While you may be used to paying for many of your purchases in the U.S. with your credit or debit card, you’ll find that you’ll primarily be using cash for your daily purchases abroad, more than likely paying only for large purchases with a credit card. Depending on your location, many shops and restaurants may not even accept credit or debit cards.
Because of this, you’ll carry more cash with you every day. The most convenient way to secure cash abroad is by withdrawing money from an ATM. ATMs are readily available all over the world and your current debit or ATM card can be used abroad as long as the card is in the Cirrus or PLUS network (check the logos at the back of the card).
You’ll need to inform your bank of your travel itinerary to avoid deactivation of the cards for irregular use. Check with your bank(s) to determine the daily limit of funds received. Many U.S. banks charge a transaction fee every time the card is used on a non-bank ATM. While each transaction may only cost a couple of dollars, if you withdraw money a couple of times a week, the charges could add up by end of the term. It is usually advised to withdraw more, less frequently, and storing your cash in a safe location.
When using credit cards, charges are immediately assessed for every withdrawal. Be aware that most banks assess a 1% or higher fee every time a credit card is used for purchases. If you use your card for every purchase, including items costing less than the equivalent of $20, these fees could mount!
For some students, opening a bank account while studying abroad has proven to be quite convenient and a money saver. Some countries, such as Germany, require this. In this case, you do not have to pay any ATM transaction fees within the host country, thus saving a few hundred dollars in fees. Having a local bank account also makes it easier to make housing and other local payments.
If you decide on this route, the onsite staff should be able to assist you in selecting a bank and completing the required procedure. For the initial deposit, you can use traveler’s checks or withdraw money from an ATM.
If your parents or guardians are financing your semester abroad, they could add funds to the account either by doing an international wire transfer or mailing you a cashier’s check or bank draft by certified or insured mail to then deposit into your bank account. If they choose to do a wire transfer, we suggest doing large transfers occasionally rather than transferring smaller amounts more frequently. The latter will cost more as their home bank will probably charge a fee, usually about $40 per transaction.
The Frugal Student
Tips we recommend to students (and parents) on a budget:
- Be frugal during the first few months. It is better to have a bit left over than to run out of money before your program ends. Purchase only necessary items during the first few weeks. Try not to immediately start shopping for souvenirs.
- Eat out only occasionally. We applaud students who are enthusiastic about the local cuisine. However, rather than eating meals at restaurants all the time, buy supplies at a local grocery and prepare meals in your apartment or residence hall.
- Explore the host city and country. Some students are compelled to visit as many countries as possible that they hardly spend a free weekend “at home.” Yet, there is much to discover and learn about your host city and country. Your semester abroad will be more meaningful when you start feeling like a native. This won’t happen however if you are traveling to another country or city every weekend. Also, consider exploring the roads less traveled. There are many lovely smaller cities that are worth visiting and affordable. Neighborhoods and suburbs also offer a glimpse of daily life abroad.
- Investigate free entertainment. Visit local parks, the city center plaza or the city’s museums. Attend open-air concerts, street festivals, and local fairs.