Day 18: Step #9, Take Your Administrative Life Virtual

How To Be Sure You Can Access Your Bank Accounts (And, Therefore, Your Money) Online From Anywhere In The World

Dear Student,

In this step of the program, I’m going to walk you through what you need to know and what you need to do to be sure that you can manage your administrative and financial lives virtually. This way, you won’t have to worry about not being able to access an account, to get cash, to move money, or to pay a bill. You want these critical functions to be hassle-free…not a distraction in your new life overseas.

Let’s begin with your bank and investment accounts. These are perhaps the most critical pieces of this puzzle and the most important things to get set up correctly before you make your move overseas. That’s a first key to success with this agenda—to address these issues before you leave your home country. It can be much tougher to accomplish what you need to accomplish from another country.

You probably already have internet banking set up to check your account balances and maybe even to pay your local bills online. If you don’t, that’s the first step. Go to your bank’s website and follow the instructions. If you find that your bank doesn’t offer internet banking…switch banks. This is not negotiable. You don’t want to relocate to another country without the ability to access your bank accounts online.

Specifically, you want to be able to move money (from one account to another or from one country to another, via wire transfer, for example) and to pay bills remotely and electronically. These are the critical criteria, and, again, if your current bank doesn’t offer these services, find a new bank that does. You can’t put yourself in a position of being required to show up at your local branch to authorize a transaction or to transfer funds from one account to another. How are you going to stop in at your bank in Des Moines to approve an account transfer if you’re living in Buenos Aires?

Additionally, you don’t want to rely on a single bank. I recommend that you divide accounts between at least two banks that both offer complete and unrestricted online access.

A friend who has spent the past year relocating his life and his business from California to Panama City had an experience recently that reminded me of the importance of this strategy. You never want all your eggs in one basket. This fundamental rule applies to every aspect, big and small, of your financial life. In this context, the point is that you don’t want all your available cash in one bank.

My friend worked hard and carefully to organize his new life in Panama in every regard…but he neglected to diversify his available cash between two banks. For some reason that he still doesn’t understand, about six weeks ago, his bank reset the password for his online access. Not a big deal to the bank. They mailed the new password to my friend at his U.S. address.

Really big deal for my friend who had no intention of being at that U.S. address anytime soon. Meantime, he couldn’t access his account online. He couldn’t make bill payments. He couldn’t wire funds where they needed to go.

He contacted his bank and asked if he could send wire instructions by fax, as he had urgent obligations to meet. No, the bank said. They don’t accept wire instruction by fax. (Most banks don’t; more on this in a minute.)

My friend was able finally to sort things out without flying back to the United States (he changed his password again to something that he chose over the phone), but it wasn’t easy and it took several days.

Access to your cash is key. With only one bank account and ATM card, you run the risk of being unable to withdraw cash when you need it.

My friend’s story is extraordinary. However, there are more common concerns. What if, for example, you find yourself in a place where the only available ATMs don’t use the same network as your bankcard? This was fairly common when ATM machines first came out. It’s less of a concern today, but, still, depending where you travel, can be an issue.

Today, both most ATMs and most ATM cards use at least two or three networks. One of my debit cards uses Interlink, Plus, and Star, meaning I’m able to use it most anywhere in the world. Cirrus is the other major global network, and I have another debit card that works on the Cirrus system. Still, I’ve been places where I’ve had to try several ATM machines before finding one with a network that worked with one of my cards.

My point is that diversifying accounts between two banks does you less good if both banks’ ATM cards access only the same systems. You want as many options as possible.

Here’s another very common reason for having debit (ATM) and credit cards with more than one bank: When you relocate and begin spending time in new parts of the world, you’re going to begin using your cards in new places. You’re going to break out of your existing spending patterns.

And this is going to raise red flags with your bank. Sooner or later (probably sooner), your cards are going to be shut off. You’ll hand one to the clerk at the grocery store or the waiter in the restaurant only to be told, after they’ve tried to swipe it, that it’s been denied.

The reason it’s been denied is what the banks now refer to as “unusual activity.” But this likely won’t be the reason that appears on the credit card machine for the clerk or the waiter. The machine will say, “Denied” or “Declined.” And you’ll be left to figure out how to pay for your bread and milk or how to cover your dinner bill.

Unless you have another card to offer.

This issue has been mitigated somewhat by the advent of mobile data and banking apps, allowing you to approve transactions and reestablish function to a denied card in real time. As long as you happen to have data (or Wi-Fi access) at the time the purchase is denied, you can use your email or banking app to approve the transaction and get your card turned back on.

