Travelling Funds--How to in Germany?

[RetireeRobert]

Got a kid going to participate in foreign exchange program this summer. He is going to stay with a host family in Germany. We have not yet set up a checking or saving account for him, and of course he has no credit card.

Just wondering, in Germany, good ways (read that "safe" ways) for him to handle travelling moneys. Thought we would exchange "some" US for German currency. But don't want him carrying a lot of cash.

Travellers checks---ease or trouble actually using them at stores?
Debit card----problems?
ATM-only card----ease of finding ATM machines part of network? Fees?
Credit card for kids?
Other solutions?

Want ease of use by our kid, but also want safety in event of lost or stolen (don't want crook using Debit to drain account, or use credit to run up bills, etc)

 

[ERD50]

I gave our kids an ATM/debit card (on our account) and it worked OK for them. But check with your bank.

It was kind of nice to see, by logging on to our account, when & how much (and sometimes what) they were spending money on.

-ERD50

 

[samclem]

I think the ATM is the way to go. There are plenty of machines n GE (at least where I've been) and there's less chance of theft/fraud than some other options. Just get him a small account and an ATM card and he should be good to go.

Of course, GE is using the euro, but if he travels somewhere that doesn't (e.g. UK) he'll still be able to get money from the ATM.

Warn him to try to taper off so he doesn't come home with lots of euros needing to exchanged for dollars, since the currency exchange services charge quite a bit.

 

[RetireeRobert]

I gave our kids an ATM/debit card (on our account) and it worked OK for them. But check with your bank.

It was kind of nice to see, by logging on to our account, when & how much (and sometimes what) they were spending money on.

-ERD50

Hadn't thought about that. Of course the question then is, would we really want to know what he was blowing the dough on, when we couldn't do anything about it?

 

[toofrugalformycat]

When deciding which bank or credit union, ask how much extra they charge for overseas transactions on their ATM cards. It varies significantly.

If the ATM card is in the PLUS network, you can check to see if there are compatible ATMs where he is going here
ATM Locator | Visa ATMs | Find Bank Cash Machines
If it's Cirrus
MasterCard Global ATM Locator | MasterCard®

 

[Rustic23]

Try USAA Federal Savings Bank. I think they will take an account from anyone. They have lots of members around the world and I think 10 ATM uses a month are free, no matter which banks ATM is used.

 

[chris2008]

In Germany we believe in cash and ATMs.
Traveller cheques can be cashed at any bank. Stores usually do not take them. Some might if they are in EUR, not $.
For ATM, check with Citibank. They are in almost evey German town and a German colleague mentioned to me that he can use his card cost free overseas. It might work for you, too.

 

[Freein05]

It may be better for him to open a banking account in Germany. You would wire transfer money to his account. By doing this you will avoid all of the foreign exchange charges he will get when he uses an ATM. You also save the ATM charges. CITI bank has branches in many Germany cities.

 

[samclem]

It may be better for him to open a banking account in Germany. You would wire transfer money to his account. By doing this you will avoid all of the foreign exchange charges he will get when he uses an ATM. You also save the ATM charges. CITI bank has branches in many Germany cities.

Wouldn't this open up a lot of tax/legal complexity? E.g. Can an American (who is maybe 20YO) get a bank account in GE? Would he have to file a tax return in Germany for the 1.33 euros he earned in interest? If he's a dependent of RetireeRobert's, does RR have to show the foreign account on his US taxes?

I think your idea has a lot of merit for an individual who'll be spending a lot of time/money in Europe, but I'd be worried about all the complexity to save $20 in fees.

 

[Rustic23]

Another idea, you trust your kid with a foreign family, right? So why not just send them the check, let them set up something for the kid. Let the kid know the amount and what the allowance will be.

 

[pedorrero]

I have a savings only account (at a credit union). This is one way (the only way perhaps?) to get a semi-ATM card. The advantage of this method, used several trips but only Mexico and Dom. Rep. is this: you have a PIN-only card. without a PIN, it is useless to a thief (unlike a debit card, usually branded with a major credit card issuer too.) In practice, I bring the "savings acct." card, a "real" debit card, a credit card, and some cash. Hope he has a good trip, and a shame about the value of the Dollar !

 

[meridiver]

I have a savings only account (at a credit union). This is one way (the only way perhaps?) to get a semi-ATM card.

I don't know about now, but up until about three years ago, I had one of these from Wells Fargo, so I'm guessing you can get one without having to go to a credit union, you just have to call up your bank and specially request a card that is ATM only with no credit card privileges.

As for Germany, there are ATMs everywhere. The Plus system seems to be the most popular network. I wouldn't bother with travelers checks. They are just a hassle since you've got to go to a bank to cash them. One thing to be aware of though, some cards have a limit on foreign exchange withdrawals, ie, you can't pull out more than the equivalent of $200 (or whatever) per day. Your bank should be able to tell you what that limit is.

 

[megacorp-firee]

It may be better for him to open a banking account in Germany. You would wire transfer money to his account. By doing this you will avoid all of the foreign exchange charges he will get when he uses an ATM. You also save the ATM charges. CITI bank has branches in many Germany cities.

If you wire transfer, you usually get hit with a transfer charge from the receiving bank ... and sometimes the sending bank. It can be hefty ... depending upon the bank.

In my experience (having been traveling for a while now).
1) travelers checks are sometimes hard to change. At a bank, they may charge you an 'extra' fee for 'cashing'. Same at hotels and some businesses.
2) cash - carrying a lot of this can be risky. Also I ran into a situation where a bank (in Asia) wanted to charge me a 1% fee for my 'old' bills. No joke. Anything with a serial number starting after F was going to be assessed an additional charge, after the exchange fee and exchange rate differential. I had made the mistake of carrying a large amount of cash with me ... thinking it was the best solution... it is NOT.
3) atm - BEST solution. I monitored the exchange rates and my bank does NOT charge me, nor did it seem, the ATM Bank owners any fees. The exchange rates were almost equal to the 'sell' cash quoted rates at the banks. Be sure to have a 'back up' ATM card (another bank) in the event you run into problems with primary card. Also call up the bank and let them know that you will be in Germany, so they do not 'turn off the card' due to suspicious withdrawals overseas. One last thing is to make sure your daily limit is set high enough so you can cover normal daily expenditures.
4) when making big purchase, I have found that my AMEX card also gives me an excellent exchange rate also. Also inform the bank about overseas travel plans.
Best of luck to your kid.

 

[RetireeRobert]

Thanks all for the tips, links, and experiences.

Can't remember, but did anyone mention, or does there exist, some kind of "prepaid" debit card one can buy with a finite amount of $ on it (and not needing a checking account it is linked to)?

I was leaning toward getting him an ATM-only card with pin number (not a debit card). For a backup/emergency, it would be useful if I could find a "prepaid" debit card also for him.

The I could send him with minimal starting cash, and between ATM card and the emergency debit card with limited $ on it, he should be fine.

 

[chris2008]

No prepaid debit card I know of. The ATM / debit cards are connected to a normal bank account.

 

[meridiver]

I don't know about the prepaid debit card option, but what you can do is limit the funds in the bank account that the ATM card is tied to. If you make it a small amount like $300 or $500 with no overdraft protection, the card is then established with that as a "credit" limit and your son can't spend anymore than that unless you deposit more funds in the account.