Must-Know Banking and Money Tips for Students Studying Abroad



If you are going to study abroad, you should understand the local banking system and currency and make financial plans before you start wandering the streets of your new home.

Banking and money differ a great deal depending on the country you are traveling to. While the U.S. dollar is widely accepted, you will still need to understand the local banking system and how your money works; otherwise, you run the risk of being taken advantage of, or having trouble buying food and other items from the local shops and cafes.

Also, you are going to want to ensure that you have enough money the entire time that you are studying abroad, which means that you will have to do some research. Saving your money and knowing how to spend it is just as important as knowing how the local banking and money system works.

Here are some tips for your trip to a foreign country that will apply no matter where you are going, as well as some tips for specific parts of the world.


Watch Exchange Rates

If you are living in a foreign country and you know that at some point you are going to have to exchange money, then you want to keep an eye on the currency exchange rates. It makes sense to get the best exchange rate that you can for your cash and sometimes, the rate will be very, very good.

Many people wait until they need more money to exchange. This means that they have no control over the exchange rate and must simply accept the rate being offered at the time they exchange their currency for the local one.

There are many ways to watch the exchange rate, but the Internet is probably the best way. You can find websites or apps for your phone that will alert you when the exchange rate has reached a preset amount. That way you can take advantage of it when it happens, and you won’t have to pay the regular rate next time you need local cash.


Know the ATM Transaction Cost

When you are in the U.S., there is no fee if you are using your own bank’s ATM, but you will be charged a fee – usually somewhere between $2 and $5 – if you use another bank’s ATM.  

But when you are outside the U.S., you won’t just be paying an ATM fee. You will also have to pay foreign currency exchange rates and possibly even some kind of service fee. ATMs are still the best way to get your money while in a foreign country, but just make sure you know the fees before you use them.


Find Out About Bank ATM Networks & International Exchange Banks

Make sure that you are aware of bank ATM networks that will allow you to withdraw money without as many fees as you would encounter with a random ATM. For example, if you have a bank account with the Global Bank Alliance, you can use your ATM card at any foreign bank that is part of that network and avoid the international ATM access fees. Your bank is likely part of an alliance, particularly if it is a major bank with branches across the U.S.

You should also be aware that currency exchange counters have terrible rates for currency conversion. They are everywhere, and you might be tempted to use them if you need some cash quickly. Make sure that you prepare in advance so that you don’t have to use these exchange counters.


Get Cash Less Often

One of the most obvious tips to save money is to get your cash out only once or twice during the time that you will be studying abroad. Of course, this may mean having large sums of cash, and not everyone is comfortable with carrying cash around.

If you don’t want to hold onto your currency in cash, consider getting traveler’s checks instead. That way, you still have access to your cash, but you don’t have to carry it around. If you do happen to lose your traveler’s checks somehow or you get robbed, you can replace them within 24 hours. Although they are becoming somewhat obsolete, you can still find traveler’s checks if you look for them.


Use Your Credit Cards

This seems like terrible advice, but if you use the right credit card while you are studying abroad, the benefits can be worth it. First of all, you want a credit card that does not charge you a foreign transaction fee. These fees can be pretty hefty, so you want to make sure that you avoid them if you can.

Secondly, you will have to pay a cash advance fee if you use your credit card to get cash. Depending on your credit card, the cash advance fee may be less than the conversion fee that you will have to pay to exchange your U.S. dollar for the local currency, so check your credit card contract for details.

Finally, avoid interest if you can, which means paying off your credit card each month before the interest has a chance to accrue. This will allow you to save money on both the foreign money conversion and avoid paying any extra in the form of credit card interest.


Get Foreign Currency Before You Go

One idea that you may not have thought of is to get your foreign currency before you even leave the country. You can usually do this through your bank. In most cases, your bank is going to charge you a fee for the service of changing your money into foreign currency, but the fees are almost certainly going to be lower than what you would pay once you actually got over to the country you are traveling to.

Of course, this does mean that you are going to be carrying around a large sum of cash, but this is the way to go if it doesn’t bother you too much, and you can always convert it into traveler’s checks once you arrive at your destination country.


Set a Budget & Stick to it

Finally, it is just as important to budget and watch your spending as it is to find ways to save money on banking and conversion fees. In fact, setting a budget and sticking to it is probably the single most important thing that you can do to make sure that your money lasts you throughout your entire period of studying abroad.

It can be tempting to do touristy things and spend money when you arrive in a foreign country. In fact, you will likely encounter tourist traps immediately (depending on which country or city you travel to) and may be tempted by the welcoming atmosphere.

Wait until you have explored a bit more and got to know which shops the locals visit and where they eat. You will spend a lot more money at the cafes and shops that cater to tourists, so it is better to find the ones local like to and stretch your money as far as possible. Plus, the food is always better at the cafes that the locals frequent.


Other Useful Tips & Information

Throughout Europe, ATMs are the standard way to get money. They always have English instructions as an option, and the fees vary depending on your bank. For example, you could pay $2 to $5 for using an ATM out of your network and a 1-3% currency conversion rate. Also, Visa and Mastercard charge 1% for foreign transactions.

Most ATMs in Europe don’t actually charge you money to use them, but there are some out there that do charge and the fees are high, so avoid those ATMs.

Make sure that you let your bank know that you will be traveling to a foreign country and that you will be withdrawing money from an ATM. If not, they may suspect fraudulent activity and freeze your account, and you will have to resolve that account hold before you will be able to access your money again.

Make sure that you are aware of your daily withdrawal limits and that you allow for the currency conversion when you try to withdraw near these limits. For example, if your limit is $300, you are not going to be able to withdraw €280. You can always ask your bank to raise those limits for the time that you are studying abroad if you need more money than the daily withdrawal limit.

Also, consider getting a second debit/ATM card and taking it with you. Your bank is usually happy to send you one (it takes 2-3 weeks) as a backup in case an ATM malfunctions and eats your debit card. This almost never happens in the U.S., but it has been known to happen more often in certain parts of Europe.


Related: 7 Reasons to Study Abroad

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