RTW travel - how best to access money - no cash or cards!

Note that in pretty much any country (and in some very out-of-the-way places) you can get money sent via Western Union (or similar organisations) but this isn't cheap.  I've never used this service for real but have looked at it a couple of times just to see what the costs would be.  Payment could be either from someone you know back home taking cash into a Western Union office, or you can do it yourself online.  Pick-up will generally be in the currency of the country you are in, though note that Western Union will obviously make money on the exchange rate.

The cost for the service depends on how much money is being sent, where from, and where to - and not always in a predictable fashion.  For example, sending $500 from the US will cost $43 to the UK, Australia, or Argentina, but only $39 to Rwanda.

This is a last resort way of obtaining cash but, having seen Western Union offices on my travels as often as I've seen cans of Coke (i.e. very frequently), it's probably your best bet if you're in a real financial bind.

RTW travel - how best to access money - cards (ATM/debit/credit)

On most of my trips around the world, I've taken 2 ATM cards (one backed by Mastercard from Citibank in the US, and one backed by Visa from HSBC in the UK) and 2 credit cards (a Mastercard from Bank of America in the US, and a Visa from HSBC in the UK).  I've rarely used either of the credit cards while travelling, and have usually only needed the Mastercard ATM card.  The big exception to that previous sentence was Africa, which I will deal with in one of my continent-specific posts.

I should clarify my card descriptions, though the rest of this paragraph is by no means gospel and is just my limited understanding of how the ATM networks function.  I'm assuming that the credit cards are self-explanatory so I'll just stick with the ATM cards.  In most cases, an ATM card is equivalent to a debit card though I never tried any POS (point of sale) transactions with either of mine so can't comment on that aspect of them.  An ATM card backed by Mastercard will likely have one or more of the following symbols: Mastercard, Maestro, Switch, or Cirrus.  An ATM card backed by Visa will likely have one or more of the following symbols: Visa, Electron, or PLUS.

A few general points about travelling with credit cards:  

i. One of the worst ways to access cash is to use your credit card in an ATM.  This is called a cash advance and is basically a loan.  You will pay punitive interest on this even if you pay off your bill on time.  If you use it abroad, you will also no doubt have to pay some kind of foreign transaction fee (usually about 3%) plus quite possibly a commission to the bank whose ATM you use to withdraw the money.  Don't get cash advances except as a last resort.

ii. Note that using your credit card abroad for purchases will likely also incur a foreign transaction fee.  In a number of countries (Ecuador springs to mind), the merchant will add on a hefty commission before the final total is calculated - the justification for this is supposedly that it's very expensive for the merchant to be connected to whichever credit card network they are affiliated with.  I don't know the truth of that but, either way, watch out for this.  As an example, in Ecuador, the merchant commission could be as much as 10%.

iii. Note that the foreign transaction fee is usually charged if you use the card outside of the country of issue - the deciding factor is NOT the currency.  Ecuador provides another good example.  Even though the currency in Ecuador is $, you will still be charged a foreign transaction fee if you use a US-issued (and hence $-denominated) credit card there.

iv. The merchant may offer to make the charge in your home currency rather than the local currency (i.e. the currency of the country you are paying in).  In pretty much all cases this will work out as a worse exchange rate than if you choose the local currency and let your credit card company do the conversion.

v. If you are expecting to make great use of your credit card while abroad, it might pay to apply for one that doesn't charge a foreign transaction fee.  In the UK, I think both Nationwide and the Post Office issue such cards.

A few general points about ATM cards:

i. If you use your ATM card abroad, it's highly likely you will be charged a foreign transaction fee.  In my experience, this has typically been less than that for a credit card (maybe 1%) but I've noticed a trend for increasing this (I think both my ATM cards now charge 3%).  Note that this fee may not appear as a separate line item on your statement - it might be included in the exchange rate for the withdrawal.

ii. Even if you can't find an ATM to accept your ATM card, it may still be possible to withdraw money over the counter inside a bank.  This may well incur a commission, but you'll still lose less than using your credit card for a cash advance.

iii. If you are going on a long trip and expect to make great use of your ATM card while abroad, it might pay to apply for one that doesn't charge a foreign transaction fee.  In the UK, I think Nationwide issues such a card.

It's a good idea to warn your bank/credit card company about your travels in advance, so that when you first use your card in foreign climes, they don't suspend it because they think it's been stolen.  Note that the algorithms for detecting abnormal activity aren't that great - I travelled through 10 different countries in Africa before Citibank suddenly decided that my withdrawal attempts in Madagascar were indicative of abnormal activity.

In some countries, you may find there are limits on how much you can withdraw in one transaction, e.g. in Argentina, many ATMs had a 300 peso limit (about $75).  Depending on the machine/bank, you can get round this by making several withdrawals from the same machine, making several withdrawals from different machines, or making several withdrawals from different banks.

Both credit cards and ATM cards are generally covered by their issuing companies/banks so that you are insured to the tune of £50 maximum (I'm simplifying here - there are other places on the web with full details about liability).  Just make sure you have the appropriate phone numbers in case you do need to cancel a stolen/lost card.

