trip home. I have an email relationship with a lady at the bank and notify her when I make a CC charge. In all those years I have yet to have an issue with an ATM transaction.
I document all transactions on an Excel spreadsheet to keep track. Works for me.

[osirissail]

There seems to be a misconception that everywhere in the world must be exactly like what you experience living on land in the USA among some posters. It is not. As a Cruiser - which means traveling full time by vessel (sail/power) - we do not have access to telephones 24/7 and even if we have a Quad band world GSM phone you have to purchase a local SIM card and that gets you a new telephone number. So our telephones are used for local calls within the country we are currently cruising in - if we are going to be there for a few weeks or months.
- - Same with internet connections - WiFi is the "in thing" but it takes a few days to set it up plus an external powered antenna. Internet Cafe's are rapidly disappearing as WiFi takes over the market. You can lug your computer around the island in your backpack or Pelican Case to "hotspots" in local shopping malls or use the local computers in a PTT with keyboards in foreign languages.
- - Not too many years ago the only contacts we had were by HF radio, international snail mail, or expensive PTT telephone/internet outlets. And keeping in contact was a once a week or even once a month thing. Now, with the internet and WiFi we can get what we now call "constant contact" which is really daily if at anchor in a WiFi anchorage, or weekly if enroute/moving from island to island. It is comparative, not literal.
- - So keeping in touch with your bank and financial affairs is not the same as folks who live and travel on land and air. We are light-years ahead of where we were a few short years ago, but still light-years behind folks living on land.
- - Getting your mail and any replacement credit cards, etc. takes a month or more. Which is why it is a very good idea to have at least 2 different credit card accounts and an ATM (not a debit) card. If one card gets compromised or "shut down" by the bank you have the other card to work with until the replacement can get to you.
- - International "snail mail" takes weeks or months and in some cases years. Courier service (DHL/FedEx/UPS) takes days but costs you a fortune. From Florida to Grenada for a letter package of mail from FedEx starts at US$80 - for junk mail and catalogs????
- - Having someone to sort and read your mail is essential as a cruiser for two reasons - first to pick out critical letters/notices and then email them to you; and secondly to throw away all that junk mail/flyers/fake invoices/political spiels/etc. so that you don't spend a hundred dollars postage for a box full of trash mail.
- - Same thing with banks - they seem to always want to telephone your "home" address inside the USA rather than email or call you international - and how are they going to know what your current phone number is as you change SIM cards?
- - Life as a cruiser is very different - which is why we are out here - lack of hassling communications (phone/mail/etc.) is really nice and adds to the peaceful atmosphere we cherish. But the down-side is making arrangements for critical communications to reach you. And for cruisers that can take a month for an emergency message to get to you not a couple of hours as for land based sailors.