Home Country Things You Better Hold On To.
(Updated 16 September 2021)
Just recently I was telling a reader that writing about moving to the Philippines seemed very boring to me.
I had gotten very old and stale.
But then I just had a conversation with a fellow US military retiree here in the Philippines and I realized there’s a whole raft of things out there I should be writing about.
One thing people always ask about over the years I have been writing about living in the Philippines is:
“What to Bring from the US and What to Leave Behind”
Well, I think rather than a blog article someone could write a whole book on that subject. Sorry, that won’t be me.
But one thing that did come up with my retiree friend recently is something many westerners who move to the Philippines don’t think about a lot when packing their moving boxes.
Home Country Bank Accounts and Credit Cards
First, let me clarify something. Since I’m an American I tend to write everything based on what I know about the USA, Only seems natural.
But many of my readers here are from other counties. That’s great, I love it that things can get so international here at times. But please do realize, the advice I give about the way things work in the USA may not be valid in other countries, so always check with local experts, OK?
Also, I am not a lawyer, an accountant, a financial planner, or any other sort of licensed or degreed expert, so when you need an expert, use one.
You wouldn’t go to your friendly car mechanic to have your tooth pulled, would you?
Now The Day Has Come To Make Your Philippines Move
I’m sure most of you have some sort of checklist or to-do list for your move.
If not, sit down and make one before you start filling boxes.
Now if there’s an item on your list that says “close your US bank account“, stop and think a moment before you take action.
Maybe you feel that you’re making a clean break with the USA and that you’re pretty sure you are never coming back. That’s fine.
Or maybe you feel you’re really broke and the small amount left in your US bank account to maintain it in an active status is money you need elsewhere. Well, that’s OK too.
But Before You Burn That Bridge Consider This:
If you give up your US bank account and leave the Philippines, life will be just dandy for you … unless you ever need a place for someone to pay you.
Or a place to pay others from… say some utility bill or credit card account which had been forgotten.
There could be a lot of reasons that come up over the first year or so why you would want a bank account in the USA.
But if you are outside the USA, and not physically available to open a bank account, you may really find yourself out of luck.
It Is Close To Impossible To Open a US Bank Account From Outside The USA.
In my own case I never even dreamed of closing my US bank account when I moved.
First of all, my monthly pension payments go directly into my US account.
Many sources of US pensions (military pensions, for example), will NOT pay into a non-US account. Ouch.
Second, my online profit-making efforts need a place to be deposited. Many companies will send money they owe you anywhere in the form of a check, but it takes a long time and often involves a lot of fees.
Others refuse to do business with anyone overseas.
I can pay anyone (business or personal) in the USA with a check from my US bank account, for free, sent out overnight by request from my Internet banking account.
And Because I Kept A US Bank Account It Is Easy To Keep US Credit Cards
Now I can hear a few exclamations out there in “reader land” already.
“Why have a US credit card if you are living in the Philippines”?
“Isn’t credit card debt dangerous, financially”?
And I’m sure you can think of a few more.
Personally, I keep several US credit cards for two main reasons:
Reason 1: Buying Things Online In The USA:
If you want to send a gift to a family member or friend back in the USA, what could be easier than ordering online, having it shipped to the recipient, and paying for the whole process almost instantly with your US credit card?
Once you make a purchase, you’ll have a balance to be paid on your US card. So how do you handle that?
Simple, just use your bank’s online bill pay service to send the credit card payment before it’s due. It really couldn’t be easier.
Now, a question some of you might have after reading this far is, wouldn’t it be just as easy to have a Philippine credit card?
That’s a good question.
The answer is, yes you can get a card here if you have a Philippine bank account.
I have a Mastercard issued by my Philippine bank, BDO (Banco de Oro). They are a good company and have taken decent care of me, and I use my card often. Beats carrying around cash and then always needing to find an ATM to replenish.
But I never carry a balance from month to month on this card. I pay it in full every month,
36 percent interest rate, that’s why. Ouch.
If you are in a bind and have to carry a balance and make monthly payments on a card, by all means, use a US-issued card. The rates are markedly lower.
Also, think about The Exchange Rate
Suppose I decide to buy one of my children in the USA a birthday gift.
I go on Aamazon.com, shop, select something and when it comes time to check out, I pull out a credit card.
If it is one of my USA-issued credit cards, no problem.
The card gets charged for the exact amount of my purchase, and later in the monthly billing cycle, I go online with my bank’s bill pay service and electronically pay the balance off on the card. Easy-peasy.
But what if I use my Philippine BDO Master card?
Well, everything still works, but the Philippine card only uses Philippine Pesos.
So BDO has to “buy” dollars to settle the charge to the US merchant.
I have to lose out on whatever rate the bank has to pay to “buy dollars” to pay the bill at the merchant, and then I have to live with whatever rate I have to pay to convert (or “buy” Philippine Pesos to pay the Philippine card balance.
I loser twice on every purchase.
Assume the charge is $50 USD.
At the official exchange rate right now as I write this, that would be 2498 Pesos.
(This will be different almost any day you happen to read this. Sometimes different by a large amount.)
But to get those dollars the bank has to “buy” them at 53.55 Pesos per Dollar.
This means my .y $50 gift purchase now costs me almost $54 USD and there will be a $3USD (or higher) Foreign Transaction Fee added on by MastercardCorportation, making my $50 gift cost me about $57 dollars
Then, before the end of my current billing period … if I don’t want to pay that ridiculous 36% interest, I have to pay the balance on my card. I’ll owe at least P2850 on the card, and remember I get paid in Dollars, to Pesos, soI have to buy pesos to pay my balance off.
In other words, if I use my Philippine credit card, I lose both ways on the exchange rate.
USA All The Way For Me
One other issue that just came up. An online friend has been living here in the Philippines for about 17 years now. He long ago paid off and got rid of his US Credit cards.
Now he wants to take a vacation trip to the USA. He kind of figured that it would be handy to have a US credit card for things like car rentals, buying domestic travel tickets, etc.
(You basically can not rent a car for cash, and certainly get flagged for special TSA attention if you try to buy airline tickets with cash).
He called his bank in the USA. The same one where his pension has been being paid for 17 years now and asked for a credit card. Know what they said?
Because my friend has not had a credit transaction for more than 7 years, officially he has no credit history and thus the bank is not allowed to issue him a credit card. Sorry ’bout that.
In Another Article, I’m Going To Explain Why A US Credit Card Might Save Your LifeHere In The Philippines.
So aside from a US bank account and a US credit card, can you think of any other Home Country Things You Better Hold On To?