2.07.2011

foreign transaction charge madness! [update]

The nice thing about traveling abroad in recent years is the ease of getting cash out. Pulling money out of ATMs and using your debit card seems to be the way to go. You don't have to deal with exchanging money or dealing with travelers checks and from what we've read the exchange rates are typically very good when you use a card. Over the last few years we've had no issues in France, New Zealand or Peru. The downside however is the finance charges that most banks charge, typically around 3% (at least with our current bank and many we've seen).

For our extended trip we figured rather than getting hammered for every purchase we'd see if we could do better than 3%. Well the good news is we did...how's 0% sound? Luckily we found CapitalOne. We started out looking at their credit cards, which currently charge 0% for foreign transaction fees. We thought it would be great for purchasing plane tickets and booking places to stay. However, knowing a lot of the places we would be heading wouldn't take credit cards we still needed to do something about getting cash out. Luckily CapitalOne also has checking accounts which also charge 0% for foreign transaction fees as well as no fees for using other ATMs, they even reimburse up to $10 each month for other banks ATM fees. It sounds like a match made in heaven for travelers.

The checking account is all online and allows you to easily transfer money in an out of another non-CapiltalOne account without having to deal with an ATM. We were approved for the credit card and checking account in minutes so we're ready to go. We'll still have our other cards as backups, but we're hoping CapitalOne proves to be as good as it sounds.

As always, time will tell.

update:
After several months of travel through many countries we've been able to use our CapitalOne credit card and debit card rather extensively (of note: they are both MasterCards). For the most part they've served us well, but they haven't been flawless.

Our CapitalOne debit card was completely useless in Nepal. We were unable to withdrawal money from any of the countless ATMs we tried. We were forced to fall back on our U.S. Bank card, which worked without issue, except for the $2 USD ATM fee and foreign transaction fees, but at least we had access to our money.

We have occasionally run into issues purchasing tickets online with our CapitalOne MasterCard, but after trying hours later transactions typically went through. We also ran into a few issues in India where the debit card wouldn't work with certain ATMs, but worked fine with others (even through the machines claimed to take MasterCard/Cirrus/Maestro cards). Usually we were able to find a working ATM, but a time or two we had to use our U.S. Bank card.

In Turkey we had to withdraw a good chunk of change for expenses related to our upcoming African overland trip and ran into issues pulling out more than a few hundred Turkish Lira, thankfully we didn't have any issues with our U.S. Bank card and were able to get the money we needed.

So far we're glad we have the CapitalOne cards as they've saved us from pointless charges and fees, but we couldn't have survived without our U.S. Bank debit card (which is a Visa, if that has any affect on it's success rate). I guess the lesson here is always have a backup.

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