Expat Banking Guide Managing Money When Living Abroad

Expat Banking: Managing Money Across Countries

Important Disclaimer: Banking requirements, fees, regulations, and financial information reflect general conditions as of early 2025 and vary significantly by country, bank, and individual circumstances. Exchange rates fluctuate constantly. Fee structures change. Banking regulations and tax reporting requirements are complex and subject to change. This article provides general information only, not financial or tax advice. Consult with financial advisors, tax professionals, and banking institutions for guidance specific to your situation. International Van Lines is a moving company and does not provide financial, banking, or tax advice.

Michael’s first month in London involved more banking frustration than he’d experienced in his entire adult life. His US credit cards worked but charged 3% foreign transaction fees on every purchase. His debit card charged $5 per ATM withdrawal plus terrible exchange rates. His bank flagged his cards for fraud constantly despite him informing them about the move.

Opening a UK bank account required proof of address, but he couldn’t get proof of address without a UK bank account for his security deposit. His salary deposited into his US account but he needed pounds for daily expenses, and transferring money via his bank cost $45 per transfer with awful exchange rates.

By month three, Michael finally had systems in place. Multiple bank accounts in both countries. A Wise account for currency exchange. Credit cards with no foreign transaction fees. But he wished someone had explained all this before he moved.

Let’s break down how to actually manage money across countries effectively.

Before You Move: Setting Up Your US Banking

Your US bank accounts remain crucial even when living abroad. Don’t close them.

Choose the Right US Bank

Not all banks handle international customers well. Some make life difficult when you’re abroad. Others are expat-friendly.

Good options for expats:

• Charles Schwab (reimburses all ATM fees worldwide, no foreign transaction fees)
• Citibank (has international branches, easier to coordinate across countries)
• Chase (widely accepted, good online banking)
• Capital One (no foreign transaction fees)

Small local banks often cause problems. They might close accounts when you notify them you’re moving abroad. Their fraud detection can’t handle international patterns. Online banking might block access from foreign IP addresses.

If you’re banking with a small local institution, consider opening an account with a larger, international-friendly bank before moving.

Update Your Bank Profile

Notify your bank you’re moving internationally. Provide:

• Your overseas address and phone number
• Travel dates and destination
• Plan for how long you’ll be abroad

This reduces fraud alerts and account freezes.

Ask specifically:

• Will my online banking work from abroad?
• What are foreign ATM and transaction fees?
• Can I receive international wire transfers?
• Will my credit cards work internationally?

Set Up a US Mailing Address

You need a US address for banking, credit cards, and various financial accounts. Options include:

• Family member’s address
• Mail forwarding service (companies like US Global Mail, Virtual Post Mail)
• Previous address if you’re renting out your home

Update all financial accounts with this permanent US address. Financial institutions need a US address on file even if you’re living abroad.

Maintain Credit Cards

Keep at least 2-3 US credit cards active. Choose cards with:

• No foreign transaction fees
• Good rewards programs
• Chip and PIN capability
• Wide acceptance

Good expat cards:

• Chase Sapphire Preferred (no foreign transaction fees, good travel rewards)
• Capital One Venture (no foreign transaction fees)
• American Express (not accepted everywhere but useful where it works)

Your US credit history doesn’t transfer internationally. These US cards remain crucial for US purchases and as backup in your new country.

Opening Bank Accounts in Your New Country

You need local bank accounts for receiving salary, paying bills, and avoiding exchange fees on daily expenses.

What You’ll Need

Requirements vary by country but typically include:

• Passport
• Visa or residence permit
• Proof of address (lease agreement, utility bill)
• Employment letter or proof of income
• Sometimes a reference from your US bank
• Tax identification number if applicable

The catch-22: Many banks require proof of address, but you need a bank account to secure housing that provides proof of address.

Solutions:

• Some banks accept hotel bills or temporary housing documents initially
• Ask your employer to provide a letter confirming your address
• Use a relocation service that assists with banking
• Bring documents from your home-finding trip showing you secured housing

Bank Selection Criteria

Choose banks based on:

Branch and ATM network: Convenient locations matter for deposits and ATM access.

Online banking: Good online and mobile banking is essential. Can you access your account internationally?

English language support: Banks in expat-friendly areas often provide English service. In less international locations, language barriers create challenges.

Fees: Monthly fees, transaction fees, ATM fees, and international transfer fees vary dramatically.

Integration with international systems: Can you receive international wires? What do they cost?

Expat-friendly reputation: Some banks specialize in foreign residents and make the process easier.

