Never trust a foreign bank (Banking abroad)

Member Name: ordy

Product:	Banking abroad
Date:	17/10/01 (483 review reads)
Rating:

Advantages: Local flexibility

Disadvantages: High Charges, High Risk

I work overseas a lot. I am now in Estonia and before that I was in Pakistan. I also have friends who work all over the place. Banking is always a problem. Here are the issues :-

-SECURITY-

Well this isn't just about protecting PIN no's. In the UK we are well protected. If someone uses our card fraudulently and we notify our banks as soon as we find out the card is missing the bank is obliged to refund the charges.

Equally if the bank goes bust (and it DOES happen!) we get 90% of our deposits back.

Overseas there is rarely this level of protection. The downside from both the above events is significant.

-CHARGES-

Generally we do not pay bank charges. OK some of us do, but really most people with an IQ greater than 20 have woken up to the real world and providors such as Smile, IF etc... mean that we can get goo dinterest rates without charges. We can also get cashback/good loyalty points on credit cards without paying charges (Egg, Goldfish etc...)

Overseas? Forget it!!

The USA is particularly bad on this one - the yanks seem quite content to pay per cheque (maybe the IQ theory is quite correct :-) )

-OPTIONS-

OK, so I have outlined the problem. How do I get around it. I would sugest that for many people the following combination of service providors would save a considerable amount of money :-

1. American Express. With AMEX you have the ability to cash cheques from your current account for US Dollars at any of their offices without charge. It then takes typically 3 weeks for the cheque to clear so you have funds for 3 weeks. This then removes the need for a foreign cash card to get funds from.

2. Fleming Jersey Account. No charges and decent ineterst for cheque book accounts in Dollars, Sterling, Euro's, Aus Dollar and a few others. Get whatever salary you have paid into that and then cahs your cheques locally using AMEX. No tax charged on intere
st either.

3. Smile. Transfer funds from Flemings to Smile and pay your UK bills on the internet with no hastle.

4. Liverpool Victoria Credit Card. Most credit cards weight the rate on overseas transactions by 2 or 2.5%. Liv Victoria have no such hidden charges. Effectively therefore you save 2-2.5% on all credit card purchases with this card - better than any cashback on the market. There is no charge for the card, nor is there a loyalty points scheme. Nationwide BS also have a good card that does not charge.

So generally you do not have to have a local bank account overseas - UK providors will suffice and potentially save you a considerable sum.

Summary: