Day 14: The Logistics of Living Abroad
by Eli Hodapp
Last night I discovered Portlandia, and it might be my new favorite TV show. Well, I guess saying I “discovered” it is fairly inaccurate because friends have been telling me to watch it forever, but whatever. I mentioned this on Twitter, but I don’t think I’ve seen a show since Arrested Development that has more laugh out loud moments per episode. I’d probably appreciate the show more if I actually lived in Portland, but I know so many people (myself included, to some extent) that exhibit so many of the things they make fun of on the show that it’s just incredible.
I was watching it on Netflix, which got me thinking of all the hoops you need to jump through in order to spend a significant time abroad. Even getting Netflix working is difficult, because it mainly only works inside of the USA, meaning you need to use a VPN service so Netflix thinks you’re watching from the right place. Quite a few web sites have similar restrictions. I’m using VyprVPN, which seems to be the best option for a VPN tunnel to watch Netflix.
They offer two different plans, the standard VyprVPN for $14.99 a month and the VyprVPN “Pro” for $19.99. A “Pro” account gets you access to some better security options and a few different ways to connect. Regardless of which plan you go with, you have access to all of their end-points which means that when you toggle to VPN on you can connect through Los Angeles, Washington DC, Hong Kong, London, Paris, and a few other cities. If all you’re using it for is Netflix, you don’t need 256 bit encryption and the other junk the “Pro” account offers, so go ahead and save five bucks with the regular account.
Setup is extremely easy, and detailed thoroughly on their web site for basically every platform and device you’d ever want to use a VPN on. On a Mac, once you get it setup you’ll just have an icon in your menu bar you can click to connect through the VPN whenever you want it to look like you’re using a computer in the USA. It’s really easy, and works very well. One thing to keep in mind though is that any web site that actively tracks the location of your IP address will notice something is up if one second you’re connecting from Europe and the next you’re connecting from the USA. Facebook locked my account, but fixing it was as simple as just entering in my security question answers.
Paying for things in Europe can be a little tricky, and there’s three ways you can go about it. The first being just rolling with whatever credit/debit cards you have and paying whatever fees they come bundled with. Secondly, you can look into credit cards with international benefits, or, finally, you could switch to a bank that has those same benefits and use their debit cards.
The first option isn’t really ideal. In my case, if I use my Chase debit card in Europe I’m subject to an international transaction fee, local bank fees, and an exchange fee. So taking money out of an ATM means a €3,00 fee from the bank that owns the ATM, a $5.00 fee from Chase, and an additional 3% fee for converting US Dollars to Euros. Regardless of what bank you use, you’re usually subjected to most of those fees. They might vary a bit, but that all seems pretty standard.
I went for the second option this time around. I signed up for the J.P. Morgan Select card which not only has no international transaction fees, but also is an actual smartcard with chip and pin. If you’re going to an area where you can use credit cards everywhere, this is beyond ideal. In Europe, the typical magnetic strip cards we use in the USA often require cashiers to dust off the old magnetic card reader which most people don’t even seem to know how to use. With this card, you can plug it in the payment terminals, input your PIN, and pay for things like everyone else. Without any fees, using this card is just like paying for things in their equivalent price in dollars.
Options for both credit and debit cards that come with an EMV chip in the USA are extremely limited. This stupid J.P. Morgan card not only has a ridiculous yearly fee, but also apparently has some pretty high credit score requirements, so it might not be a viable option for everyone. Other cards I found seem to have similar restrictions, since they seem to be almost exclusively targeted at the high-end business traveller. It seems pretty silly that more banks don’t offer these cards, as I can’t imagine the cost of issuing a smartcard versus a regular magnetic card could be that significant.
The third option, finding an international friendly bank, works great as well. Last year when I spent a month in Paris I used Charles Schwab Bank. They have completely free checking accounts, with the catch being you also have to sign up for their investment banking. The good thing is, neither account has any kind of minimum balance so you can have an investment banking account just chilling there with no money in it while you utilize all of Schwab’s standard banking services.
Similar to the J.P. Morgan card, Schwab has no international transaction fees, so it’s just like paying with dollars. What’s strange though, is that for all the great international perks they offer, it’s impossible to get a debit card from them with an EMV chip. So, while you can use your card everywhere, you’re relegated to keeping your fingers crossed that the old dusty magnetic card reader still works and anyone knows how to use it.
The main benefit Schwab has is that they also have no international ATM fees. Additionally, they’ll refund any fees that international banks charge you. So, for instance, with the above example and the bank charging me €3,00 to withdraw money, Schwab will credit that back to you when your statement posts at the end of the month.
Now, the problem with Schwab is it’s an entirely bank by mail financial institution. This means things take forever. First you have to open all your accounts and wait for all the paperwork to arrive. Then you need to figure out how to fund your accounts, which involves even more paperwork being sent back and forth. When you’ve finally got your Schwab accounts linked to whoever you do your actual banking with, transferring money between them takes a few business days.
