Recently, a friend of ours just came back from an overseas trip where he found himself unable to use the debit card he had taken, and for some strange reason, unable to obtain a cash advance on his credit card at this particular bank he was at. He ended up asking a friend to wire him some money from the States. The friend, rightfully suspicious, made him call to verify that this wasn't some e-mail scam.
Indeed, knowing that your bank cards will work in a foreign country is very reassuring. We cannot assume that whatever works in the States will be the same elsewhere. As a result, we've already acquired a chip-and-PIN card and we discussed the purpose of that in an earlier post that can be accessed here.
Here are some things to consider about using debit and credit cards.
- Credit Cards - Do They Accept?: this is a legitimate question, even in the most developed countries. Japan is still a cash-based society. More and more places are accepting credit cards, but I wouldn't count on it.
- Credit Cards - Foreign Transaction Fee: call the credit issuing bank for each card you have and verify the foreign transaction fee. For example, our United Visa has a 3% fee for every transaction. That's not outrageous but there are others that may charge a lot more per transaction. The JP Morgan chip-and-PIN card, as well as the Chase Sapphire card doesn't charge any fee.
- Credit Cards - Cash Advance: the one rule to remember with cash advances from a credit card is...don't do it. It's very costly to use your credit card like a debit card. The typical cost includes a flat fee per advance (~$10), plus a variable bank transaction fee of a certain percentage, plus interest at a high rate (e.g. 19%) compounded daily from the day of transaction. In other words, use only in an emergency. Once you do, go online and pay it off as soon as possible before the interest starts accumulating.
- Debit Cards - Foreign Transaction Fee: depending on the bank, there may or may not be foreign transaction fees. The larger issuing banks are usually part of a global alliance or network that affords them to waive the foreign fee. This is when having an account with a larger bank becomes useful, instead of with the local community bank.
- Debit Cards - Using ATMs: The key is checking to make sure the debit card has a STAR or Interlink symbol on it, which indicates its compatibility with most ATMs around the world. However, this is not always the case with even the most developed countries. ATMs in Japan are different and foreigners may find that not any ATM will work. Good news is, the cash machines in 7-Eleven accepts foreign debit cards, and there's plenty of 7-Elevens around.
- Debit Cards - Bank Fee: the bank fee is what we get charged when we use an ATM that is not from our issuing bank. The fee can range anywhere from $1 to $5 or more, per transaction. Some banks, such as eTrade, have made it a customer service point to credit the account with whatever we spent on bank fees to get money out; particularly since eTrade doesn't have their own ATMs in most places. Unfortunately, the waiver does not apply internationally. Oh well.
It's best to call your banks and ask about the conditions stated above. The final tip is, have the bank contact and account information written down somewhere, in case your cards get stolen. Also, don't carry all your cards in one place. If traveling with someone else, divide the cards up so even if my stuff gets stolen, we still have another card that we can use.