Prepaid cards seem to have become more popular recently, but I really don't see any advantage to them when travelling abroad.  As long as you are capable of keeping track of your spending, and maintaining an awareness of your credit card limit and bank account contents, then a prepaid card seems unnecessary.

Finally, there are also safety issues associated with cards.  Like with cash, don't carry them all in one place - best to spread them through your luggage so that if one is lost/stolen then hopefully the others won't be.

I rarely used my credit card while travelling but, if you are going to, be careful of potential scams - you'll need to use your judgement (backed up by research) based on the country you are in and the establishment you are buying from.  Try not to allow your credit card out of your sight, to minimise the chance of it being copied.  Though you should be doing this anyway, whether at home or travelling, make sure you check your bill closely to ensure no extra items get added on.

ATM cards present further issues.  Never allow anyone to distract you at an ATM.  If you are having problems figuring out how to use it (perhaps it might be in a language you don't understand), ask a bank employee to help you.  It only takes seconds for someone to skim your card (a popular scam in, say, South Africa).  Try to visit ATMs in busy areas during the day time, to minimise the chances of being mugged - whatever, always be vigilant about your surroundings.  And if you are withdrawing a large amount, try to immediately get back to your accommodation to drop it off rather than carry it around with you all day.

My next post will be a short one, mentioning your remaining options for acquiring money if you have neither cash nor a card.

RTW travel - how best to access money - cash

After my 4 years of travelling, I now intend writing blogs about some of the more administrative/logistical aspects of these trips, in the hope they may be of use to future travellers.  As a UK citizen, and by virtue of where I travelled, the information will be most applicable to Brits travelling in developing countries, though some elements will be more generic.  This first post concerns accessing one's money, with an emphasis on cash.  Cards will be covered in a later post.  Continent-specific information will be covered later too.

Sometimes you may be in the fortunate position of being able to use the currency of your country of residence in the country that you are visiting, but that was never the case for me so I'm writing this on the assumption that you don't have any of the local currency.  Depending on what part of the world you're travelling in, you may enter a country at a point where there are no ATMs so the only way you can obtain local currency is by changing money.  On the vast majority of my travels, I've only had to change money occasionally because of the ubiquity of ATMs - Africa was the big exception to that.

Avoiding scams

Unfortunately entry points to a country can be the worst places to try to change money.  Airports may have exchange bureaux charging exorbitant rates - overland borders have a nasty habit of attracting scammers.   You need to do some research beforehand to identify if you will be passing through an entry point that needs extra caution.  If you have to go through one, try to only change as much as money as you need to get to the next ATM.  

Scams can include:

i. Incorrect calculations - make sure you have some idea in advance of how much your money is worth

ii. Sleight of hand - this can occur when the moneychanger is taking your money to count it, or when giving you back the local currency equivalent.  Don't allow yourself to be distracted when this process is taking place but, even then, a dextrous person can pull a fast one.

iii. Being rushed - the moneychanger may say that what they are doing is strictly speaking illegal so you need to conduct the transaction quickly before the police come.  This will be used in conjunction with one of the above scams.  Don't be rushed.

iv. Being taken to some deserted place for the transaction - the moneychanger may suggest this for the same reason as number iii.  Don't agree to it.  You are much more likely to be set up for a mugging in this way.

v. Fake notes - you probably won't have a clue what the bank notes of a new country will look like, so a crooked moneychanger could give you some Monopoly money and you'd be none the wiser.  In your research, try to get an idea of what the notes should look like.

I personally fell victim to i and iii during my travels.  Note that the relative merits of changing money in a bank versus an exchange bureau versus a guy in the street with a wad of notes in his pocket change depending on the country.  Do your research, then weigh up your priorities of the exchange rate, availability, and dodginess.

What currencies to take

The best currency to change FROM is going to depend on what part of the world you're in.  In general, the US dollar ($) is the most useful currency to carry (both in terms of its acceptability globally as well as the spread on the rate), with the euro (€) second and pound sterling (£) a distant third.  I've generally travelled with a couple of hundred $ as back-up though, apart from in Africa, have rarely needed to use any.  You will also get a decent rate for the currencies of neighbouring countries, simply because it will be easy for the moneychanger to convert them.  This is also a reason not to get a load of foreign currency in advance in your own country - the rates you'll get in the UK for any of the currencies in, say, Southeast Asia, will be much worse than what you get when you arrive there.

Note that in some countries not any old bills will do, especially when it comes to $ - only certain denominations may be acceptable, likewise certain years of issue and certain ranges of serial numbers.  Even a fold or a tear might be a no-no.  These constraints are generally to do with how likely a note is to be counterfeit.

Some currencies are also restricted currencies, which means that in theory you can't change them outside of their country of issue.  In practice, you usually can, especially in less developed parts of the world, but you'll probably get a bad exchange rate.  So if you are in a country with a restricted currency, you should try to wind down your holding of that currency so that you leave the country with as little as possible.  Whatever you're stuck with can be kept as a souvenir, given to charity, or perhaps exchanged with a fellow-traveller going in the opposite direction.