This works OK if you’ve had ample time to set up your accounts and get them funded far in advance to you leaving, but it’s really irritating when you’re abroad and need more money but you’re still waiting for the bank to bank transfer to clear. During this time, your funds disappear from the origin bank and don’t reappear in your Schwab accounts until a few days later.
I thought just using the J.P. Morgan card was going to be the ideal solution, since I have the benefit of paying for things with dollars in real time without fees and didn’t need to juggle funds between banks. Unfortunately, in Barcelona most of your daily transactions will be at places that don’t take credit cards, so you’ll need to take Euros out of an ATM. Really though, the silly fees aren’t that bad if you take out large amounts of money at a time. My last withdrawal of €250,00 resulted in a overall conversion rate of €1,00 to $1.33, which is only a few cents more than the actual exchange rate at the time.
Also, speaking of exchange rates, to get the exchange rate you’ll actually get you need to look up the web site of whoever issued your credit card instead of just typing in “1 EUR in USD” in Google. For Visa cards, this is where you need to go to see the active exchange rates. Everyone usually seems pretty in line with conversion rates, but do you see minor variances. If you buy something and it turns out to be a little more or less expensive than you were expecting, this is why.
One last tip, if anyone ever gives you the option to pay in dollars, don’t do it. It’s generally not clear until you look at the receipt for the transaction, but by doing this you’re totally rolling the dice on what fees you’re going to get charged. If you’re rocking an American card with no international transaction fees, you’ll never get charged for paying for things in Euros.
Comparatively, if they press the “Pay in US Dollars” button on their credit card machine, you’re subject to both the exchange rate and conversion fee of the payment processor responsible for that credit card machine which seem to exist only to prey on tourists. I didn’t realize it until I got home, but a bar recently pulled this on me which resulted in a 2.95% conversion fee and a €1,00 to $1.37 exchange rate which is about 7¢ higher than it should be- Even without the silly 2.95% conversion fee.
So you’ve got your VPN taken care of to access things back in the USA, and money squared away. The next important thing is a cell phone. Thankfully, every country I’ve ever been to in Europe has had great prepaid SIM options, as cellular carriers here don’t seem to be anywhere near as ruthless as they are back in the USA.
The first thing you need to do is come up with an unlocked quadband GSM phone. Basically any phone you’ve gotten from AT&T, including iPhones, will be quadband phones. Getting them unlocked is another story entirely. If you’ve satisfied the contract requirements of a particular old phone you’ve got, either by paying AT&T for two years or paying an early upgrade fee to get a new phone, you should be able to call them and get the unlock code. If you talk to the right person, getting the code should be pretty easy and they’ll be able to walk you through entering it in.
If you’ve got an iPhone, AT&T won’t give you an unlock code. You’ll need to explore third party unlocking options which depending on the kind of iPhone you have could be as simple as plugging it in and pressing a few buttons or could be as complicated as flashing new baseband firmware to your phone and other irreversible things. If you don’t know what you’re doing, you’re probably better off just buying an already unlocked iPhone 3GS off Craigslist.
In Spain, the best bet to get your unlocked iPhone connected to a cellular network seems to be via an Orange prepaid SIM. The currently available smartphone plan runs €3,50 a week and allows for unlimited data with reduced speeds after 100MB of transfer a week, calls for €0,09 a minute, and text messages for a similarly insignificant amount of money. Any Orange store can set you up with one of these SIM cards. You’ll need to bring your passport, €10,00 for the actual activation which also includes the first week of use, and as much money as you want to load the SIM up with. I threw €40,00 on mine, which will cover the weekly fees while I’m here along with leaving a nice buffer for talking and texting without needing to worry about running out.
It’s really only worth going to the trouble of doing all this screwing around with cell phones if you’re going to be abroad for more than a week or so. AT&T’s international rates were recently lowered, and while I wouldn’t really call them “reasonable” by any stretch of the imagination, they’re a lot less insane than they used to be. When you consider the cost of potentially needing to buy a second unlocked phone, and all the associated screwing around getting a prepaid SIM, it’s probably just a better option to buy an international data allotment from AT&T, international roaming, and just try to use your phone as little as possible.
The more I think about it, the more I wish there was a web site out there that you could input your travel destination, how long you’re going to stay there, and have it tell you things like this. If I could have punched in “I’m spending six weeks in Barcelona” and a site could have told me “Hey very few places take credit cards, your best bet in Schwab banking and using ATM’s. Also, here’s everything you need to know about getting the right Orange SIM and where to get it from,” that would’ve been amazing.
Although, really, the prepaid SIM thing in Spain seems substantially easier than it was in Paris. Orange in France offers a similar deal, but you have to set it up yourself via this incredibly confusing text-based WAP portal that’s all in French. To make things even more complicated, this system is only in French, and Google Translate really isn’t good at translating abbreviated cell phone menus into English.
Hopefully this helps someone!