Common Cents 2: Banks and Credit Cards

For the budget traveller, or those just wanting to save money, a little wisdom in selecting your bank and credit cards for travel can save you some money. Years ago, on my first jaunt to S.E. Asia, the bank I was using charged ATM fees for withdrawals made at any ATM machines outside their system. Before my second trip to India, I created some new bank accounts. At the time, I did my research on "flyer talk/wiki", a site that seems to be currently out of date. But, thankfully, you can check out the best ATM cards/banks for travelers, as well as credit cards, by doing a simple internet search for something like "best ATM cards for travellers". When I was researching banks and ATM cards back then, I learned that credit cards also vary in their fees for foreign transactions.

Back then I found that Charles Schwab provide a free checking account with interest when you open a brokerage account. The checking account has no minimums and no fees for regular use (of course, they do have fees for insufficient funds, wire transfers, etc.) On top of that, they reimburse any ATM fees for up to six withdrawals per month! Their checking account interest is not the greatest, but basically, you can enjoy free banking with them! Even for overseas ATM withdrawals! I have it on good word that they also provide excellent customer service.

Back then I learned that Capital One offered one of the few credit cards that did not charge a percentage for foreign transactions.

So, by choosing your ATM card and credit card well, you can save a lot of money!

Things are changing all the time. I recently discovered that Bank Of America offers credit cards with no extra fees for foreign transactions. I also discovered that Capital One 360 offers ATM cards (*) for which they charge no additional fees to the ones charges by the ATM provider. That's perhaps not as good as Schwab, but it's still pretty good compared to the bank I used years ago that charged me $4-5 per foreign ATM use.

So, before you set off on travel about the world, look into your banks, ATM cards and credit cards. Credit unions also are worth looking into. Not only can you keep your money local, but they often have less fees on their cards. With prudence, you can save a bunch of money.

Please do your own research... because things do change. As far as ATM cards and banking fees, Schwab and Capital One 360 seem to be good at the time I am writing this, but things change and other banks and cards may be as good. Currently Capital One and Bank of America offer credit cards that do not charge extra fees for foreign purchases.

As far as money on the road, it's always to balance your risks. US dollars in cash, US dollar American Express Traveller's checks, ATM cards, and credit cards (for credit or cash advance) are ways to balance your risk. Also having both a Visa and Mastercard ATM/credit card is wise. In some places, ATM machines are few and far between. And, they may not be functioning.

Once I was in a Himalayan town in India with two ATM machines, neither of which was working for foreigners. There were lines every day as people went desperate for cash. I finally got a small cash advance on my credit card from money changer and paid nearly 10% in fees to tide me over until the next town.

I will also admit, I am a bit of a fan of traveller's checks. In S.E. Asia (Thailand, Laos), Nepal, and India you can generally cash them at banks and money changers. Cash a week or months worth at a time, and it's as easy if not easier than an ATM machine.

In any case, having a few on hand, along with some US dollars, will cover you for emergencies, when your plastic is not working. Another thing to note, is that if you have American Express traveller's checks, you can receive mail at an American Express office. A handy thing to have, if you happen to need a replacement ATM card mailed to you!  Not that I know by experience. Which reminds me, a month before you travel, you might check the expiration dates of the cards you plan to travel with and make sure they don't expire during your period of travel. You should be able to get your card provider to send you a new one before you go.

Happy travels!

(*) note that Capital One currently has a friend referral link which provides the referrer with cash rewards. If you sign up via this link and meet the requirements, then I will receive a bonus.

Common Cents: Risk Distribution and Money on the Road

So, yesterday, one of my friends, left his wallet on a public bus in Bangkok. Well, allegedly. He couldn't find it after we got off the bus, and we were sure he had it on the bus. Likely, he laid on his lap after paying the bus fare and forgot about it. We actually caught up with the same bus looking for the wallet, but we weren't sure it was the same bus and didn't thoroughly search it. We tracked down the bus company, but no one had turned it in.

The good news was he only had a few hundred Baht in it. The bad news was that his credit cards, ATM card, passport card, US drivers license, and entry card for the condo were all in it. I'm sorry for his loss. It could happen to anyone. But I realized that some of my common sense practices could have saved him a lot of hassle.

Never Carry What You Don't Need

First of all, never carry what you don't need. And this applies to your home country or abroad. When I am in the US, I usually only leave the house with my Driver's License and cash. If I am short on cash, I take my ATM card. Unless I am planning a purchase, the credit card stays home. Why risk losing what you don't need to carry? Unless I am going to the library, the library card stays home. You get the idea.

