31 Aug 2015 2 Comments
You finally spotted it. That familiar sidewalk machine that magically spits out money.
Keep reading . . .
If you are planning an RTW, at some point you must figure out how you are going deal with your money. Things have changed a lot since the days of travelers’ cheques and no ATMs. The ready availability of ATMS in foreign countries, and thus the ability to utilize your debit card(s), makes carrying travelers’ cheques and large amounts of cash obsolete.
Yet, for long term travel, having plenty of backups and safety nets in place is crucial. The last thing you want is to lose access to your money because your debit card was lost or stolen!
Here are 7 tips I have compiled for structuring your money situation before your RTW and 8 tips for once you have arrived in a new country:
- Have two checking accounts at home, and bring debit cards for both. First, maintain a “home base” bank account at a large bank, such as Wells Fargo or Bank of America.
- Second, if you don’t already have one, open a Charles Schwab Platinum checking account. Make this the main debit card you use, because Schwab actually reimburses all ATM fees you ever generate by depositing them straight back into your checking account each month. I’m not kidding. And ATM charges in foreign countries add up fast. It is not at all unusual for ATM fees to be $5 or $6 for each transaction. The reason for the two banks is this: The home base bank is a brick-and-mortar bank you can use for your second person to deposit checks and otherwise easily access. While Schwab has brick-and-mortar buildings, they do not function as walk-in banks. You can’t deposit or withdraw money at these buildings; all the banking with Schwab is online. Also, if one of your cards is lost or stolen, the thief will not have access to your entire money pile if it is divided up between banks and accounts.
- There are many reasons to add at least one other person, preferably two, to your two checking accounts (home base account and Schwab account). If you run into any problems, this person can easily deposit cash, write checks for you, deposit checks, and so on. They can even have a backup ATM card in case you lose yours, although you will probably need to change the card number altogether if you lose it. Also, if the worst happens, your backup person will be able to handle this part of your affairs.
- Call both banks to find out how to get a replacement debit card if yours is lost or stolen. Most banks have an international phone number that you will want to keep on a separate piece of paper, preferably in duplicate. Keep this and other important information in a separate place from the cards themselves. In fact, keep the cards separate.
- Let your banks know you are leaving the country and will be traveling to multiple foreign countries. This is super-important because most banks will freeze your account (for your protection) if they see unusual activity on your card and they didn’t know you were traveling.
- Bring a pre-paid Visa or MasterCard with a few hundred dollars on it as a backup in the event that you can’t access your money any other way.
- Bring a couple hundred dollars (or your home currency’s equivalent) as a very last resort. You need all these backups for a variety of reasons. For example, in many countries ATMs can go down for days.
- When you arrive at a country, immediately find an ATM to take out a small amount of cash for transportation and maybe food.
- Depending on which country you’re in, take out only $200 or $300 at a time from an ATM. You don’t want to carry a lot of cash with you, ever. (You can see how getting your ATM fees reimbursed every month can make a huge financial difference.)
- Never exchange your home currency at exchange stations if you can help it. They charge more and usually have the worst exchange rates. ATMs are the best way to go, with banks a close second.
- Get small bills by buying a coffee or some other small item so you can get the change. In many countries, drivers will claim to not have change for your big bill, and you’ll “tip” them the extra, far more than you would otherwise.
- If possible, never use a free-standing ATM machine. Always use one that is attached to a bank. The free-standing ones are much more susceptible to fraud and tampering, such as having a dummy PIN pad that tracks your PIN and a dummy card reader that swallows your card. It happens, and more often than people would like to admit.
- If you must use a free-standing ATM, let someone go ahead of you. This way, if there is a problem with the machine, it won’t be your card that gets swallowed. Sounds terrible, I know, but this is reality.
- Wear a money belt for most of the cash you do carry. Just keep a small amount in your purse or pocket. Never access your money belt in a public place.
- Note that I haven’t mentioned credit cards at all. Partly because I am not going to be carrying one (except for the prepaid one mentioned earlier), but also because credit cards are by far the most expensive way to travel. And if you’re on an RTW, you hopefully aren’t living on credit, anyway. If you do bring one, use it for emergencies only.
The main thing is you never want to completely lose access to your money. Several of these ideas serve as backups and safety precautions so that you are never left without money. Be safe, be smart, and enjoy your RTW!
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