Expat credit and debit cards

It is estimated that more than 250,000 Britons move abroad each year, yet a staggering 81 per cent don’t give their banking needs a second thought before they leave the country, and as many as 60 per cent of people admit that this is largely because they don’t understand how offshore accounts work.

It is important to set your finances in order before you move, and there are a number of good reasons why a UK national living overseas should hold an offshore account as their primary way of accessing finances.
Offshore current accounts, not to be confused with offshore savings accounts which usually require notice to withdraw money, are designed to allow participates to pay their monthly salaries and/or pensions in, facilitating the transfer of funds to a recommended second account in their country of residence to cover day-to-day living and pay utility bills.

At the same time the account holder can take advantage of tax relief on money kept offshore and receive a better rate of interest on the balance.
Tony Wilcox, managing director at Bank of Scotland International, advises; “If you are planning to leave the UK to live temporarily or permanently overseas, you need the right products and services in place. When moving abroad there are many aspects of life which people will have to adjust to and personal finance is no exception.”

Differences and advantages

Banking with an offshore provider offers customers a central, convenient and secure account for their funds, meaning that wherever in the world they travel – be it back to the UK, or upping sticks and moving even further afield – their banking always remains constant with unlimited, worldwide access to money.

Expatriates will find that the major benefit when switching from onshore banking is the ease with which their finances can be organised. Penalty charges are a common consequence of regularly accessing a UK-based account from overseas and withdrawing or transferring sums of money can subsequently become highly problematic. In addition, you forfeit the face-to-face support you may have grown accustomed to, and unfortunately you cannot simply walk into a Spanish branch of your local bank and get the same service you did in the UK.

This is not to say you cannot keep an account open with your current provider, just that you should explore the advantages associated with switching to a service which is more suited to your new circumstances. Most British banks now offer a comprehensive offshore plan which can easily run in tandem with your existing bank account, should you want to keep your old one open as a safety net.

This option is ideal for most expats opening a current account as many people feel far more comfortable dealing with a well-known name which boasts a strong credit rating and the ability to deal with its customers in English. For added peace of mind, account holders can rest safe in the knowledge that they are banking with a company they trust, and that the bank in turn is familiar with their previous financial history, thus understanding their revised banking needs as an offshore client.

Another advantage of opening an offshore account with a British bank is that you are able to maintain a credit rating in the UK, which is necessary if you are intending to move back into the country at some point in the future.

Interest rates and taxation

It is also likely to operate within a lower cost base, meaning customers can benefit from higher interest rates than a standard current account back in their home country. An additional plus-point is that transactions can be made in numerous currencies and customers can benefit from further preferential rates and terms on their savings.

It is important to remember that any interest accrued in an offshore account will still have to be declared on a UK tax return if you are not officially a permanent resident of another country. A good example is when someone spends majority of their time, say 260 days, in Spain each year, but the remainder, 105 days, in the UK meaning that they are still liable for British taxes, as well as any applicable in the other country.

Credit cards

You can still use a UK credit card and shop around for the best deals, just make sure that the company accept expat customers and will send the card abroad, and that you are able to pay off the outstanding balance through your offshore account.

Most cards displaying either the MasterCard or Visa logos are universally accepted worldwide so there is little chance of hidden charges when using it overseas, although it is likely that fees will be higher for cash withdrawals, or they may not be permitted at all. If you are uncertain in any way, it is best to check with your lender.

On the whole, offshore current accounts offer the same benefits as domestic current accounts do, but you can use your card in any country without penalty. One major worry which stops people making the switch is that they will lose the level of support and advice they were used to. Don’t be fooled into thinking this is the case though, as most banks will have a strong team of independent financial advisors who are able to offer top class support as well as a range of solutions to any financial queries you might have.