Dealing with Banks and Debit Cards Internationally

Until last year, it had been so long since I’d had any personal finance issues when dealing with banks and debit cards that I almost forgot about the problems that exist. One such problem reared its ugly head when I tried to pay for a ticket back to the Philippines last year using my EON VISA debit card from UnionBank of the Philippines (UBP). The default daily spending limit was too low and I didn’t know I had to visit the bank to get it raised. Perhaps I naively thought banks in the Philippines treated debit cards the same way they do in the United States.

Direct Deposit and Bank Accounts in the Philippines

credit or debit cards
By MediaPhoto.Org (mediaphoto.org Own work) [CC-BY-3.0], via Wikimedia Commons
When I first moved to the Philippines in 2006, I had two bank accounts, one at Wells Fargo (USA) and one at Philippine National Bank (PNB in the Philippines). I had opened the PNB account in Los Angeles before moving to the Philippines to transfer a large amount of money. I wanted easy access to it when I arrived.

It wasn’t my first trip to the Philippines and I knew I would have problems using a debit card from Wells Fargo. American banks like to freeze accounts for “possible fraud” when you use their debit cards in ATM machines in the Philippines. It happened to me on an earlier trip. Sure, a simple phone call can clear it up today and it’s pretty easy to do if you have a service like Skype set up the right way. Still, who wants to deal with all that grief?

Some Americans living in the Philippines write checks against their American bank accounts and then deposit those checks in Philippine banks. The problem I have with that solution is that it can take a month for the check to clear. That means you’re always a month behind in paychecks.

I’m not sure, but I think PNB is the only bank that has branches in the United States. Other banks in the Philippines can now handle direct deposit as well as PNB. Regardless, I have my monthly pension deposited in the PNB branch in New York and withdraw it from the Olongapo City branch. The only delays that occur are during the Philippine holidays and I think the latest I received a paycheck due on the 2nd (the 1st in the United States) was on the 5th.

I once considered keeping my direct deposit payments going to a United States bank account and using my debit card in the Philippines. How do you get lost, stolen, or expired debit cards replaced when the Philippines postal service is so bad the local businesses won’t use it? I’m pretty sure the banks in the United States would balk at sending debit cards out using Fedex or some other courier service. How do you confirm the debit cards? In the United States, you can confirm them with a phone call or with one of the bank’s ATMs. These are only a couple of the issues I’d have to face. No, using debit cards issued by banks in the Philippines is a much better idea.

Debit Cards and ATM Machines

Buried in the details of every bank is the limit on how much money can be withdrawn from an ATM per day as well as the limit on spending at brick and mortar stores. What I found out back then was that while my wife’s debit card had a spending limit of about $3000 per day ($400 for an ATM), UBP had a spending limit of 20,000 pesos per day, which is about $400 (and the same amount for an ATM). My airline ticket from Phoenix to Manila was obviously more than that. When my card was declined as debit and produced an error of “insufficient funds” when used as credit, I went to the UBP website and searched until I found out why. Apparently, I could have had the daily spending limit raised, but I was in the United States at the time.

I still have two bank accounts, but one is PNB and the other is UBP. I closed the Wells Fargo account in 2010. The PNB account is a dollar account for my direct deposit and the UBP account is a peso account. I use the UBP account to withdraw funds from my PayPal Philippines account, which automatically converts from dollars to pesos. I also use it to make online purchases when I’m in the United States.

I had no issues with the UBP debit card until I tried to go above the default spending limit. While in the United States, I used it several times at ATM machines without any problems, but then I pulled out less than $400 each time.

I guess the point of all this is to be aware of the issues with debit cards when traveling internationally. It’s still better than trying to travel with cash, which is an option I had little choice about back in the 1980s.


 

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