Q - How can I ensure that I am getting the best foreign exchange rate?
A - Many expats read the financial newspapers and do not understand why they do not receive the same rate of foreign exchange. What expats don't realize is that foreign exchange rates quoted in financial publications are based on large trade volumes and do not accurately reflect the rates given to individuals. Also, printed newspapers do not reflect real time and foreign exchange rates change from second to second. To gain the most favorable exchange rate, it is best to use your ATM or debit card as you will receive the internal bank-to-bank rate. Also, many banks also charge an additional foreign currency conversion fee.
Q - Why is it difficult for expats to open a bank account in a foreign country?
A - Since 9/11, most countries have enacted tighter regulations regarding business with foreign nationals. For financial institutions that has meant requiring more documentations to open a bank account. When opening a bank account in a foreign country, at a minimum, expats should be prepared to have on hand:
- Government identification (i.e., passport and driver's license)
- One bank reference or current bank statement from your local bank
- A letter from your employer including length of employment, duration of assignment in foreign country and salary/other compensation (especially if applying for credit)
- Proof of address in home and host country
Q - Can I still use online banking for all my banking needs?
A - Be sure to check the functionality of your bank's online banking service. Remember that online banking is usually country specific and will provide service for where your accounts are domiciled. This means that online banking in the US may only provide service for your US bank accounts and not any bank accounts held overseas. The Bill Pay function is usually also country specific meaning that you may not be able to use your US Bill Pay feature to pay a bill in a foreign country.
Also check to see if there are any transactional limits on account to account transfers, bill payments or wire transfers.
Q - Why is it difficult for expats to obtain credit in certain countries, especially in the US?
A - From a banking perspective, foreign nationals new to a country without a credit or work history in the country are generally viewed as more of a risk than local customers. While some countries have established credit bureaus and can provide their citizens with a credit history, a foreign credit history does not usually transfer across countries, and most banks are not familiar with how to interpret a foreign credit report. As a result, an expat new to a country, and applying for credit, such as a credit card, may experience difficulties. Again, expats should establish their financial needs pre-departure and find a bank that can provide appropriate financial solutions to their financial needs.
