Before you leave home
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Revision as of 09:34, 3 March 2016
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* Advise your bank about where you are travelling. This can help avoid triggering fraud monitors, that may cause transactions to be rejected, or even freeze your card account. They may need to get international support specifically activated for your debit or credit card.
* Advise your bank about where you are travelling. This can help avoid triggering fraud monitors, that may cause transactions to be rejected, or even freeze your card account. They may need to get international support specifically activated for your debit or credit card.
* Make note of what to do if your cards are lost or stolen. Note the numbers of your cards, the numbers to call. If your bank has an app that can freeze your card, download it.
* Make note of what to do if your cards are lost or stolen. Note the numbers of your cards, the numbers to call. If your bank has an app that can freeze your card, download it.
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* If your bank detects fraud, they may try to contact you. Some banks will send you a SMS notification if they decline your card. If you don't have a phone where you can receive a phone call or a SMS, it may result in your transaction being declined or your card frozen.
* Take a backup card or cards. Keep them separate from your primary cards. Make sure they are also activated for use where you are travelling to. Consider leaving a spare card with someone who could courier it to you in an emergency. Banks can charge large sums for this service.
* Take a backup card or cards. Keep them separate from your primary cards. Make sure they are also activated for use where you are travelling to. Consider leaving a spare card with someone who could courier it to you in an emergency. Banks can charge large sums for this service.
* Get a PIN for all your cards, and know them! You can usually change your PIN to something you can remember easily. Remember the numbers, as not all ATM machines have letters. Don't write it down, or make it too obvious.
* Get a PIN for all your cards, and know them! You can usually change your PIN to something you can remember easily. Remember the numbers, as not all ATM machines have letters. Don't write it down, or make it too obvious.
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[[File:Flickr - Nic's events - London - 14-15 Dec 2007 - 034.jpg|thumbnail|Cash from around the world]]
[[File:Flickr - Nic's events - London - 14-15 Dec 2007 - 034.jpg|thumbnail|Cash from around the world]]
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Cash is a traditional and versatile payment method, and can still be used for paying for most general goods and services you need while travelling.
Most countries require you to have cash in the local currency to be useful. In other developing countries, as a tourist you will be expected to use a hard currency rather than the local currency. Usually U.S. dollars, or a regional hard currency. In some countries, you may be able to get by with U.S. dollars or another major currency such as Euros but this will often be at an additional expense as the exchange rate offered by merchants and hotels can be unfavorable. Merchants in border communities may accept currencies of neighboring countries. Macau practically accepts Hong Kong Dollars at a 1:1 basis with the Pataca and the difference is not noticeable for smaller transactions. However exchanging Macau's money back into Hong Kong Dollars outside Macau is quite expensive if not impossible, even in Hong Kong. Another example is Malaysia and Singapore where cross-border transportation-related charges on the Malaysian side are accepted in either currency at a 1:1 basis so it is greatly disadvantageous to use Singapore Dollars instead of Malaysian ringgit when for instance purchasing train tickets or paying for tolls.
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Cash is a traditional and versatile payment method, and
one that
can still be used for paying for most general goods and services you need while travelling.
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'''Most countries require you to have cash in the local currency.''' However, in some developing countries as a tourist you will be expected to use a hard currency rather than the local currency - typically U.S. dollars, or a regional hard currency. In some tourist areas, airports, airplanes, and border regions, you may be able to get by with any major currency or the currency of the bordering country. Often this will often be at an additional expense built into the rate of exchange. Macau practically accepts Hong Kong Dollars at a 1:1 basis with the Pataca and the difference is not noticeable for smaller transactions. However exchanging Macau's money back into Hong Kong Dollars outside Macau is quite expensive if not impossible, even in Hong Kong. Cross-border transportation-related charges from Malaysia to Singapore accept Singapore dollars 1:1 basis as the exchange benefits the seller. It won't work in reverse.
However, cash cannot be used for all purchases. Most car rental companies require a credit card. Major hotels often require a credit card or a large cash bond. If you only have cash, you'll be in the queue for those entry tickets while your neighbours have jumped the queue and gone to the machine with no queue that only accepts credit cards, or purchased the tickets online on the way there. Some licence-plate tolling can only be paid with a card online, and there is no practical method for a tourist to pay with cash.
However, cash cannot be used for all purchases. Most car rental companies require a credit card. Major hotels often require a credit card or a large cash bond. If you only have cash, you'll be in the queue for those entry tickets while your neighbours have jumped the queue and gone to the machine with no queue that only accepts credit cards, or purchased the tickets online on the way there. Some licence-plate tolling can only be paid with a card online, and there is no practical method for a tourist to pay with cash.
