Imagine this scenario with me: your daughter is in a car accident, is rushed to the hospital, and needs emergency surgery to save her life. The hospital, though, doesn’t direct bill your health insurance and requires prepayment, even for emergency surgery.1 Are you able, right now, to pay $10,000 in cash for the surgery? Could you get the funds quickly enough to save the life of your child?
Though I ask this question as a “hypothetical,” I know that it’s not. It may not have been because of a car accident, but it’s not uncommon that expats may be in this exact situation: needing to prepay for emergency medicine and requiring quick access to large amounts of cash.2 Having expat health insurance is crucial, but it doesn’t help you if a hospital doesn’t accept insurance or doesn’t accept your specific insurance. You can reimburse the bills after the fact, but can you pay for the surgery in the moment?
Today, I’m going to walk you through several options on how to set up your financial life so that you can quickly access obscene amounts of cash. As a general rule of thumb, I recommend that you be able to get $10,000 of cash within 24 hours. Let me walk you through how you can do that.
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Credit cards
The first line of defense for an emergency situation like this is to use a credit card. Credit cards are a perfect solution for an emergency situation because they give you immediate access to large amounts of credit and you don’t necessarily need to have that money on hand in the moment. Pay now, save your daughter’s life, and worry about how to pay off the credit card later. Especially if you have health insurance that reimburses you after the fact, credit cards can provide the cash flow to get you through a crisis until when your insurance provides reimbursement.
How to set up credit cards for an international emergency
As good an option as credit cards are, you need to do some work in advance to ensure that credit cards are an option available to you in an emergency crisis.
1. Build your credit
Medical bills can escalate quickly; even a credit card with a $10,000 limit can quickly be used up. If you only have one or two cards, then strategically apply for and open new accounts so that you can improve your total amount of available credit.3
Personally, I suggest that you try to build at least $50,000 in available credit across your credit cards, if not more.Provided you can use credit cards responsibly—never going into debt on them, always paying off the full balance each month—then there’s great benefit to having a huge amount of available credit and little downside risk. If, though, even having a credit card means that you’ll go into debt, I recommend you don’t use this option.
2. Ensure charges will go through
You wouldn’t want surgery to be delayed because a credit card was denied. So set up “travel notices” on your credit cards, have enabled text or app alerts for “fraud” so that you can quickly approve a purchase, and have handy the phone number to call to approve a purchase, or pre-approve a purchase. If you don’t know how to set up your phone to receive international texts or calls, this article can help you: 2FA or Not 2FA: The Expat’s Guide to Secure Logins.
Quick note: the chip that is read when you “insert a card” is more secure than the “tap to pay” feature. I’ve had situations where the “tap to pay” would be denied, but the “insert chip” would go through. So experiment with both if a charge is denied.
3. Have a diversity of cards
Along with bank redundancy, you want to develop a variety of credit cards from different banks and networks. This prevents a scenario where you have available credit, but can’t use the card because a certain network or bank has problems in a certain region. My first week in my host country, I found out that Chase bank cards just don’t work in my country, but others did. So, diversify your cards:
- Get cards from multiple banks: Bank of America, Capital One, Citi Bank, Wells Fargo, Barclays, US Bank, etc.
- Get cards across multiple networks: Visa, Mastercard, Discover, American Express, UnionPay, etc.
- Get cards in multiple people’s names: you, your wife, your kids, your parents (if they’re willing), etc.
- Get cards from multiple countries: Perhaps your passport country cards won’t work, but local cards can.
This diversity ensures that if one card or account gets blocked or frozen due to “suspicious activity,” you’ll still be able to function. And let’s face it, a very large overseas charge will be guaranteed to be flagged as suspicious, so you might as well prepare for it now.
4. Establish a PIN for cash withdrawals
Unfortunately, credit cards aren’t available worldwide, but you can set up your credit card so that you can use it like an ATM and withdraw a cash advance from the card. Some cards do this automatically and others don’t, so make sure you’ve set up the card to have cash advance and set up a PIN number to access it. It’s also worth contacting your credit card company to see if you can raise the ATM cash advance withdrawal limit to as high as they’ll allow.
Debit/ATM card
When credit cards won’t work, the next option is to use a debit card. You can do this either by using the card at the hospital or else going to an ATM and withdrawing the cash. This option is harder to use than credit cards, because it requires that you have sufficient cash in your account, but ATMs will work in many places around the world where a credit card won’t.
