The Banking Traps That Drain Expat Accounts Quietly

Let me tell you about the most annoying money I ever lost. I kept my UK bank account open when I moved to Thailand. I thought it would be useful for occasional payments back home. What actually happened? My UK bank started charging me a 12-pound monthly fee for "non-resident accounts." Then my Thai bank charged me 150 baht every time I transferred money internationally.

Every time you use your home-country credit card abroad, you likely pay a foreign transaction fee of 1 to 3 percent. Sounds small, right? But it adds up fast. If you spend $5,000 per month abroad, that is $75 to $150 per month in fees, just for the privilege of using your own money.

Here is where it gets really sneaky. When you withdraw cash from an ATM abroad, you often pay TWO fees. First, your bank charges you for using an out-of-network ATM, typically $3 to $5 per withdrawal. Second, the local bank whose ATM you are using charges you a flat fee or a percentage. In some countries, these fees are displayed upfront. In others, they are hidden in the exchange rate.

When you pay in a foreign currency, your card usually offers you the choice of paying in the local currency or your home currency. Always choose the local currency. Here is why. The bank or merchant will offer you a terrible exchange rate if you pay in your home currency. They make a significant profit on that conversion.

Many banks charge monthly fees if your balance drops below a minimum threshold, typically $1,500 to $3,000. Some charge inactivity fees if you do not log in or make transactions for several months. Some charge quarterly or annual fees just for maintaining an account that is considered "international."

Sending money between countries is shockingly expensive if you use your bank. Typical wire transfer fees range from $25 to $50 per transfer, and the exchange rate offered is often poor. But there are better options. Wise (formerly TransferWise) offers mid-market exchange rates with low transparent fees.

Your money deserves as much planning as your visa and housing. Before you move abroad, audit your current banking situation. What fees do you pay for international use? What cards do you have? What is your plan for receiving money locally? A few hours of banking research before you leave can save you thousands of dollars over the course of your expat life.