This happens to us regularly, because not only did we break out of our normal spending patterns when we moved from the States to Ireland 20-or-so odd years ago…but, in the decades since, we have never established new normal spending patterns…at least not that fit any pattern any bank has on file or can understand. Since 1999, our lives have been nothing but unusual activity.

This means that our credit cards are shut off monthly, and we’ve learned to cycle through them. Once, in Paris, after an extended trip through several different countries, I found myself at the end of the cycle. I offered the last of my four credit cards at the time to the salesgirl in the department store where I was trying to buy a birthday present for my daughter…only to have the card declined and handed back to me with a meek and embarrassed apology. My other three cards had already been turned off, and I hadn’t had the opportunity to contact those banks to have any of them reactivated. I had no option but to try to call one of the banks that afternoon from the Paris department store. I eventually was able to speak with someone who eventually (more than an hour later) was able to reactivate the card, but it was a big hassle and a big expense. I had to place the international phone call using my French cell phone. Again, these days, when a card is declined, we can much more easily get them back up and running as long as we can connect to a Wi-Fi network (or through my son’s data—he’s never without it!). Even if you have to place a call to a bank, you can use an Internet connection to make the call via Skype or another VoIP provider at a fraction of the cost of a trans-Atlantic phone call.

Banks will tell you that they’re monitoring your debit and credit card activity for your protection. Lief and I have had, over the years, hundreds of conversations with different banks, trying to explain our situation. “We’re never going to fit any of your spending patterns,” we tell them. “We live overseas, and we travel constantly. Please make a note in your system.”

Which they assure us they do. Nevertheless, we don’t go more than a few weeks without having a card cut off.

Another reason to have more than one debit and more than one credit card with different banks is because cards expire. What if your new card doesn’t catch up with you before your old one expires? We’ll discuss how to arrange international mail delivery later in this step of the program. You’ll create a system for receiving physical mail…but it won’t be foolproof. Nothing is. And, again, you don’t want to be caught in a situation where you have no valid debit card, for example…and therefore can’t take cash out of an ATM.

Here’s one more reason to have more than one card with one bank: What if your card is lost, stolen, or cloned? This happened to a friend just last month. His Bank of America debit card was cloned…not in Panama, where he’s living, but in New York, where he was visiting. He had the card shut off as soon as he realized what had happened. But it was his only one. We lent him cash to carry him through until a new card arrived.

The downside to ATM cards are ATM fees. In the United States, you’re charged a fee every time you use an ATM that isn’t a machine of your bank. In addition, some banks charge an ATM fee if you use your card overseas. Bank of America does this, charging you US$5 every time you withdraw money from an ATM in another country. Even if you take out US$500 at a time, that amounts to a 1% surcharge. Plus you’ll likely have to pay a fee to the machine owner, as well.

The best case is a bank (or institution, such as Schwab) that doesn’t charge a fee when you use someone else’s machine and that (again, this is best case) even credits you when you are charged a fee. Schwab qualifies and, for this reason among others, has become our preferred financial institution. Schwab automatically refunds any ATM fee you are charged when you don’t use one of its bank machines (PLC Bank). So when I’m charged US$3 by a machine in Panama, Schwab credits me the US$3 on my account when the withdrawal is debited.

Another bank that credits ATM fees is Everbank. This is an online bank with its only branches in Florida.

The second critical banking issue when living overseas (in addition to accessing your own money) is paying bills. Again, you want to be able to do this online from anywhere in the world. Most banks now offer this service. Some charge a monthly fee but not all. Obviously, free is better, as long as the bank offers all other services you want.

You need the ability to pay bills online first and foremost so that you can keep current with your credit cards. In addition, though, you also want to be able to write and issue checks online—so that you can send your grandchild a check for his birthday, for example. Don’t imagine you’re going to be able to write a check from a country in Latin America and drop it in the mail. If it gets where it’s going at all, it’ll take weeks.

The make-or-break service that you’re shopping for when choosing which banks to do business with in your new life overseas is the ability to transfer funds online or via fax. You need to be able to transfer funds from one bank account to another within your “back home” country and, as well, from your “back home” account(s) to your new account(s) in your new home country (or wherever).  Especially challenging, as I’ve mentioned, is wiring money across international borders. Many banks still require you to show up in their offices to present the wire instructions. Schwab accepts wire instructions via fax (another reason this group has become our preferred financial institution). Another bank we work with takes wire instructions over the phone (using a series of passwords).