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In many developed countries, the '''best option''' (given the convenience and typically good exchange rate) is to '''use an ATM in the destination country''' instead of bringing large amounts of cash to exchange. See the section above on cards and ATM use.
In many developed countries, the '''best option''' (given the convenience and typically good exchange rate) is to '''use an ATM in the destination country''' instead of bringing large amounts of cash to exchange. See the section above on cards and ATM use.
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In contrast, there
are typically larger fees and/or poorer currency rates
(noted below)
associated with
currency
exchange
.
You should not exchange more
than
you
need
. Money exchanges work on the basis of selling a foreign currency at one rate and buying at another. Make sure that you know the [http://www.xe.com/ucc/ current interbank exchange rate] before you leave home. Where there is more competition, the rates are likely to be better.
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There
are typically larger fees and/or poorer currency rates associated with exchange
cash
over
using
an
ATM
. Money exchanges work on the basis of selling a foreign currency at one rate and buying at another. Make sure that you know the [http://www.xe.com/ucc/ current interbank exchange rate] before you leave home. Where there is more competition, the rates are likely to be better.
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The most convenient exchange locations (such as at airports, malls or major hotels) have
poor
rates. If possible, check the difference (or spread) between "we sell" and "we buy". When this is more than 10%, you're definitely being ripped off. The best exchanges can go as low as
2
%. Also, check if there is an additional commission for each transaction and
its
amount
. Exchange counters such as those associated with jewelry stores or pawn shops may have fairly reasonable rates, but be skeptical of sub-prime "cheque cashing" or "payday loan" storefronts as even the most common currencies are often offered at relatively unfavorable rates. Exchanging foreign currency directly with banks is usually possible but some banks will only entertain you if you have large amounts. In addition, some banks will require you to fill-out some paperwork and/or show a valid ID. Another disadvantage is that they mostly have limited operating hours so during weekends and holidays, you're out of luck.
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The most convenient exchange locations (such as at airports, malls or major hotels)
generally
have
the worst
rates. If possible, check the difference (or spread) between "we sell" and "we buy". When this is more than 10%, you're definitely being ripped off
. However some money changers don't offer the same spread either side of the midrate. In a tourist area they may sell local currency further from the midrate than the buy - knowing that most of their transactions are with tourist buying the local cash
. The best exchanges can go as low as
1.5
%
from the midrate
. Also, check if there is an additional
fixed
commission for each transaction
,
and
take that into your
calculation
. Exchange counters such as those associated with jewelry stores or pawn shops may have fairly reasonable rates, but be skeptical of sub-prime "cheque cashing" or "payday loan" storefronts as even the most common currencies are often offered at relatively unfavorable rates. Exchanging foreign currency directly with banks is usually possible but some banks will only entertain you if you have large amounts. In addition, some banks will require you to fill-out some paperwork and/or show a valid ID. Another disadvantage is that they mostly have limited operating hours so during weekends and holidays, you're out of luck.
In some cases it may be better to exchange your money before you leave, in others it may be better to do it in your destination. As a general rule, the lesser-known currencies in the world have less favorable exchange rates abroad. In fact, they may first be converted to a well-known currency like the USD before being converted back into the host currency also at unfavorable rates. If this is the case, convert your home currency into a major currency (usually the USD) before leaving, then exchange that major currency into the host currency when you arrive.
In some cases it may be better to exchange your money before you leave, in others it may be better to do it in your destination. As a general rule, the lesser-known currencies in the world have less favorable exchange rates abroad. In fact, they may first be converted to a well-known currency like the USD before being converted back into the host currency also at unfavorable rates. If this is the case, convert your home currency into a major currency (usually the USD) before leaving, then exchange that major currency into the host currency when you arrive.
Most major currencies are subject to counterfeiting these days. Study the notes of the currency of the foreign country to become familiar with how it is supposed to look and feel. Almost all currencies employ anti-counterfeiting technologies, including color shifting ink, watermarks, special threads, iridescent inks, raised printing, holograms and other features. Be familiar with them so that you can quickly check them when you get a new note, whether it is from change from a larger note, or from a money exchange. If you are unsure, don't be afraid to say that you would rather get a different note, or say you would rather get two smaller notes for change. (For example, if you get a ten in change that you don't like the looks of, ask for two 5s instead). If you end up with a counterfeit, you won't get compensated after you leave by whoever gave it to you, and you may end up having to explain it to the police.
