Your Debit Card & Traveling Abroad
How to know if and when to use your debit card and some better alternatives.
Swiping our debit cards is second nature to all of us. We don't think twice about it. But if you're heading off to a new adventure in a faraway land, it's time to think twice.
The tips I'm giving you below are all things I had to learn the hard way...so I'm glad to share them with you to save you money, time, and stress when traveling abroad.
Liability & Your Bank
Credit cards are known to have far more protection than debit cards. However, with most bank-issued debit cards, you could be liable for more than you think. If your card is not actually lost or stolen, sometimes it can take a couple of days or longer to even know there is a problem. Unfortunately, many banks do a timeline-style liability structure. So, for example, if you're traveling for an extended period of time, and maybe have more than one card for that bank account, you might not notice a problem right away. Often after 2 days, your liability can go up to 5x's the original liability, and after 60 days, you might be covering the whole amount! Make sure you know how your bank handles liability before venturing out.
Setting Travel Notices for your Cards
Most banks require you to file a "travel notice" with them at least 2 days before you leave. Some you can do online but for others, you have to call them. For example, my BOA card lets me login and simply set the dates and locations where I'll be using the card. However, my Paypal debit card requires me to call them and will only let the notice work for 30 days before you have to call them again. Make sure you check out how your financial institution works for travel notification well before you plan on leaving.
NOTE: if you do a travel notice online and do not receive a notification that it was accepted via your notification settings (email, phone call, text message) assume that it didn't work and try again or just call them. The first time I set a travel notice, it didn't go through and I had no idea!
Holds on Your Debit Cards
The first time I went to Canada, I went to pay the cab driver and none of my bank cards worked. I had contacted the bank and told them of my travel plans but for some reason it didn't go through. Luckily, I had a credit card on me otherwise....sigh. Banks recently have started running software that if your debit card is used outside the USA (and sometimes outside your state), they freeze the accounts. Normally, a simple phone call to the issuing bank will take care of it. However, nothing brings a great adventure to a grinding halt then being on hold forever to get permission to use your own money!
ATMs & Withdrawing Cash
Until recently, I was guilty of just seeing a sign for an ATM and walking over to use it. My new friend, Miguel, in Portugal literally grabbed my arm and emphatically asked me what I was doing? I told him I thought it was pretty obvious but he explained that you should never use an ATM in a shop or one simply labeled "ATM" on the street. An ATM in or outside a bank is the way to go. The fees are often lower and there is no chance of a possible "skimmer" (a way of getting your PIN, cloning your card, and using it to clean you out) that the shop owner may or may not be aware is being used.
Rewards & Perks
Debit cards often don't provide you with cash back rewards or travel points. Some do but not as good as a credit card. So when you travel, you are getting nothing back, and on top of that they are charging you both a transaction fee and currency conversion. Not cool.
If you are traveling alone or were the only one who decided to bring your ATM card for a joint account, losing that debit card can be very disruptive. Most USA-based banks won't mail new cards out of the country and almost all of them will only mail new card to the address you have on file with them as your residence. Last year, I had a BOA card declined and found out it was due to fraud. They wouldn't just lift the fraud even though I had the card because the person who "skimmed" my card would still be able to use it. So I'm in Canada trying to figure out how to get a new card. What if I didn't have a credit card for emergencies? Or had no cash on hand? Lucky for me an old friend from home picked the card up from the mailbox and overnighted it to me.
Lock Them Up
Taking all your cards with you when you venture out is NEVER a good idea. If the place you are staying at doesn't have a safe in the room or a safe on the premises, hide additional cards in a place few people would look like a box of tampons or taped inside a travel map. Don't put it in anything along with something valuable like a camera case or a computer bag. Thieves will often just grab cases like that and open them later to see if there is anything of value. You might have the camera with you but the card is now gone.
Check your card activity Don't assume because you're not having any issues with your debit card that all is dandy. Just as you would check your email or Facebook daily, when you are traveling, do the same for your bank accounts. Not only will this help ensure there is no fraud but it's also a good way of keeping track of how much money you have spent so far.
NOTE: If you're not sure you want to use the hotel's public wi-fi to check, you can always use the hotel's computer to check but be sure to logout and empty the brower's cache when you're done. Or you can simply call the international number on the back of the card.
Alternatives to Debit Cards
CREDIT CARDS I hate credit cards with a passion. I ran up a good amount when I had a great job and when I lost said job, I was in trouble. However, when traveling, it is important to have at least one credit card on hand. Not only do they offer more protection but think about the rewards/perks you could rack up!
RECHARGEABLE DEBIT CARD Consider buying a rechargeable debit card that you could use instead of your bank debit card. I have one on hand in case I lose my backpack and I keep it hidden back in my room. If my debit card is lost, I can simply login and transfer money from my bank to the card and use it until I can get a replacement or I get back home. One of the best ones I've found is from American Express called Bluebird. It offers the same protection as an American Express credit card and is accepted virtually worldwide. You can use it for purchases or to withdraw cash.
I hope this helps you when making a decision to use your debit card when traveling abroad. If you discover some more tips, please let me know so I can share with my subscribers!