 Banking
in Spain
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 Dear
Dr. Don,
My parents are retiring and moving to Spain for
two years. What do you suggest is a good banking strategy for managing
their everyday money needs? Should they establish an account in
Spain, with a Spanish banking institution, or handle banking via
Internet wire transfers, ATM cards, credit cards, etc.? -- Cassi
Currency
 Dear
Cassi,
When in Spain, bank like a Spaniard. Expatriate
Web sites typically recommend that you open an account in the country
you're living in, if you plan to be there for more than three to
six months. SpainExpat.com
has useful information about opening an account as does JustLanded.com.
It's also possible that your parents' U.S. bank has an international
account that will allow them to manage there financial needs in
both countries with one account.
Your parents need to manage transaction costs, currency
conversion and transaction convenience during the time they spend
in Spain. Between dynamic currency conversion (DCC) issues, foreign
transaction charges and provider fees, credit cards issued by U.S.
providers have become more difficult for the cardholder to manage
the cost of transactions. Using a U.S.-based debit card has some
of the same issues for point of sale purchases and cash withdrawals
in a foreign currency. The Bankrate feature, "Are
you overcharged for overseas purchases?" has more information
about using credit and debit cards abroad.
It'll take a little work upfront, but they'll figure
out the best way to purchase items, pay bills and transfer funds
while enjoying their time abroad. It's a good idea to have enough
financial flexibility that if one form of payment isn't available
they have access to another that is. By all means bring the U.S.
credit and debit cards, but look to establish foreign denominated
debit and credit relationships with Spanish financial institutions.
A big variable in the equation is when to convert
currency from dollars to euros. If the euro appreciates against
the dollar over the next two years they would be better off converting
their expected expenses upfront. I don't know the answer but EverBank
does offer a free daily currency newsletter, "The Daily Pfennig,"
and a pretty neat world map showing expected changes in currency
values.
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