We take so many things for granted in the U.S. as we go about our daily lives. We all have bank accounts of some type and, for the most part, we live and pay with our plastic debit or credit cards.
That is NOT the case in many foreign countries. Credit is much more difficult to get and cash is used much more often, particularly in developing countries.
More of a challenge
It is a far more arduous way to do business for those of us who are used to pulling out our card, signing the slip, and going on our way in that you have to make sure you have enough cash on hand every day to function.
I am living in Ecuador and everything is paid in cash, U.S. dollars to be exact. The good news is that you don’t have to worry about the exchange rates that often change on a daily basis in countries that do not use the U.S. dollar as currency.
Your U.S. dollar may be worth more or it may be worth a lot less on a daily basis when you are abroad. Be prepared for some sticker shock and check the history of the exchange rates in the country you are considering as a destination for a living. That exchange rate can greatly affect the value of your dollar and your cost of living.
Out of the country
This next point is very important. Be sure before you leave the States that you let your bank know you will “be out of the country.” I put a “travel alert” on my bank account that I renew periodically until I can decide how I want to bank where I am. Some banks in the U.S. will not allow a U.S. citizen to live abroad and keep a U.S. bank account.
There are laws regarding that. I can’t tell you the look of sheer panic that I have seen on some of my expat friend’s faces when they try to get cash from the ATM and cannot.
They call their bank only to be told their account has been “frozen” because the transactions were not recognized. It really is for the customer’s protection.
No money access
When my friend told them he/she has moved abroad the bank tells them they cannot use that account if they are not living in the U.S. Days or weeks can go by before the issue gets resolved and my friends are in a foreign country with no money access. As a side note, I believe there are some investment accounts in the U.S. that can accommodate expats living abroad, but not true with most banks.
Lastly, the requirements for opening a bank account abroad are very different than they are in the U.S., especially for expats (foreigners). We are used to our credit history being checked which is not recognized abroad.
Finding the right bank takes some checking into when you arrive. Each bank has its own requirements to open an account and you may not be able to open a bank account until you have obtained residency in that country. Keep the U.S. account open and available until you are able to transfer funds.
Do you have a banking headache you want to talk about? Share your thoughts by posting in the comments below.
by: Cathy McKey