When you make the decision to travel abroad one of the first things you think about is money.
How much do you need? Which currency will I need to use? How will I access my money? Can I use my credit card while traveling? What’s the best debit card for international travel?
There is a ton of information on the internet about travel credit cards. This is because both you and the people providing the information stand to benefit if you sign up.
The people providing information about credit cards often make commissions if you sign up. And you benefit when you use credit cards to earn air miles.
However, not every place you travel to will accept credit cards and its always handy to have cash on hand. Plus it’s not like you can pay a street vendor with a credit card.
In these situations it’s best to have a debit card. You can withdraw money in the local currency and use it however you like.
Normally this would be the part where I say something about how you have a lot of options when it comes to finding the best debit card.
But this time things are a bit different. If you have a US social security number and are truly looking for the best debit card for traveling, you only have one option: open a Charles Schwab High Yield Investor Checking account.
Disclaimer: I am NOT making any money by telling you this information. This is an honest opinion based on my experience. I personally use this debit card and have had a great experience with it while traveling.
Now instead of comparing different debit cards, I’m simply going to explain why the Charles Schwab debit card blows the other cards out of the water.
Before we get started, I’d like to point out that with an account name including the words “High Yield” you’d expect more than 0.06% APY. That’s extremely low and there is no sugar coating it. This is a tradeoff you have to be willing to make to get the perks that this debit card offers.
No Foreign Transaction Fees, Minimums, or Monthly Fees
Banks are companies and companies like to make money. Since fees make companies money, many banks tack on fees for all kinds of things.
When you’re choosing a debit card you’ll notice that some of them charge monthly fees for simply having an account. Others charge you a fee if you don’t have a minimum amount of money in the account. And another common fee is the foreign transaction fee.
Let’s look at each of these and see why the Schwab debit card is great for traveling.
No Foreign Transaction Fees
When you’re traveling, the last thing you want is to get home and realize your bank charged you $5 or $10 every time you made a purchase. Or maybe they charged you a percentage of every purchase. It adds up and it’s not a good use of your money.
The Charles Schwab High Yield debit card has zero foreign transaction fees, which will make your wallet smile.
This means that if you withdraw money from an ATM or make a purchase using your debit card, you will only be charged for the equivalent in U.S. dollars. No additional percentages or fees will be tacked on. The price you see is the price you pay.
No Account Minimums
Imagine this: you’re traveling around and realize your funds are starting to get lower than normal. You check your account to see how much money you have left and realize that your bank charged you a fee for not meeting the minimum.
Yes, that’s right, they charge you money since you don’t have enough money.
If you are already low on money, how is charging you a fee going to help the situation? Obviously none of us wants this to happen to us.
The Schwab debit card does not have a minimum balance. This means as long as you have money in your account, you won’t get charged a fee. With that said, be careful not to withdraw more money than you have in the account or else you will get charged.
No Monthly Fees
Some debit cards charge a monthly fee. Take these two for example. Both charge a monthly $10 fee.
You might look at those and think, yeah but the interest rate is a lot higher. Well, good point, but let’s take a look at why that doesn’t really matter.
Let’s use the 0.5% interest rate as an example. With a monthly fee of $10, you are spending $120 per year. If you are making 0.5% interest on your money per year, you would need to have $24,000 in your account just to break even ($24,000 x 0.5% = $120)!
Instead of wasting money on a monthly fee, there are plenty of other debit cards that don’t charge a monthly fee. And you guessed it, the Schwab High Yield debit card account doesn’t charge a fee.
Now that we know Schwab isn’t going to charge these ridiculous fees, let’s see at how they will actually give us money back when we are charged fees by third parties.
ATM Fee Reimbursement
When you are researching debit cards you’ll notice that some of the cards are a part of an ATM alliance. The most prevalent of these alliances is the Global ATM Alliance. This alliance is a partnership among banks all around the world.
These banks teamed up and basically said, hey if you don’t charge my customers a fee for withdrawing from your ATM we won’t charge your customers for using our ATMs.
You gotta love good old fashioned teamwork! This is a great option for the non-US based readers.
The only issue with the alliance is that you still have to identify which ATMs you can and can’t use so you don’t get dinged with a fee.
If you’re in the US and can sign up for a Schwab debit card, you don’t have to worry about this though.