Popular Expat-Friendly Banks by Region

Europe:

• HSBC (international presence, expat services)
• Barclays (UK)
• BNP Paribas (France)
• Deutsche Bank (Germany)

Asia:

• HSBC (strong presence across Asia)
• Citibank (available in major Asian cities)
• DBS (Singapore)
• Standard Chartered

Australia:

• Commonwealth Bank
• ANZ
• Westpac
• NAB

Currency Exchange and International Transfers

Moving money between countries gets expensive if you use wrong methods.

Avoid Traditional Bank Transfers

Your US bank charges $25-50 for international wires. They use terrible exchange rates (marking up 3-5% above mid-market rate). On a $5,000 transfer, you lose $150-300 to fees and bad rates.

Foreign banks charge receiving fees (€10-30 typically). Between sending bank fees, receiving bank fees, and bad exchange rates, traditional bank transfers are the worst option.

Use Transfer Services

Specialized money transfer services offer much better rates and lower fees.

Wise (formerly TransferWise):

• Uses mid-market exchange rate
• Transparent fee structure (usually 0.5-1% for most currencies)
• Fast transfers (often 1-2 days)
• Multi-currency accounts available
• On a $5,000 transfer, saves $100-250 compared to traditional banks

Revolut:

• Multi-currency account
• Good exchange rates for monthly limits
• Instant transfers within Revolut network
• Some fees above certain monthly amounts

OFX:

• Good for larger transfers ($5,000+)
• Better rates than Wise for large amounts
• No maximum transfer limits

Western Union/MoneyGram:

• Fast but more expensive
• Useful for emergency transfers
• Not ideal for regular use

For regular transfers between countries, Wise is hard to beat for value and convenience.

Multi-Currency Accounts

Services like Wise and Revolut offer multi-currency accounts. You can hold balances in USD, EUR, GBP, and other currencies simultaneously.

Benefits:

• Exchange money when rates are favorable
• Avoid repeatedly exchanging back and forth
• Receive payments in multiple currencies
• Pay bills in different currencies

Many expats keep most savings in USD but maintain working balance in local currency for daily expenses.

Managing Currency Exchange Risk

Exchange rates fluctuate. Currency movements can significantly affect your purchasing power.

When Paid in US Dollars

If your US employer pays you in USD but you’re spending pounds, euros, or other currencies, exchange rate changes affect your real income.

Example: Your $5,000 monthly salary converted to £3,850 when GBP was at 1.30. When GBP strengthens to 1.25, that same $5,000 only gets you £4,000. You’ve effectively gotten a raise.

But when GBP weakens to 1.35, your $5,000 only gets £3,700. You’ve taken a pay cut even though your salary didn’t change.

Strategies:

• Keep 2-3 months of expenses in local currency to smooth short-term fluctuations
• Exchange money regularly (monthly) rather than once in lump sums
• Don’t try to time the market perfectly. Consistent regular exchanges average out rates.
• Consider negotiating partial salary payment in local currency if possible

When Paid in Local Currency

If you’re paid in your host country currency but have US financial obligations (student loans, mortgage, etc.), you face the opposite risk.

Strategies:

• Transfer money to US accounts monthly for obligations
• Keep US emergency fund to avoid forced exchanges at bad rates
• Plan ahead for major US expenses rather than making rushed transfers

Credit Cards and Payment Methods

Using US Credit Cards Abroad

US credit cards work internationally but with considerations.

Foreign transaction fees: Most cards charge 2-3% on international purchases. Cards with no foreign transaction fees save significantly over time.

Chip and PIN: US cards traditionally used chip and signature. Europe and much of the world use chip and PIN. Most US cards now support PIN, but verify yours does.

Acceptance: Visa and Mastercard are widely accepted. American Express less so, especially outside major cities. Discover is rarely accepted internationally.

Cash advances: ATM withdrawals with credit cards come with cash advance fees (3-5%) plus interest from day one. Use debit cards for ATM withdrawals, not credit cards.

Getting Local Credit Cards

Building credit in your new country takes time since your US credit history doesn’t transfer.

Start with:

• Secured credit cards (deposit collateral)
• Store cards from local retailers
• Cards offered through your employer’s banking relationship

After 6-12 months of payment history, you can qualify for standard credit cards.

Some card companies (American Express) transfer card membership across borders. If you have Amex in the US, you might qualify for Amex in your new country immediately.

Mobile Payment Systems

Apple Pay, Google Pay, and Samsung Pay work internationally on phones set up in the US. They use your US credit cards.

Local payment systems vary:

• Europe: Contactless payment is ubiquitous
• China: WeChat Pay and Alipay dominate (challenging for foreigners to set up)
• Japan: IC cards (Suica, Pasmo) for transit and retail
• Australia: Tap-to-pay credit/debit cards everywhere

Research your destination’s payment norms and set up accordingly.

Tax Implications of International Banking

Financial accounts abroad trigger US tax reporting requirements.