How to set up debit/ATM cards for an international emergency
1. Keep a high balance in your account.
Financial advisors suggest that you have 3-6 months of expenses saved for emergencies. If you keep this emergency fund in an account that you can access via debit or ATM card, then you’re ready to withdraw it in an emergency. If you don’t have an emergency fund that large, I encourage you to build one. It’s not easy, but it’s especially necessary as an expat.4
2. Raise your ATM limits
Most banks limit the amount of cash you can withdraw each day to a paltry sum, like $500. The above situations assume that you, alone, have enough money in a bank account to get you through the emergency. The banks are trying to limit their (and your) risk if someone steals your card. However, if you call the bank, you can usually permanently raise the limit to something much higher. Definitely do this. The permanent higher limit won’t be as high as you like, but it’s easier to pay for things with a limit of $2,000/day than $500.day.
In addition, a bank can preauthorize a very high withdraw amount on a temporary basis. If you need to withdraw $10,000 at once, call your bank to authorize it in advance. Make sure you know the number to call so that it’s seamless in an emergency. Be aware, though, that it’s sometimes difficult to get a bank to verify your identity sufficiently to do this, especially if you’re overseas. The bank office that authorizes withdraws, too, may be closed when you need it.
3. Get a diversity of ATM cards
Just like credit cards, you want to have ATM cards from a diversity of banks, diversity of networks, and multiple countries. When I last traveled, I found that my ATM cards from my passport country didn’t work, but my ATM cards from my host country did. Bizarre, but yet another reason to have bank redundancy. Read more about that here: Banking on Backup: Financial Redundancy for Expats.
What I’ve done is developed the banking so that, even without needing to call to authorize a large withdraw from one bank, I’m able to withdraw an obscene amount of cash by a series of smaller withdraws from a diversity of banks. It would be a bit annoying to have to withdraw $2,000 from 5 banks, rather than $10,000 from one, but I can do the former without calling anyone. The latter requires a phone call to pre-authorize and the bank could be closed when I need it.
4. Know your ATM limit “end of day” reset time
This is an unknown element, but the bank’s daily withdraw limits reset at the end of each “day”, so contact your bank to find out when that reset time is. With my primary bank, the reset of the day in the US is around 2pm local time, which means that I could withdraw $2,000 in the morning and $2,000 after 2pm.
5. Get multiple ATM cards
The withdraw limits for your ATM/debit card are typically per card, not per account. So, if you can establish a joint checking account with someone, you can get multiple cards. That not only gives you redundancy, in case one is lost, but it doubles your daily withdraw limit.
So, in the case of my primary bank, I can withdraw $2,000 a day and my wife can withdraw $2,000 a day. Knowing our bank reset time means that in one day, local time, I could get $8,000 total out of my account (assuming I had that much in the account, that is 😉). That will cover most emergencies.
Consider getting a joint account with your spouse (if married), with your parent(s) (if they’re willing), or with your child(ren) (if they’re old enough). None of these are uncommon and while it presents a legal risk (the joint owner does legally own funds in the account), that risk can be lower than having just one ATM card with low limits.
Cash
The above situations assume that you need to pay a large bill and you don’t already have cash on hand to pay for it. If you do have emergency cash already withdrawn from your bank and readily available, then you can just pay the bill without worrying about everything I listed above.
How to prepare your cash for an international emergency
1. Secure the cash
If you have large amounts of cash in your home, you need to hide it well so that it is safe from thieves and, ideally, also safe from a fire. Most people immediately think of a house safe, which would typically accomplish both goals. However, in a home robbery, a safe is an obvious and immediate target. If it’s a home invasion, then a criminal can force you to open the safe. Giving up cash means you lose it for good, unless the police can recover it. A credit or debit card, though, can be canceled if stolen and you don’t bear responsibility for any charges or withdraws if a criminal has your card.
An alternative is what people call a “diversion safe.” This is taking an innocuous, everyday item, and putting your cash inside it. If a criminal robs your home, they wouldn’t ever consider the item to be valuable. A couple examples will illustrate the point:
- My great-grandfather bundled up a load of cash in freezer paper, wrote “Steak” on the outside, and put it in his freezer alongside the rest of his frozen meats. No criminal is going to unwrap frozen meat in the odd chance that it contains cash.
