Everything you need to know about travel money
By Ellen Creager
Credit and debit cards have modern flair, but cold, hard cash is still an international traveller's best friend.
But how do you even get foreign currency these days? How much cash should you take? And whatever happened to travellers checks? We talked with currency expert Bruce Beattie, owner of a Foreign Currency Exchange, who keeps close watch on travel money issues around the world.
The Italian lira is no longer honoured in Italy. Photo:istock
"Cash is still critical for emergencies and for smaller purchases where you can't use a debit or credit card," he says. "Have some foreign currency so if you arrive at an airport and can't find an ATM, you have enough money for a taxi, train or a bottle of water at least."
Credit cards still do not work everywhere in the world or work in strange ways, he says. For instance, "Germany is still largely a cash country even though it is the biggest euro zone," he says. "You can't charge a cup of coffee there. They want cash for anything under $30, basically."
Sometimes, even a no-fee credit card will register overseas as a cash advance, incurring fees. Sometimes, your credit card simply won't work, even if it has chip and pin technology. Always take backup cards. And, of course, cash.
They still exist, but almost no one uses them. "It got to the point that counterfeiters figured out how to make them," says Beattie. "In one famous case in Milan, $40,000 of fake travellers checks were passed. Then nobody wanted to take them anymore. We stopped selling them in 2007. People would tell us they couldn't cash them anywhere.
"If you still have them, deposit them into your bank account. They are still good."
"Currency exchange windows at airports, railway stations and hotels have the worst rates, and cruise ships, too, because you are a captive audience," he says. Instead, use a bank or bank-owned ATM, preferably one inside of a bank for the best rates and safest transaction. "If you use an independent ATM you are at risk of skimming machines (that criminals install to commit fraud). Also, privately owned ATMs can charge as much as 10 per cent in fees, plus the regular exchange fee."
Not a great idea. "You might pay a bit more at a bank, but it is worth it. We had a travel agent take a group to Tanzania. They bought old Tanzania dollars on the street that turned out to be worthless," he says. "They got taken."
Yes, says Beattie, who sells to everyone from experienced business travellers to first-time study-abroad students. "I always ask people, what is your comfort level with carrying cash? If it is not high, don't carry too much because you will be worried about it." If you do carry cash, split it up and keep most of it in the hotel safe. Be sure you know rules on how much cash is allowed to be taken in and out of the countries you plan to visit.
Those are rates for large currency market transactions and midpoint between buy/sell rates, he says. Still, published rates give you a rough idea of the true retail exchange rate. "With the euro, we are (selling it) about 3 to 4 per cent above the XE rate," says Beattie. "The rates on some more exotic (unusual) currency can be different."
"Someone can wire you money via Moneygram or Western Union. In our experience, transit time, depending on where you are, is 10 minutes to a week. Sometimes someone takes a cut of it along the way," he says.
"Yes. But you will get less for it than you paid for it."
"It depends on the currency itself. Some have a window in which you can turn it in. For instance, Germany uses the euro. But the old German mark has not closed the window for exchange; it still has value. But the Italian lira and French franc, those countries stopped honouring that currency a few years ago."
Most European countries no longer honour their pre-Euro currency.
"Pretty much, except to the secondary market of collectors. Some people collect old foreign currency. It has to be in pristine shape," he says. "But a lot of currency has the same problem. In Switzerland, any currencies prior to the past two issues have been de-monetised. It has no value. Sometimes I have people come in, maybe their father has passed away and they open a safe deposit box and find this old currency, maybe 4 grand worth of old Swiss francs, and I have to tell them it has no value."
The US and just a couple others. The euro (which the public began using in 2002) does not expire (at least yet). "Most currency expires. Brazil, for example, has had three or four currency changes since the '70s," he says.
So the bills can more easily be verified as real and be accepted for exchange at their banks, Beattie says. Once he was travelling in Asia and tried to exchange a bill that had a sharp crease on the face of the president. After a long examination, the bank clerk finally took it.
Source:Extract from http://www.traveller.com.au/travel-tips-and-advice-everything-you-need-to-know-about-travel-money-greuzu