Most major currencies are subject to counterfeiting these days. Study the notes of the currency of the foreign country to become familiar with how it is supposed to look and feel. Almost all currencies employ anti-counterfeiting technologies, including color shifting ink, watermarks, special threads, iridescent inks, raised printing, holograms and other features. Be familiar with them so that you can quickly check them when you get a new note, whether it is from change from a larger note, or from a money exchange. If you are unsure, don't be afraid to say that you would rather get a different note, or say you would rather get two smaller notes for change. (For example, if you get a ten in change that you don't like the looks of, ask for two 5s instead). If you end up with a counterfeit, you won't get compensated after you leave by whoever gave it to you, and you may end up having to explain it to the police.
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====Black market exchange====
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[[File:Bolivar fuerte.jpg|thumbnail|In [[Venezuela]] it's fairly common to change your currency into these on the street]]
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In some countries the official exchange rate is fixed at a completely unreasonable or unrealistic rate. In these countries the '''black market''' will provide a much more realistic evaluation of the currency's worth and is practically unavoidable. For example, in 2007, the official exchange rate was 250 [[Zimbabwe]] dollars to the US dollar, while the black market rate reached 600,000.
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That said, '''the risks of black market exchange are legion'''. First and foremost, black market exchange is '''illegal''' and both buyer and seller may face severe sanctions if caught: the seller may even be (or work with) a police officer out to trap tourists. Second, the risk of '''fraud''' is high: you may get obsolete banknotes, fake banknotes, less than the promised amount or nothing at all. Consider carefully whether you need to exchange in the first place, as businesses in countries with basket-case currencies will often be more than happy to accept hard currency directly instead (although this, too, will often be illegal), and you may get all the local currency you need back as change.
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+
Change only a bit at one place and the rest elsewhere so that if you are scammed, it will be less of a loss.
+
+
The key guideline to successful black market transactions is to receive the money ''before you hand yours over''. Count the notes, inspect the notes carefully, compare them to any you already have, and, ''only then'', surrender your own money to the vendor. ''Do not'' allow them to take back the money they gave you, as this is where various sleight-of-hand tricks can be pulled to replace the legitimate bundle with something entirely different.
+
+
In countries where foreign exchange rates are reasonable, it is best to avoid the black market entirely: you risk losing all your money for little gain at most.
+
+
An exception may apply in countries such as [[Nepal]] and [[India]] where doing a legal exchange at a bank can involve wasting an hour or more but most hotels will change money for you instantly and fairly safely. The rate may not be much better, but the convenience is.
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===Convertible currency===
===Convertible currency===
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It is wise to carry an emergency stash of hard currency separated from all your other belongings and valuables. Some businesses that deal with many foreign tourists may also accept foreign money but almost always at an inferior exchange rate to allow for the inconvenience.
It is wise to carry an emergency stash of hard currency separated from all your other belongings and valuables. Some businesses that deal with many foreign tourists may also accept foreign money but almost always at an inferior exchange rate to allow for the inconvenience.
−
===Black market exchange===
−
[[File:Bolivar fuerte.jpg|thumbnail|In [[Venezuela]] it's fairly common to change your currency into these on the street]]
−
In some countries the official exchange rate is fixed at a completely unreasonable or unrealistic rate. In these countries the '''black market''' will provide a much more realistic evaluation of the currency's worth and is practically unavoidable. For example, in 2007, the official exchange rate was 250 [[Zimbabwe]] dollars to the US dollar, while the black market rate reached 600,000.
−
−
That said, '''the risks of black market exchange are legion'''. First and foremost, black market exchange is '''illegal''' and both buyer and seller may face severe sanctions if caught: the seller may even be (or work with) a police officer out to trap tourists. Second, the risk of '''fraud''' is high: you may get obsolete banknotes, fake banknotes, less than the promised amount or nothing at all. Consider carefully whether you need to exchange in the first place, as businesses in countries with basket-case currencies will often be more than happy to accept hard currency directly instead (although this, too, will often be illegal), and you may get all the local currency you need back as change.
−
−
Change only a bit at one place and the rest elsewhere so that if you are scammed, it will be less of a loss.
−
−
The key guideline to successful black market transactions is to receive the money ''before you hand yours over''. Count the notes, inspect the notes carefully, compare them to any you already have, and, ''only then'', surrender your own money to the vendor. ''Do not'' allow them to take back the money they gave you, as this is where various sleight-of-hand tricks can be pulled to replace the legitimate bundle with something entirely different.
−
−
In countries where foreign exchange rates are reasonable, it is best to avoid the black market entirely: you risk losing all your money for little gain at most.
−
−
An exception may apply in countries such as [[Nepal]] and [[India]] where doing a legal exchange at a bank can involve wasting an hour or more but most hotels will change money for you instantly and fairly safely. The rate may not be much better, but the convenience is.
===Coins===
===Coins===