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Banking and Finances
It takes hard work to save for your study abroad program and we want your money to
go as far as possible.
While budgeting and discipline make up the foundation of any good financial plan, there are various ways to access and spend your money while abroad, which may impact how far your money goes.
The following explains these methods, as well as things to be aware of with each method. Depending on where you’re traveling, certain methods will be more favorable than others. It is important to speak with your program director to understand which methods are most appropriate for your program.
It's worth the time to familiarize yourself with the local currency used in your study abroad destination. Make note of the type of curency and denominations, and the exchange rate to the U.S. dollar. Taking a few minutes to learn about the currency can make it easier to understand how much you are spending on your various purchases.
In many countries you can use your debit card at an ATM and withdraw cash in the local currency. Usually, you will get a good exchange rate, but you need to be aware of the following fees which you may be occur each time you withdraw money from an ATM in a foreign country:
- Your bank’s foreign ATM fee
- The foreign ATM’s fee
- Currency conversion fees
You should also be aware that your bank has a limit on the amount of money you can withdraw per day. Contact your bank and inquire about their ATM fees, understand your daily withdraw limit, and get a sense of how easy it will be to find an ATM where you will be studying. You may also want to inform your bank that you will be traveling as some banks may become alarmed when they notice foreign activity on your account and freeze your funds until they can ensure that it is you who is withdrawing the money.
In many countries you can use major credit cards as a convenient way of paying for
items. Most credit cards offer the added security of not holding you liable for fraudulent
Depending on your credit card, you may be charged certain fees when using it abroad. It’s important to contact your credit card company and inquire about these fees. Some of the common fees include:
- A conversion fee for each purchase (usually 1-3% of the purchase price)
- Cash advance fee and interest rate (for withdrawing cash through an ATM)
Make sure to inform your credit card company that you will be traveling as some companies
may become alarmed when they notice foreign activity on your account and may freeze
your card until they can ensure that it is you who is withdrawing the money.
In some countries, credit cards are used much less frequently than they are in the US. Ask your program director what types of businesses are likely to accept credit cards. You may also want to see how easy it would be for you to use your credit card abroad. Mastercard and Visa offer tools to help find ATM machines abroad that work with their system.
Countries in Europe use a chip and pin system for credit and debit cards issued in their countries. It is a more secure way of paying with credit or debit cards. Instead of using your signature to verify payments, you will be asked to enter a four-digit Personal Identification Number (PIN) known only to you.
You may encounter some challenges abroad trying to use a standard US credit card without a chip. It may be possible to get a chip and pin card from your current credit card company.
- Traveler's checks may be refunded if lost or stolen.
- Traveler's checks are not tied to your bank account or personal information, so your identity cannot be stolen.
- Traveler’s checks can be purchased through many banks and through AAA for a small fee. Some banks overseas charge a fee for each check cashed so you may want to get them in larger denominations.
Western Union provides international service and allows you to receive money at a foreign bank or post office directly from your family in only a couple of days.
MoneyGram is another way of wiring money. You can visit a MoneyGram agent location (such as some Wal-Marts) and send money to banks all over the world. You can also send money online.
Determining the amount of money you will need during your stay abroad can be difficult, especially if you are a first time traveler. Different countries have different standards of living based on their economies.
First, try to find out the cost of living expenses in the country that you are visiting,
such as transportation fares, rent, products, etc. Ask for advice from your program
director and from students who have been through the same program or been in the same
Finally, it is recommended that you budget 20% more than what you think you will need as it will help you in unexpected situations such as lost or stolen money or items. You should be prepared to cover unanticipated expenses that may come up during travel due to incidents such as canceled flights, missed flights connections, itinerary changes, etc.