brip blap: 7 ways to mind your cash when you are abroad
Mrs. Micah
· 1 year ago
I always kept enough for cabfare pinned in my pants pocket when traveling in Europe.
Hunter Nuttall
· 1 year ago
I was very surprised to learn that credit cards aren't accepted in Japan. Fortunately I asked my friends about that ahead of time so I brought enough cash, but it seems really weird that people have to pay cash for everything. My friends even pay their rent in cash.
deepali
· 1 year ago
Given how much I travel, you'd think I'd at least follow one of these tips! :)
Dividend Growth Investor
· 1 year ago
I would not exchange money with the locals unless they are very very good old friends of yours. Otherwise you risk being taken advantage of by : given obsolete currency, fake currency etc.. For example many countries in eastern europe have gone through at least one currency reform since the fall of the communism; thus if you go to Russia and someone tries to exchange your hard earned dollars for Roubles that were issued before 1998 ( or even 1990), run away!
asithi
· 1 year ago
I used to try to spend all my foreign money. But I realized that I am buying stuff that I would not buy normally just to get rid of the money. That is bad money management to me. I rather get some of my money back at the exchange than to trade for it for junk.
kitty
· 1 year ago
Pretty good advice. A couple of things I'd like to coment on/add. Regarding 4. I was very surprised about your comment on the exchange rate. In my experience - and I've travelled quite a lot - the exchange rate you get when you use both credit and debit cards are much better than any rate you can get in a bank, even after you factor in the fees. The reason for it is that when you use your card ot buy something or when you use a debit card to get money out of an ATM, you get inter-bank wholesale exchange rate instead of a retail rate. In a local bank they have one rate to buy dollars and another to sell dollars; they make money on the spread. In an ATM, you get the rate in-between "buy" and "sell", the actual rate used by banks.
Regarding ATM fees. If a fee is charged by an ATM, it is usually a fixed fee, not a percentage. So you need to maximize the armount of money you take i.e. withdraw money in large chunks (provided you can spend it), then plan your cash/credit card expenses in a way that you can spend all of exchanged money yet don't run out 2 days before the end of the trip. If I've taken too much, I often start using cash to pay for hotels, for example.
As to the fee charged by your local bank - you can choose a bank carefully. For example, credit unions don't charge anything for exchanges, so opening a small checking account with a credit union may help. Some large banks like Wachovia didn't use to charge it as of few months ago.
One thing I'd like to add about cash. When you take cash to "remote" places (including some Eastern European countries), make sure all of your $100 bills are clean, new and unmarked. I had a nasty experience in Russia where an exchange place refused to exchange a $100 bill that I got from a US ATM because it wasn't clean. In the US, some bills may have something written on them - this wouldn't go. Several of my friends had the same problems both with dollars and euros - one of my friends even went to St Petersburg's stock exchange place where they offered her only 90% of value on her $100 bill simply because it wasn't "new". So go throw every single bill you got from an ATM, sort it by "cleanliness", than go to a bank and ask them to exchange every marked, dirty or worn out bill for a new one.
Steve (Brip Blap)
· 1 year ago
@Kitty: Well, it's a good point that as time goes on ATM/credit/etc. cards have started to have better rates. I think it depends on so many factors - where you are, what network you're using, etc. - that I should probably just modify that to say "do some rate comparison in each country to find the best means of exchanging". My experience has always been that a good credit card is the way to go, but that's certainly not universally true in every instance.
Excellent, excellent point on the clean bills. I've had the same experience in Russia many times, and you're right - if you get a 'funky' bill you might as well just stash it away and wait until you're back home to spend it, because bills need to be near-pristine in many countries to be exchanged. Great point, I'm glad you reminded me (and everyone reading)!
All Comments
A couple of things I'd like to coment on/add.
Regarding 4. I was very surprised about your comment on the exchange rate. In my experience - and I've travelled quite a lot - the exchange rate you get when you use both credit and debit cards are much better than any rate you can get in a bank, even after you factor in the fees. The reason for it is that when you use your card ot buy something or when you use a debit card to get money out of an ATM, you get inter-bank wholesale exchange rate instead of a retail rate. In a local bank they have one rate to buy dollars and another to sell dollars; they make money on the spread. In an ATM, you get the rate in-between "buy" and "sell", the actual rate used by banks.
Regarding ATM fees. If a fee is charged by an ATM, it is usually a fixed fee, not a percentage. So you need to maximize the armount of money you take i.e. withdraw money in large chunks (provided you can spend it), then plan your cash/credit card expenses in a way that you can spend all of exchanged money yet don't run out 2 days before the end of the trip. If I've taken too much, I often start using cash to pay for hotels, for example.
As to the fee charged by your local bank - you can choose a bank carefully. For example, credit unions don't charge anything for exchanges, so opening a small checking account with a credit union may help. Some large banks like Wachovia didn't use to charge it as of few months ago.
One thing I'd like to add about cash. When you take cash to "remote" places (including some Eastern European countries), make sure all of your $100 bills are clean, new and unmarked. I had a nasty experience in Russia where an exchange place refused to exchange a $100 bill that I got from a US ATM because it wasn't clean. In the US, some bills may have something written on them - this wouldn't go. Several of my friends had the same problems both with dollars and euros - one of my friends even went to St Petersburg's stock exchange place where they offered her only 90% of value on her $100 bill simply because it wasn't "new". So go throw every single bill you got from an ATM, sort it by "cleanliness", than go to a bank and ask them to exchange every marked, dirty or worn out bill for a new one.
Excellent, excellent point on the clean bills. I've had the same experience in Russia many times, and you're right - if you get a 'funky' bill you might as well just stash it away and wait until you're back home to spend it, because bills need to be near-pristine in many countries to be exchanged. Great point, I'm glad you reminded me (and everyone reading)!