Bandz Will Make Her Dance: $$$ and Opening a Foreign Bank Account

     Today, I received my debit card in the mail from Deutsche bank!  Since it is currently Rebajas (similar to Black Friday for an entire month,) I can now swipe away :)  When I was researching the abroad money situation, I had a hard time finding concise information so let me give you the run down..

1. If you exchange dollars to euros, your money will disappear.  As of today, the exchange rate is 1 USD = .75 €.  This means that the euro is more valuable than the dollar when traded on the open market, this does not mean the dollar sucks (don't be an ignorant American.)  There are winners and losers.  You are the loser, as well as domestic producers because their products are worth less.  However, because the USD is worth less, US exporters are able to compete with other countries (hey China) on the global market.  China actually withholds a large amount of USD in reserve in order to raise the value of USD against their yuan so that Chinese products will have greater demand.  Now you are ready to earn your macroeconomics degree!
2. Conversion charge of USD to € is about 3%.  In theory, you will only get 72% of every dollar.
3. Don't exchange large sums of money at the airport, you will get robbed.  Only exchange enough to hold you over until you can get to a bank/ATM (maybe $40-60 to cover a cab ride.)  In addition to the 3% conversion charge, Currency Exchange shops will keep another 4-6% of your money, knocking it down to 67% of every dollar.  To demonstrate the difference between using a bank and an airport currency exchange: 

• $100= (100x.75)-(100x.03)= 72 € at the bank.  (Americans are losers)
• $100= (100x.75)-(100x.03)-(100x.05)= 67 € at the airport. (Americans are even bigger losers)
4. To avoid these ridiculous surcharges, exchange large quantities of paper money at a bank teller or withdraw from your debit/credit card through an ATM.  You could even get a group together and pool your money so that you avoid the charge (usually need over $200).  
5. Research if your bank has partner banks in your destination in order to avoid the additional service fees.  For example, Bank of America and Deutsche bank have connections and I can withdraw money from a Deutsche ATM free of charge.  I know that Citibank also has a program like this.  Otherwise, Visa is widely accepted and generally has fair rates.
6. If you need to open an account at one of these American banks, do it 2-3 weeks before you leave.  I did it the week before and my mother had to pay a lot of money to mail my debit card to Spain.
7. Find out what your bank/credit card company charges for foreign transaction.
8. Notify your bank that you will be in a foreign country.  I just logged on to my mobile banking and sent an email.
9. Consider setting up a foreign bank account like me so that you can have a debit card that isn't charged every time you swipe!  This is also convenient is you get a small job.
10. You can only WITHDRAW money from ATM's in Spain.  To deposit my euros, I have to go up to the counter with my card.

I make it rain.

To open up a foreign bank account, you will need (at least)...

1. Passport
2. Address & phone number
3. 3 month or longer stay
4. Money to deposit
5. Basic banking vocabulary (such as I want to open an account)

All of these tips I learned from experience, but if you want to read it again in a slightly more descriptive format, I've included 2 links.


How to exchange money
How to get the best exchange rate