Instead of charging a fee for using an ATM that is outside of their network, Schwab says that all ATMs are free to use for their High Yield Investor Checking debit card holders.
Even if another ATM charges you a fee, Schwab will reimburse you.
It sounds too good to be true, but it works. I came across an ATM in Barcelona that wanted to charge me 3 euros for a withdrawal. I didn’t have to think twice since I knew Schwab would reimburse me later.
Schwab does a pretty good job of combing through your charges and automatically reimbursing you for ATM fees. If a mistake is made and a fee slips through, just let them know and they’ll take care of it for you.
How to Open a Schwab Debit Card Account
Along with the perks above you also get access to benefits that other top cards are offering as well. Things like mobile deposit so you can deposit a check through their app. Also, you can link it to Apply Pay™ so you can pay with your phone at any place that accepts payment through Apple’s payment system.
When you’re ready to sign up for the Schwab debit card, it’s simple. Head over to the Schwab website and click on Apply Now. If you plan on depositing $10,000 in the account, Schwab will give you $100 back if you sign up through this page. The Schwab debit card option is in the bottom right.
This is part of Schwab’s personal referral program. Once again, I’m not making money from this, I’m just letting you know the opportunities you have to save.
One of the things you’ll notice is that a Schwab brokerage account is automatically opened up as well.
This gives you access to trading stocks on the market, however, you don’t really need to concern yourself with that to get the benefits of the debit card.
Once you’ve accepted that you have to open a brokerage account, it sends you over to the application where you fill in all of the basic info including your name, address, and social security number.
When I initially signed up for a Schwab debit card account when I left to travel, I didn’t have a lot of time. I only had a week or two before I left on my trip and I knew I wanted to get the debit card before I got on the plane.
If you’re in a last-minute situation like this you still might be able to get the card in time.
Since it was going to take a 3-5 days to connect my other bank to my new Schwab account to deposit money, I had to figure out another way. I wrote myself a check and drove over to a Schwab brokerage branch where I had to deposit the money into the brokerage account.
After the money cleared, I used the website to transfer the money from the brokerage account to the checking account. Then I called up Schwab and paid the $15 rush delivery fee to get the card expedited to me.
Make sure you sign up early enough before your trip that you don’t have to waste money getting the card shipped to you. Normally they will send it to you for free through normal shipping services.
Using Your Debit Card While Traveling
Before you close out of this page and start signing up for the debit card, here are some final pointers for using your card while you’re on your trip.
Use Your CREDIT Card Whenever You Can
If you’re being smart about your air miles and using credit cards to save money, you’ll want to use your credit card over your debit card whenever possible. Your debit card does not earn you air miles or give you cash back.
Treat your credit card like your debit card: never spend more than you have. Use your credit card wisely and you’ll be able to earn flights and other worthwhile bonuses like hotel stays.
Since using your credit card isn’t always an option, use your debit card to withdraw cash in these situations.
Always Pay in the Foreign Currency
When you’re purchasing something in a foreign country you’ll often be asked if you want to pay in US dollars or in the foreign currency. Always select the foreign currency.
Just because Schwab won’t charge you a foreign transaction fee doesn’t mean these businesses won’t. If you choose US dollars these businesses can tack on an exchange rate percentage that the business gets to keep. Instead, just pay in the foreign currency and let your bank handle the exchange.
Don’t Take Out Too Much Cash
Just because you can take out $1,000 from your account, does not mean that you should. Be smart when you’re traveling and only carry on you the money that you need for the day.
Pickpockets are always on the lookout for vulnerable tourists and before you know it, your money could be gone.
Take out what you need and then split up your bills in different areas. Put some money in your shoes, put some in your wallet, some in your inside pockets, etc. This way if a pickpocket does get some of your money, they won’t get it all.
If you have a US social security number you now know that the best debit card for traveling is the Schwab High Yield Investor Checking account card. It doesn’t charge you any crazy fees like other cards do and it will even reimburse you when you’re charged an ATM fee by another bank.
If you’re not a US citizen or don’t have a US social security number, look for the debit cards that are part of the Global ATM Alliance. This will increase your chances of finding an ATM that won’t charge you fees while you’re traveling.
Lastly, remember to let your bank know where and when you’ll be traveling so that they don’t flag your account and freeze transactions.
Do you use the Schwab debit card for traveling? What has your experience been?