Missions Blog

As missionaries we sometimes need to pay cash for items that we could easily buy with our credit/debit card or check in the US. So, it’s not uncommon for us to withdraw large amounts of cash using an ATM to pay for capital items. At times we’ve had difficulties taking out as much cash as we need, so we’ve planned our ATM withdrawals with that in mind.

The reality is that there are limits involved with ATM cash withdrawals, but with some knowledge, trial and error, there are still ways to get the cash you need.

One limit is the daily limit on withdrawals allowed by your bank. For example, ECCU’s standard daily (24hr) ATM limit for withdrawals is $1010 USD, or the available balance (whichever’s lower), and for POS (point of sale) withdrawals, it’s $2500 USD.  Another limit is the local limit, this can be either daily or per transaction, imposed by the local bank whose ATM machine you are using.  You need to keep these limits in mind when making a large total withdrawal. 

We’ve found in our host country that we can withdraw about $600 USD at a time from any ATM. Often ATM limits can be per transaction, per ATM or per bank, so if you need more than what you are allowed to withdraw, it may work to try another transaction immediately at the same ATM. If that doesn’t work, try a different ATM, or a different bank location. You might have to visit multiple bank ATMs to make all the withdrawals you need.

Sometimes, there are daily withdrawal limits within the host country. In our host country, banks have failed several times, creating a run on the banks. So, in order to avoid that possibility again, the country created nationwide limits on daily withdrawals. For example, we can take about $375 per day every day with no problem.  But if we withdraw the $600 ATM limit, then we are unable to do another withdrawal at any ATM for at least 48 hours. So, preplanning is essential for us.

You might also find having an additional account at a bank in the host country allows you to withdraw more at an ATM if you have funds in that bank. You should inquire about ATM limits at any bank where you plan to open an account. 

It might take some research and experimentation to find out what ATM limits you need to prepare for. If you wait until the last minute to withdraw a large amount of cash, you might find that it’s not possible to do so in a timely manner. In some cases and in some countries you can go inside the bank to get a cash advance at the counter using your credit/debit card and pay a high fee for the privilege. Understanding what ATM limits you face, and planning in advance for multiple withdrawals makes overseas banking easier.

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_{About Cindy Martin:}

Cindy and her husband Bill minister as Bible school and seminary teachers in Latvia, Estonia, and Finland. Cindy served as CFO at a Bible school in Latvia, and has always been interested in personal finances, especially accounting and IRS reporting. The Martins also teach at the Indian Bible College in Flagstaff, AZ. Before they began cross-cultural ministry, they served as pastors of Bethel Bible Church in Evergreen Park, IL for 9 years.

Bill & Cindy have four children, Ben, Beth, DeeAnna & Hannah.

When we moved to Africa four years ago, I took my first real trip through the grocery store to look for items that I actually needed for our home. The store near where we lived had an amazing variety! You could buy everything from a loaf of bread to a new kitchen table and everything in between.

There were lots of similarities between my shopping experience there and in the United States, but one difference that I didn’t anticipate was prices. It was a lesson in cultural economics. I remember picking up a medium box of corn flakes, doing the currency conversion, and discovering that it would cost me almost $10 USD compared to the $3 I’d probably pay at home. On the other hand, I remember visiting the butcher and discovering that we could buy a nice piece of beef filet for less than it would cost at home. We began to see this with all kinds of other things, too.

Economies are cross-cultural, too

I had to throw out my presuppositions about how much something should cost. The overall buying power of the country based on wealth and population, cultural values, available local products versus imports, and taxes – all impact local prices. I guess before living in an African country, I had the idea that if a country had less wealth, then products would be cheaper. What I learned was that while labor for services was often less, products (especially those requiring some kind of manufacturing or requiring import) were usually more expensive and fewer people could afford them. The supply is less because the demand is less, so the price is higher.

Understanding the cost of living where you live is important as you budget your funds. The 2012 results from a cost of living survey show that 13 African cities are in the top 50 most expensive cities in the world!  Luanda, Angola, in southern Africa, was listed as number two with one of the highest housing costs in the world (higher than Paris and New York City). Constantly changing currency exchange rates add another complication

Explaining economic differences can be a challenge

When missionaries travel abroad, it can sometimes be difficult to adequately explain differences in expenses between where they serve and where they are from to their financial support team. Some donors may feel that the missionary needs to raise too much money for the location they are going to. Or, maybe something that is very inexpensive where a missionary serves seems extravagant to a donor because it is expensive in the missionary’s home country.

It’s important to remember that every economy functions differently. Each needs to be evaluated from within its own context. Thankfully, many missionaries have financial advisors that help them construct budgets to compensate for these differences. However, even with advice the reality of the economy in a new place can still seem very strange at first.

As you’ve traveled abroad, what expenses have surprised you? What has been more or less than you expected?

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_{About Heather Pubols
Heather and her husband, Jeff, have been serving in missions using their skills in communications and computers for more than a decade. Professional communicators serve a vital role in keeping the global church informed about how God is at work around the world. Computer technicians help keep their missionary colleagues able to perform their work without technical hindrances. Heather and Jeff are thrilled to be able to use their gifts to help further the spread of the gospel. Learn more about them on their personal blog: thepubols.com}

Serving internationally, it’s important to know what the rules are surrounding foreign accounts and assets. I’m not a CPA but I’ve spent some time researching tax laws and IRS reporting requirements. As tax season is in full swing, I thought fellow missionaries might be interested in what I’ve discovered.