- Jason Hanson, in Spy Secrets That Can Save Your Life suggests getting a box of copy paper, removing all but the bottom reams, fill it with cash, then put 2 reams of paper on top. Even if a criminal opened the box and removed the top ream of paper, he still wouldn’t see the cash underneath.5
Even if a home invasion, it would be hard for a criminal to know you’re not giving up your “steak” or “paper” money. Just make sure you have something to give to the criminal for them to leave, but it doesn’t have to be all your cash.
A quick note: while a diversion safe protects your cash from thieves, it creates other risks. Namely, that you forget that package of “steak” is really money and you toss it out, or give it away. Or that your Pringles can full of money, cleverly disguised in the bottom, gets thrown out by a maid. The first happened to a friend of mine, the second happened to me.
2. Save your ATM receipts
If you have large amounts of cash out of your bank and return to your passport country, you’ll likely want to put that money back into the bank. Unfortunately, banks are paranoid about large deposits of cash, so they’ll likely require proof of where the money came from. Save your ATM receipts when you get the cash out so that you can demonstrate it’s not drug money or laundered money, but money you previously withdrew.
Family, friends, or your company
The above situations assume that you alone have enough money in a bank account to get you through the emergency. While everyone should strive towards this end, the reality is that even well-prepared individuals will likely hit a limit of what expenses they personally can cover. This is when you can ask your family, friends, social organizations, etc. for help.
In this case, there’s not much to “prepare” in advance except to make sure that you’re the kind of person to whom others would gladly lend significant amounts of money. Show yourself to be trustworthy, honest, reliable, and dependable, so others would not hesitate to loan you $10,000 to cover a medical bill.
Last, if you’re an expat because a company has sent you overseas to do work for them, then use that resources as well to cover an emergency.
“Other” options
I don’t believe these options are so useful to an “average” expat, as it requires special skills or advanced planning, but I’ll mention just a couple of other options to get emergency funds.
- HELOC – If you own a home, you may be able to get a Home Equity Line of Credit (HELOC) which can stand open on your account until you need it.
- Life insurance – Depending on what kind of life insurance you have, you may be able to withdraw money from the policy, or take out a loan against the policy.
- Retirement loans – Some retirement funds allow you to withdraw contributed money without penalty (e.g. Roth IRA) and others will allow you to take out a loan agains the retirement fund (e.g. 401(k)s).
To use one of the above policies, see if your financial services provider can grant “check writing” privileges on the account; some may even issue a debit card.
The above options can be another method of emergency cash. However, since they require that you first have the policy or asset, they’re not as accessible to the average expat and so I’m only briefly mentioning them here.
Ensure everyone is ready
If you’re going to take the time to set up the above system, make sure that your spouse and responsible children also know how to access your funds. The last thing you want is to set everything up and then you’re the one in the coma awaiting surgery and your spouse doesn’t know how to access the funds that he or she needs.
Conclusion
While some of this may seem theoretical and “unnecessary”, the reality is that this is another example of The Paradox of Safety. While you may prepare this financial system and never need it, if the situation arises that you’ll need a system for getting large amounts of cash, it will be too late to prepare it. The last thing you want is for the hypothetical to become real—you have to pay for something to save your child’s life—and are unable to because your ATM limits are too low, or your one credit card is denied, or your friends know you to be untrustworthy. Prepare in advance.
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Footnotes
- Common around the world. Learn more about expat health insurance in: Expat Health Insurance Demystified: Your Essential Guide. ↩︎
- This is different than in many Western countries where laws require hospitals to provide emergency medicine, even if the patient is uninsured or doesn’t have cash. These hospitals do the medical procedures to first save a life, then attempt to get paid afterward. In much of the world, though, medical procedures have to be prepaid or else they won’t be done at all. ↩︎
- Opening new credit cards can negatively affect your credit score, so don’t do this before you’re about to buy a home, for example. However, opening one card every 6 months typically has only a marginal and temporary impact on your credit score. In the long-term, by boosting the amount of available credit in your name, it can improve your credit score by lowering your credit utilization ratio. ↩︎
- If you want to learn more about emergency funds or how to build one, I highly recommend The Total Money Makeover by Dave Ramsey. It’s a fantastic introduction to personal finance, budgeting, getting out of debt, and setting up your finances for success. ↩︎
- In Spy Secrets That Can Save Your Life, Hanson also gives detailed instructions on how to bury your cash safely. Though less easy to access, it is a method of diversion safe that avoids a lot of the risks identified above. ↩︎