When, I travel abroad, I use similar thinking. There is no need for me to carry credit cards, nor my US driver's license, etc in my day to day outings. I have a practice of having a "day wallet" which houses the budgeted cash for the day. That way I am never flashing about wads of cash. The remainder, along with my passport, stays in my money belt. And, depending on the type of day, the money belt may stay in the hotel safe.

Living in Bangkok, I have a variety of other cards: the entry card for my apartment building, subway and skytrain passes, a supermarket point card. I only take what is needed when I leave the house. For one, I don't like cluttering my pockets unnecessarily, and, for seconds I don't like a bulging wallet. For that matter, my wallet only holds my day cash. A button shirt pocket or cloth purse houses excess cash, ATM card, etc.

I think how my practices could have saved my friend some grief. Had I lost my wallet on the bus, I would have only lost the cash that was in it. My driver's license would have been safely at home. My key card for the apartment would have been in my other pocket along with my ATM card (if I had even brought my ATM card). My US driver's license would be sitting safely in my apartment along with my credit cards. Not that I couldn't lose the other stuff, but my risks are distributed.

So, before you walk out the door for the day, consider your risks and consider:
1) taking only what you need for the day or outing.
2) distributing what you take with you in different pockets.
3) and always check your pockets and the area you are leaving before leaving.

There are some caveats. Hotel rooms are not always secure. (Oddly enough, I find that cheaper guesthouses with hasps on the door for my own combination lock seem more secure than higher priced lodging with merely a locking doorknob.) Legally, you may be required to carry your passport with you in a foreign country. You have to weigh your risks. If you are going out drinking, it may be wiser to leave your money belt at home, and carry a photocopy of your passport. Likewise, if you are going to the local swimming hole...unless you have a waterproof money belt, or a a friend who is going to sit on the bank with your bag of valuables. If you carry your money belt, try to keep your immediate needs elsewhere so you are not flashing your money belt. If you do need to access it, consider doing so in a bathroom stall (alone!). Typically, my money belt stays below my belt except at the airport kiosk, or at the hotel reception counter where I retrieve my passport.

Broader Issues: How to Access Your Travel Money

On broader notes, for travel, I subscribe to again balancing your risks between cash, ATM, and traveler's checks. ATMs are pretty available nowadays, but not reliably so. I have been in towns where the three ATM machines have been down. For days. US dollars are pretty much traded everywhere. So having some spare cash to exchange in emergency is a good plan. Traveler's checks are also easily cashed.... no, not at a restaurant for your evening meal, but at a money changer, a hundred dollars at a time. If your long term travel money is distributed among the three sources, you will always have a way to get local currency. I have generally exchanged a week to a months worth of currency at at time, depending on my itinerary.


As far as credit cards and ATM cards, I suggest carrying perhaps three distributed between Visa and Mastercard and their networks. You might find yourself in a one ATM town and you want to have a card of the appropriate network. I highly recommend Flyer Talk's Wiki where you will find people in the airline industry have put together tables of banks, ATM cards, and credit cards and their charges. You might find that a Charles Schwab free checking account will provide you with a ATM card for which fees are reimbursed for like 6-9 times per month; and, you might find that Capital One credit cards do not charge additional fees for foreign transactions. That's what I found when I researched a few years ago. I ditched my fee heavy bank and have had "free" bank services since then. It is also worth checking your local credit union.



How to Carry Your Stuff

As far as carrying all this stuff. Again balance your risks wisely. I often keep a credit card, photocopy of my passport, and a twenty or hundred dollar bill stashed in my luggage. That way, if I lose my money belt and wallet, I have an emergency fund. I often carry two money belts and a wallet. The wallet, is for the day cash. The main money belt under my waistband has the passport, cash and travelers checks reserves. Another pocket or pouch, has a credit or ATM card along with the traveler's check receipts. My family has a copy of my credit card numbers, ID numbers, etc. And sometimes I find an electronic "corner" to store that information in as well.

Be sure to research your destination. For instance, in India and Thailand, I have been able to cash traveler's checks at money changers. In larger cities, there is no shortage of ATMs. But in small towns, and Himalayan villages, a working ATM machine is not always accessible. In the city, it might make sense to only withdraw a few days of cash at an ATM. In less populated areas, I might need to obtain all my local currency in advance. One time I was in Manali, Himachal Pradesh, India, and the ATMs were down for nearly a week. Travelers were broke and running out of money. Luckily, I discovered my predicament before running out of cash. I chose to get a few days cash with a cash advance on my credit card from a money changer. I could have also traded some US dollars or a travelers check. That brings up another point, plan a few days ahead, especially in small towns.

To sum things up:

1) Research and know your territory.

2) Assess your risks.

3) Carry only what you need.

4) Diversify your risks.

Overall, use some common sense. Be aware. Be proactive. Have fun, and enjoy your travels.