French Bank Accounts and Money Management Abroad

You will need a way to manage your Paris money. Depending on how long you will be in Paris and the purpose of your stay, you will  need either 1) A French bank account, or 2) A cheap, convenient way to access funds from your American bank back home.

I don’t recommend a French bank account for anyone living in Paris short term (6 months or less). Find out why, and learn how you can set up free and easy options to access your funds back home.

Getting a French Bank Account

For a French bank account, you will need proof of an address in Paris. Apparently, a France Telecom or Electricité de France (EDF) utility bill in your name is the golden ticket [a copy of your lease as proof of address may not be enough]. This requirement brings up two issues.

1)      The electric or phone bill is usually not in the tenant’s name for vacation rentals / furnished apartments. If you plan on renting an unfurnished apartment, you can’t do so without a French bank account, and you can’t open a French bank account without a utility bill from your French apartment – and thus begins the great paradox of French bureaucracy.

2)      You have to live at the Paris address for 2-3 months before you even get your first utility bill to show to the French bank.

The only reasons I can see to bother with a French bank account are if you are establishing residency in France for the long term and will need to pay monthly utilities electronically or by check (or get a local cell phone) , or if you are doing some type of work where you will be receiving regular paychecks that you need to deposit. (For infrequent checks, you can just get an endorsement stamp and mail them to your home bank for deposit, or get a bank account at the French post office if you absolutely need one. You can also get money orders there.)  For temporary stays in Paris, it’s much easier to think of yourself as an “long-term tourist” and focus on setting up free and easy ways to access your funds back home.

Getting Check Cards and Credit Cards to Use in France

Did you know that nearly all U.S. banks charge a “Foreign Transaction Fee” (usually 3% of the purchase price) on any purchase made in a currency other than U.S. dollars? That means if you swipe your check card or credit card at a Paris Starbucks, your bank charges you a 3% fee on top of the price of your Frappuccino. (Don’t forget to factor in the unfavorable exchange rate on top of that.) Think about how many types you would make purchases with your card, and you can see how these fees can quickly snowball into hundreds of dollars. Thankfully, there are several solutions for avoiding these fees, but first, I want you to call your bank and credit card companies, and ask them a few questions.

  1. What are your foreign transaction fees?
  2. What are your foreign ATM charges? (You’ll be charged on both ends for ATM withdrawals, the bank you withdraw from, and your home bank).
  3. What is your wire transfer fee, and can I do wire transfers online/over the phone? (You might need to wire funds to your Paris landlord if they don’t accept other forms of payment, so inquire about it. )
  4. While you’ve got your bank on the phone, confirm your daily ATM withdrawal limit and Check Card purchase limit to make sure it will be sufficient for your needs abroad.

OK, what’d your bank say? They charge 3% on foreign transactions, right? At the time of writing, the only major credit card company that does not charge foreign transaction fees is Capital One. If you want to enjoy free credit card transactions while in France, and you’ve got time to spare before your trip, you can apply for a Capital One card. Allow time for the card to arrive before your travel date.

Another option, and the one I personally went with, is to open up a Charles Schwab High Yield Checking Account, which comes with a Visa check card. Schwab doesn’t charge any foreign transaction fees or ATM fees (as long as you use an ATM network that’s listed on the back of your card – PLUS, Interlink, etc.). You will incur ATM fees from the French bank, but Schwab will automatically calculate and refund them to your account at the end of the month as a lump-sum credit. You can fund this account (and replenish it with online banking transfers) by linking it to your regular checking or savings account, and “Voila!” Fee-free transactions!

To link between Schwab and your regular bank account, you’ll need to mail in a blank check (a Direct Deposit form will suffice for ING and other online-only bank accounts), and mail in an Electronic Funds Transfer Enrollment Form to Schwab. Schwab says to allow 2 weeks before making the first transfer to fund the account. (As part of the enrollment process, you will have to open a Charles Schwab brokerage account, but you can leave it sitting empty.)

As a nice bonus, Schwab’s Visa check card offers a warranty and insurance program for purchases made with the card that my regular Visa credit card doesn’t offer. There’s also a free trip insurance benefit if you purchase your plane tickets using the card. So if you haven’t started making your arrangements, you might want to get your Schwab card first and use it to book your travel.

Some people choose to open an account at an international bank such as Citibank or HSBC to avoid foreign ATM fees. But French ATMs are notoriously unreliable, and I prefer being able to use any in-network ATM in Paris rather than roaming around the city trying to find an HSBC ATM that’s properly functioning. Also, be aware that you won’t be able to just stroll into a bank branch an get customer service. International bank branches are mostly set up for business and commercial purposes. If you do decide to use an account with a global bank, make sure your ATM card has a 4-digit, all-numeric PIN.

One more option is the Travelex Cash Passport card, which is a prepaid debit card. You load it up with cash and then use it as needed. Aside from avoiding those pesky foreign transaction fees on every purchase, the main benefit Travelex advertises is that the card locks in the exchange rate at the time you load it (which could either work FOR or AGAINST you). The downside is that Travelex levies ATM fees and and load fees to put money on the card.

One final note: You will need to call your bank and credit card companies and notify them to expect purchases from abroad, so that they won’t suspect fraud and decline them. When you put a travel notification on your account, it only lasts for 30 days, so you may have to do it twice — once while you make all your Paris travel arrangements from home in advance (if using that credit card to book apartment agencies, Paris hotels, etc.), and once again right before you leave for your trip. You may even have to keep calling every month if you’re spending several months in Paris.

Those are the ins and outs of managing your money in Paris.

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Tags: French Bank Account, Paris Money