FBAR (Foreign Bank Account Report)

If your foreign financial accounts exceed $10,000 in aggregate at any point during the year, you must file an FBAR.

This includes:

• Checking accounts
• Savings accounts
• Investment accounts
• Pension accounts in some cases

The $10,000 is combined across all accounts. Two accounts with $6,000 each require FBAR filing.

File annually by April 15 (automatic extension to October 15). Filing is electronic through FinCEN.

Penalties for not filing are severe—$10,000+ per violation even for non-willful failures.

FATCA (Form 8938)

If foreign financial assets exceed certain thresholds, you must file Form 8938 with your tax return.

Thresholds for US residents abroad:

• $200,000 on last day of year OR
• $300,000 at any point during the year (single filers)
• $400,000 on last day OR $600,000 at any point (joint filers)

Form 8938 asks for more detail than FBAR. Both might be required depending on your situation.

PFIC Rules

Foreign mutual funds and certain investment accounts face PFIC (Passive Foreign Investment Company) rules creating complex tax situations.

This is why many expats keep investments in US accounts rather than investing through foreign brokerage accounts.

Consult a CPA specializing in expat taxes to navigate these rules.

Investment Accounts Abroad

Challenges for US Citizens

US citizens face significant challenges investing abroad.

Many foreign banks won’t open investment accounts for US citizens due to FATCA reporting requirements. They don’t want the administrative burden.

Investments in foreign mutual funds trigger PFIC rules making tax reporting nightmarish.

US-based brokerage accounts remain open to US citizens abroad, but you need to maintain a US address.

Maintaining US Investment Accounts

Keep your US retirement accounts and investment accounts active:

• 401(k)s and IRAs can stay in the US
• Taxable brokerage accounts continue working
• Use your US address for these accounts

You can manage these accounts online from anywhere. US investment accounts remain more tax-efficient for US citizens than foreign alternatives.

Retirement Accounts Abroad

If your foreign employer offers pension or retirement accounts, understand tax implications.

Some foreign pension systems create US tax complexities. Tax treaties might provide relief, but each country differs.

Work with tax advisors who understand both US and host country retirement systems.

Practical Money Management Strategies

Successful expat banking involves building systems that minimize fees and hassle.

The Multi-Account System

Most expats end up with:

• Primary US checking account for US direct deposits and bills
• US savings account for emergency fund
• 2-3 US credit cards
• Wise or similar transfer service account
• Local checking account for daily expenses
• Local savings account (maybe)
• Local credit card eventually

Sounds complex but each serves specific purposes.

Monthly Money Flow

Develop a routine:

1. Receive salary (US or local account depending on employer)
2. If paid in USD, transfer amount needed for monthly expenses to local currency via Wise
3. Keep 2-3 months expenses in local currency
4. Pay local bills from local account
5. Pay US obligations from US accounts
6. Transfer excess savings to whichever currency you prefer for long-term savings

Emergency Access

Maintain multiple access methods:

• Keep credit cards from different issuers (if one locks, you have backup)
• Have both debit and credit cards
• Maintain accounts at different banks
• Keep some cash in both USD and local currency
• Have emergency transfer capability via service like Western Union

Avoid Fees

• Never use ATMs that charge their own fees (on top of your bank’s fees)
• Never accept dynamic currency conversion (paying in USD instead of local currency—always choose local currency)
• Don’t exchange money at airports or tourist exchange offices
• Don’t use credit cards for ATM withdrawals
• Use bank ATMs instead of independent operators when possible

Making International Money Management Work

Banking across countries involves complexity, but with proper setup you’ll develop routines that work.

When you’re planning your international move, remember that financial access and money management are critical components. Working with companies experienced in international relocations can help you understand what to expect.

Contact Us About Your International Move

Frequently Asked Questions

Should I close my US bank accounts when moving abroad?

No. Keep US accounts open. You’ll need them for US financial obligations, receiving US-source income, and maintaining US financial identity.

How do I get proof of address to open a bank account?

Bring your lease agreement, employer letter, utility bill if you have one, or temporary accommodation documentation. Some banks accept alternative proof for new arrivals. Ask specifically what they accept.

Will my US bank close my account if I move abroad?

Some banks might, especially smaller regional banks. Larger banks with international presence generally don’t. Notify them of your move and confirm your account will stay open.

Can I use Venmo, Zelle, or Cash App abroad?

These apps typically require US phone numbers and US bank accounts. They work for US transactions but aren’t useful for local payments in your new country. You’ll need local payment apps.

What’s the best way to send money to family in the US?

Use Wise or similar transfer service. Bank wires work but cost more. Avoid services like Western Union for regular transfers—they’re expensive.

Do I pay taxes on currency exchange gains?

Generally no for personal accounts and reasonable amounts. If you’re making significant gains through currency speculation, consult a tax advisor.