September 21, 2009

Eight Things You Need to Know about Using ATMs Abroad

Everybody knows that traveling costs money. What is the best way to carry that money around? If you are going away for an extended period, it is likely not a good idea to carry several thousand dollars on your person, because of the risk of being robbed. Luckily, there are other options.

People used to use traveler’s checks. Not anymore. These days, most people travel abroad with limited cash on hand, several credit cards, and an ATM (debit) card.

Credit and debit cards – MasterCard and Visa especially - are accepted many places around the world, and can be a great way to make purchases at the supermarket, shops and many restaurants. Always ask if they charge a commission, though. Some places in Guatemala, for example, charge up to eight percent.

An ATM card is usually your best deal to get local currency, depending on your bank. Some US banks don’t charge at all for withdrawals; others charge $5.00 or more a pop. (You can call your bank to find out.) Plus, there are charges at the ATM in-country. Those fees can add up, but you have the advantage of not carrying around wads of cash – instead, you can take out what you need. You often have the option of taking out local currency or US dollars, and you usually get a great exchange rate.

If you are relying on your ATM as your primary means of accessing cash when you are abroad, there are a few things you need to know.

1) Not all towns have ATMs. Plan ahead, especially if you are going to remote places.

2) Not all ATMs work. You cannot count on the one ATM in town to be working all of the time. So, don’t spend the night in a hotel with no cash, with the expectation that you will be able to pay the bill in the morning by taking money out of the ATM. Get the money first.

3) Never, ever let yourself run completely out of cash. Always have at least enough cash to get through one more day stashed away somewhere. You don’t ever want to be completely dependent on finding a working ATM.

4) Have a secondary bank account with enough money to get through at least two weeks, and carry an ATM and a pin number for that bank account. If you lose your card, forget your pin, or your account is blocked, you might need this secondary account.

5) Know the pin numbers for your credit cards. In a pinch, you can use those to take out money. If you do use a credit card to take out money, pay the bill ASAP, as the interest begins to compound immediately on cash withdrawals.

6) On the back of your credit cards and your debit cards, there is usually a direct number you can call collect if you encounter any issues. It is often difficult to call collect from abroad, but you can call the collect number directly, and someone will answer the phone quicker than if you go through the 800 number.

7) Let your bank know before you leave the country about your trip. Otherwise, they might detect unusual activity and either cut off your card or reduce your spending limit.

8) If you are stuck and out of cash, your best bet is to call someone and ask them to send you money via Western Union or MoneyGram. They usually have branches even in small towns.

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