You may be aware that back in 2003 the IRS instituted a reporting system for any American who had bank accounts overseas.  If you have had $10,000 or more in such an account at any time during the year, or have had control over the money and your signature is required for transactions, you are required to report that to the IRS.  The FBAR (Foreign Bank and Financial Accounts) as it’s called, is part of the Bank Secrecy Act intended to combat money laundering and other illegalities. You’ll report this information on form TD F 90-22.1 and it is not considered confidential since it is shared among governmental agencies.  Reporting is done by June 30th each year for the previous year.

Furthermore, as of March 2012, if you have assets in your country of ministry in bank accounts, stocks, bonds, other securities, or interest in financial institutions meeting IRS guidelines, then Form 8938 should be filed with your tax return. The purpose of this form is to help the IRS track tax evasions by individuals with money in foreign accounts.  For most individuals or couples, reporting is necessary if you have assets of between $50,000 and $600,000.  Most of us probably don’t have that much in assets, but it’s worth noting just in case you, or someone you know does.

If you have a bank account and a large amount of assets in a foreign bank you will be required to file both forms.  If you have missed filing either of these forms, or aren’t sure if you qualify to file, talk to your accountant or check this IRS page. You can make up reporting if you failed to report out of ignorance, but you will still be liable for any penalties or, in the case of Form 8938, taxes that were owed.

If your country of ministry has a good banking system, then the way around these forms is to keep your money in a US bank, like ECCU, and withdraw funds as they are needed at an ATM in your country.  This avoids keeping reportable funds in foreign banks, and keeps you further off the IRS radar.

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_{About Cindy Martin:
Cindy and her husband Bill minister as Bible school and seminary teachers in Latvia, Estonia, and Finland. Cindy served as CFO at a Bible school in Latvia, and has always been interested in personal finances, especially accounting and IRS reporting. The Martins also teach at the Indian Bible college in Flagstaff, AZ. Before they began cross-cultural ministry, they served as pastors of Bethel Bible Church in Evergreen Park, IL for 9 years.}

About a year ago my husband and I were in Europe for some work and meetings with our mission agency. We’d been through Germany several times before, and we would often pay for purchases using our credit cards to avoid steep cash exchange fees and the hassle of carrying cash. However, this time we noticed something different. Most places would not accept our US credit and debit cards. A brief trip to Denmark proved to be more difficult with even fewer merchants accepting our cards. Even to pay for parking at a kiosk required us to ask our Danish friend to use his debit card. I felt frustrated.

The source of our problem was that our debit and credit cards were not equipped with a chip. EMV (which stands for Europay, MasterCard, and Visa) cards look very similar to the magnetic strip cards we’re used to, except they have a secure microchip on the front. Payments are made by inserting EMV cards into a special device that reads data from the chip rather than a magnetic strip.

While EMV card adoption is increasing everywhere, it is most prevalent in Europe and Asia. By the middle of 2012 more than 80 percent of cards and more than 90 percent of card payment devices in Europe were EMV compliant. Unmanned payment kiosks like those found at gas stations, tollbooths, ticket machines, or parking facilities are often equipped only with chip and PIN card devices.

In the US, EMV cards are not yet readily available. Most merchants do not yet have the technology to accept EMV cards that do not also have a magnetic strip. Some financial institutions in the US will begin issuing cards that contain both microchips and magnetic strips in the next year or two, but the additional fraud protection the chips provide can only be realized when merchants upgrade their terminals to accept the technology. In the meantime, ECCU takes special care to monitor card activity for possible fraud, and it’s always encouraged to regularly monitor your account and card activity for unauthorized transactions.

If you have an ECCU debit or credit card, it will still work to withdraw local cash at any ATM, and you’ll still be able to take advantage of the great ECCU exchange rates. However, if you don’t want to pay with cash, and your ministry requires travel or work in Europe or Asia, take some time to research and then acquire a chip and PIN card. We did. I’m looking forward to our next trip toEurope being without the credit card frustrations.

Learn more about chip and PIN cards.

“Out with the old and in with the new!” That may be good advice for spring cleaning, but it may not always be the best money-saving counsel for travelers.

Consider the once ever-present travel agent.  It used to be that you could hardly imagine planning a trip of international import without the help of a world-wise agent and their trusty travel brochures. Then came the internet and suddenly we can plan our own itineraries and book our own hotels in Rio or Rome while based in Reno. Travel agencies shut down right and left, at least where the Internet was easily accessible. I know. I too went from calling my agent to online with a sense of global pride.

But sometimes, talking to a true travel professional is just the ticket.  So, when I get ready for a trip with several destinations in mind, I go to back to my trusted travel agent. Sure, if I’m planning a trip from LA to Chicago, I’ll most likely book the flight on my own. But I’ve found that after doing several hours of research online, a call to my agent will often save me money, and give me peace of mind. Consider a recent experience. I went online to several “discount” favorites to check international flights and prices. I’m a frequent flier so I try to stay within one of several airline groups. The cheapest flight on my preferred airline from LAX to Bangkok was over $1700—too much. So I looked up the same flight on the airline’s dedicated site and found a seat available for about $1450—feeling much better. But then I made a call to my travel agent who is a flight specialist. She returned the call an hour later with a ticket for $1220 plus a $40 service fee.

My do-it-yourself spirit keeps me checking for savings online. But now that I’m on my fifth international trip in eight months, I’m becoming a new believer in an old stand by… Travel Agents!