How To Avoid Finance Fees Abroad

Money
I intend this to be the only personal finance-related post on this blog, but I think it's a valuable one, especially for people planning on traveling abroad soon.

Foreign finance fees can be killer- on top of the bogus 1% Visa/Mastercard foreign transaction fee  for using anything with their logo on it, it's not uncommon to see 1-3% conversion fees and $2-5 transaction fees for purchases and ATM withdrawls- from your own bank! The guy that owns the ATM can charge you whatever he wants on top of that. I'll be in Japan for a year, so keeping these extra charges to a minimum is worth some effort. I've poked around a few different sites, and figured out what seems like a pretty good three-prong approach to not going broke because of bank fees.

First- securing no-fee ATM withdrawls. With fees from both an ATM owner and your own bank, you're forced to either carry a lot of cash, pay a bunch of money, or use plastic and pray that your credit card company doesn't decide your activity is unusual and freeze your card. Additionally, word on the streets is that the Japanese use cash a lot more than we do. Getting access to cheap cash is essential.

On a recent trip to Yosemite, I met a traveling young woman that pointed me to PNC, a regional bank with completely online sign-up (you have to print out and mail in a form, but besides that, you never need to set food in a branch). What makes PNC special is that as long as you keep a $2500 balance with them, they refund all atm fees, anywhere, ever (I'm foregoing about $100 in interest income over a year, but ATM fees would most likely exceed that by a pretty good amount) . There are other banks that promise no-fee cash withdrawls, but their reimbursements are usually bounded by an upper dollar limit, or the United States' borders. PNC promises reimbursement worldwide. Cash access? Check.

Next: paying with plastic. While PNC lets you do withdrawls for free, if you use their check card for a purchase, it ends up costing you 3% on top of the 1% standard fee. This is pretty common for credit cards, but Capital One (the company with the hyperbole-laden "No Hassle" commercials) not only waives their own fee, but also eats the 1% fee from the credit card companies. The result? You can use it just like a normal card. They do have a steep APR, and I wouldn't recommend them if you don't pay your balance every month, but otherwise, it's a great deal. Note: I couldn't figure out which card(s) this applied to, so I called them up, and told them to give me no transaction or annual fees, and cashback instead of bogus "rewards." The support staff were very helpful, and saved me a bunch of sorting through the fifty different cards they offered.

So I'm set for withdrawing money and buying things, but PNC is pretty useless for saving any money: you have to have a ridiculous balance to get interest rates anywhere above 1%. That's where ING comes in, an all-online bank with awesome across-the-board savings and CD rates, and cool features like free e-checks and paper checks you can mail from the internet. While they do have some cool investment options, their basic package is a no-nonsense, no-risk way to make a little interest income.

Short story short, if you're traveling abroad, withdraw with your PNC card, spend with your Capital One card, and toss everything besides your minimum checking balance in an ING account. Score one against bogus fees!

A few sites were very helpful in sorting this situation out, and if you're not going abroad, there might be better packages of financial institutions out there.

BankRate.com keeps up-to-date information on rates and fees at banks across the world.

FatWallet looks out for great deals and promotions in personal finance (and everything else)

and Consumerist just loves to expose sketchy financial companies.