The advent of the ATM, or Bancomat as it is known in Italy, has made banking from abroad a snap. Even foreigners who spend months at a time in Italy donâ€™t bother opening an Italian account. As long as you have an ATM or debit card, you can pull out cash on demand. Before you plan to rely on a card as your lifeline, though, check a few things: If the card is new, make sure you first activate the PIN in a local branch. You wonâ€™t be able to activate it from abroad. Some banks also have a distinct PIN for international withdrawals. Donâ€™t memorize the code using letters to guide you: Letters often arenâ€™t included on Bancomat keyboards.
Your card must work with either CIRRUS or NYCE, as most do, or else be a debit card from Visa or MasterCard. It is also a good idea to keep an extra card on hand in case one is lost, crushed, or demagnetized. Sometimes, a confused Bancomat will eat your card for no good reason, and the Italian bank will send it back to the United States for verificationâ€”no matter how much you plead that there is no problem with your account and you are who you say you are. The downsides to this home-banking strategy are (1) there is a fee, usually â‚¬2, every time you withdraw on a foreign account, and (2) keeping track of the paperwork from abroad can be a hassle. Many U.S. banks have not yet made online banking available for those living abroad, though some lenders offer a serviceâ€”again, for a feeâ€”that sends your statements to an Italian address. ATMs (or Bancomats) make banking from abroad easy.
For those who donâ€™t plan to settle down for the long term, opening an Italian bank account should not be a priority. If you work for an Italian company as a freelancer whose legal residence is in the United States, your payment will be sent to a U.S. bank via wire transfer. But if you have a regular job contract, and therefore have a registered tax ID number on file with the government, your employer will pay you either by check or by a deposit in an Italian bank. Most Italian firms wonâ€™t pay a full-time employee through a foreign account, as that would suggest that they and the employee are evading taxes. And a check made out in euros is worth zero in North America. In this case, opening an Italian account is a necessity. The process is easy. The only paperwork the bank will ask for is a passport and a tax ID number. Just as in the United States, you have your choice between savings and checking accounts, along with a number of investment options. If you want to bet on U.S. dollars over euros, for example, you can open a foreign currency account. This will allow you to deposit your dollars directly and convert them to euros only when you make a withdrawal.
Here again, there is a big hidden costâ€”namely, the fees to hold an account. One consumer group found that fees for a single account reached â‚¬400 per year. And you will be hard-pressed to find any type of savings account in Italy that actually pays you interest. Checking accounts of course almost never provide interest payments either. But the value of writing checks should not be underestimated. It is one of the easiest ways to pay. More importantly, with a checking account youâ€™ll also have access to an Italian Bancomat card, which is accepted even more frequently at stores than Visa and MasterCard.
An example: I once found myself visiting an isolated monastery on the Ligurian coast, the kind of place you can only get to by boat. My friend and I ordered sandwiches, ate them in a hurry, and then realized neither of us had any cash. There was certainly no bank machine in this town of fewer than 50 inhabitants, and the nearest one was a ferry ride away. The snack bar was smack in the middle of the beach and didnâ€™t accept credit cards, but it did, miraculously, accept Bancomat cards. You will find this to be true even in urban areas.
Absurdly, many travel agencies do not accept credit cards. The culprit is the same: merchant fees. The travel agents complain that the amount they pay to the card company totally wipes out their commissions. But then, they should ask themselves, how many foreigners are prepared to pay for a transatlantic flight with cash? For that matter, how were Italians expected to pay for a ticket without a credit card in the days before the Bancomat?