When changing money, always try to get some low denomination bills, where "low" is defined as relative to the country you're in rather than your home country, e.g. in India, I often found it difficult getting change for 100 rupee notes (roughly $2) even for items costing 40 or 50 rupees.  If you get saddled with a load of notes that are too big for any purchases, try visiting a bank as they will usually exchange them for lower denomination ones.  Also beware of ripped notes as, in some countries, people won't accept them.  If someone tries to give you a ripped note in your change, feel free to decline it.  I always carried a small roll of Sellotape with me on my travels, and it saw most use repairing torn money.

Always try to do some research into the currency of a country that you intend visiting.  Apart from some of the issues mentioned above, you may find other interesting facts, e.g. last year Zimbabwe changed its currency from its own inflation-plagued dollar to the $.

Carrying a large wodge of $ around the world is the best way to make the most of your money, however it then carries with it the risk of being stolen.  As such, I would always recommend taking one or more ATM cards (see subsequent posts) - yes, you'll pay fees to use them, but their convenience and peace of mind go some way to offsetting that.  However there are some countries where you simply can't use a foreign ATM card hence will have to rely on $, e.g. Sudan and Rwanda.  In that case, to minimise the amount of $ I carried on my Africa trip, I took enough to get me through Sudan, then used my ATM card later in Uganda to withdraw enough Ugandan shillings that I then converted into $ to take into Rwanda.  Sure, I lost money on the fees, but the spread on $ wasn't that great and I was happy to not have a brick of $ burning a hole in my backpack from day 1.  If you go with this approach, make sure that you obtain bills that will be acceptable in the country you're going to (e.g. the right serial numbers, denominations, etc as mentioned above).

Keeping your money safe

The final issue I want to cover with cash is how to keep it safe, though this also applies in some ways to cards.  I recognise that crime ranging from pickpocketing to armed robbery can occur anywhere in the world, but certain places have deserved reputations for crime - your research should tell you that.  Only keep a small amount of cash in your pockets, so that a pickpocket won't get away with much.  This may also be useful as a sop to a mugger.  If you must carry a larger amount of cash with you, wear some kind of moneybelt under your clothing.  Though moneybelts aren't flawless - when I was mugged, that was actually the first place the muggers went for - they'll guard against pickpockets.  Better yet is something in your socks or shoes, that all but the most diligent mugger will miss.

Depending on the level of confidence you have in the guesthouse/hotel/hostel where you're staying, leave any large stashes of cash with them in a safe.  Make sure you have a receipt stating clearly how much you've left with them - include serial numbers too if necessary.

While actually in transit from one place to another, when you must necessarily have all your luggage with you, put your money in various different places in your bags so that in the event of one lot being stolen, you increase your chances of retaining (some of) the rest.  Depending on the dodginess of the area that you're in, you may need to put some effort into this, e.g. putting money in a (empty) shampoo bottle, taping the notes into the pages of a book, etc.

My next post will cover general issues regarding the usage of cards (debit, ATM, and credit) while travelling.

The post-travel mindset

For 4 years to the end of 2009, I conducted 6 long trips in various parts of the world - India (4 months), Australia (2 trips of 3 months each), Southeast Asia/China/Russia (10.5 months), South America (9 months), and Africa (10 months).  My experiences in that time were blogged at Jabe's blog. Now that the travelling is over and I'm trying to create some kind of life back in England, it seems right to gather together some of the wisdom I gained during that time - both as confirmation to me that I actually did learn something, and also as information that may prove helpful to anyone contemplating something similar. This blog, Sparky's Planet, will be where I lay out that knowledge as well as draw some conclusions.

I'm expecting that what I write here will cover several bases, from pure data (e.g. costs of transport, hotels, food, etc) to general summaries (e.g. best ways to carry cash) to more philosophical topics (e.g. why travel). Please bear in mind that this will inevitably be slanted by the strength/weakness of my own talents (e.g. in haggling over prices), and my particular travelling style, not to mention my general outlook on life. Any conclusions I draw will be based predominantly on my own experiences, which in most cases were one-offs. In other words, this will not be a consensus view nor a substitute for one.

My motivation for doing this is a conviction that knowledge is power. By power, I don't mean master-of-the-universe power - rather, the power to control one's own life by making informed decisions. Knowledge can range from the simple, such as the appropriate price for a live chicken in northwestern Mozambique, to the complex, such as the potential effects of each political parties' policies on the future of one's country. I won't pretend that what I will write here will necessarily equip anyone for complicated decision-making, but it will hopefully assist at least one other person in the world in the future.

After my trip, I wrote a book about my dissatisfaction with my career, my reasons for quitting my job, life as a first-time thirtysomething backpacker, and finally the lessons learned from being exposed to experiences and people that I would never have encountered if I'd stayed in my office.  The book is called "Out Of Office Male" and is available as an eBook at Amazon US, Amazon UK, Amazon Germany, and Smashwords (other outlets to follow).